Study: Stimulus Money Helped Public Colleges, But Problems Could Lie Ahead

October 19, 2011

Money from the State Fiscal Stabilization Fund, part of the 2009 stimulus legislation, helped states shore up higher education and avoid layoffs and tuition increases but did not avert them entirely, according to a study released Tuesday by the New America Foundation's Federal Education Budget Project.

The foundation conducted case studies on eight states to see how they used their portions of the $48.6 billion program, $39.6 billion of which was intended for education spending. Some practices differed from state to state -- Wyoming required institutions to use the majority of the money for facility improvements, while North Carolina and Nevada used the funds for salaries and benefits, for example -- but overall, they found that most states required at least a portion of the money be spent on salaries and benefits. Since these are ongoing expenses, that might not bode well for the future now that the money has run out. "Looking forward into 2012, institutions in the states selected for this case study are facing uncertain futures," the author, Jennifer Cohen, wrote. "While many of them believe their budget situations have stabilized, they are still functioning under strict
fiscal constraints."

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