Their Budgets Slashed, Public Colleges Share in Their Applicants' Economic Pain

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1 The Chronicle of Higher Education Wednesday, November 19, 2008 Their Budgets Slashed, Public Colleges Share in Their Applicants' Economic Pain By KATHERINE MANGAN At a time when the nation s economy is ailing and credit is drying up, Troy Carter thought he had found an affordable way to earn a four-year college degree: Stitch together an education at a community college and a state university. But like millions of other students who are flocking to community colleges and public universities, he finds them struggling with financial problems of their own. Midyear budget cuts are forcing many of the institutions to lay off faculty members, cut class sections, and freeze enrollment. I m trying to speed through this, get my bachelor s degree, and get into the work force, says Mr. Carter, 26. But I m competing with thousands of students to get into the classes I need to graduate. The Army veteran hopes to transfer from Sacramento City College to the University of California at Davis next year to continue his studies in political science and public policy. But increases in tuition and fees are looming. I m scared about how much debt I m going to be taking on, he says. Rising unemployment, slumping values of stocks and home equity, and tightening credit markets are adding to students anxiety. As a result, when laid-off workers turn to community colleges to brush up on skills or switch careers, they often find that the classes they need are full. Turning away students is something of an anathema, but if your budgets are being cut and you don t have enough faculty or classes, it s a de facto closed door, says Norma G. Kent, vice president for communications at the American Association of Community Colleges. Shifting Expectations

2 Some of the worst economic news hit in September and October, just as high-school seniors were starting to zero in on the colleges they wanted to apply to. Most won t have to commit until spring, so it is too early to know how the economic turmoil will affect their choices. But many college admissions officials and high-school counselors predict that cost will weigh heavily on students minds. A lot of families out there will be looking at their most recent 529 statements and scaling back their expectations of where they re going to send their sons and daughters, says Daniel J. Hurley, director of state relations and policy analysis at the American Association of State Colleges and Universities, referring to college-savings plans. Many students who had planned to attend private or out-of-state public colleges may turn to cheaper in-state options, which may be hard-pressed to accommodate them. Additional tuition revenue sounds like good news for cash-strapped public colleges, but the extra income usually doesn t cover the added cost of expanding classes and campus infrastructure. James E. Rogers, chancellor of the Nevada System of Higher Education, predicts that public colleges in his state, the nation s fastest-growing, will have to turn away tens of thousands of students. The system faces state budget reductions of at least 14 percent in the next budget cycle, in addition to the 8 percent already trimmed this year. Meanwhile, both demographic and economic pressures are expected to push more students toward two- and four-year public institutions. Nevada s population has grown more than 60 percent since 1996, but tourism is in a slump, and gaming revenues are down. Mr. Rogers has waged an angry public campaign against the reductions proposed by Gov. James A. Gibbons, a Republican, arguing that the likely result would be faculty layoffs, especially of part-timers; crowded classes; and fewer course sections. When the economy goes to hell, students go back to school, the chancellor says. But as our population, and the demands for classes, has grown, our ability to provide them has suffered. Tough Times in New York Public universities in New York, the state where Wall Street meltdowns have hit home, feel a similar squeeze. The State University of New York at Binghamton, one of the most selective campuses in the SUNY system, reports that applications are up about 50 percent over this time last year. But with a mounting state-budget deficit, Binghamton and other public universities in New York are bracing for midyear budget cuts. Tuition increases are likely. Drastic budget cuts in Florida last year forced the state s rapidly growing public universities to lay off faculty members, raise tuition, and cap freshman enrollments despite increased applications. The ensuing overflow has put pressure on the state s already crowded community colleges and made it harder for their graduates to transfer to four-year campuses.

3 Nationwide, community colleges are reeling from state cuts as well as reductions in property-tax revenues because of the weak housing market. As a result, expensive but popular programs are being reduced despite widespread work-force shortages in some fields. For example, recent economic woes have exacerbated colleges longtime problems in recruiting nursing instructors, who can earn much more in the private sector. In Texas, all of the community colleges have waiting lists for their nursing programs. The wait is expected to get longer; community and technical colleges accounted for 70 percent of the enrollment growth in Texas higher education this year, according to the state s Higher Education Coordinating Board. A national survey bears out that trend. Fifty-seven percent of the 2,500 high-school seniors surveyed this fall by a scholarship-search group called MeritAid said they were considering less expensive, less selective colleges. The survey, which was sent to students who had signed on to the company s college and scholarship-matching Web sites, found that 14 percent of the students had shifted their attention from four-year to two-year colleges. Jonathan Kazlow, a senior at Menlo-Atherton High School, south of San Francisco, has applied early-action to Boston College and is considering more than 10 others, including another pricey private, Claremont McKenna College. But conversations with his parents are different now. Six months ago, the idea was, Apply anywhere you want, he says. In the past couple of months it s been, Let s hope you get into UCLA or Berkeley. Although his family lives in a relatively affluent area, his mother s company has been hit by layoffs, and his father s investments, which included a hefty chunk of Lehman Brothers stock, have nose-dived. The day the stock market dropped 900 points and that entire week when things were falling fast, it all changed, the high-school senior says. Now, when I look at private schools, I m checking out their endowments and financial aid. And I know that if I get into a top public university, that s where I ll go. Far More Selective But getting into top public universities may become significantly harder, warns William R. McClintick Jr., president of the National Association for College Admission Counseling. With these surges in applications, many of our public universities will be so selective that a B- plus kid won t be able to get into a flagship, says Mr. McClintick, who is director of college counseling at the Mercersburg Academy, a private school in central Pennsylvania. If those students turn to private colleges, their financial-aid packages might be disappointing, he says. The needs will be greater, but the colleges may have less money to work with because their own endowments have taken a hit, and all their projections are out the window.

4 One of his advisees, Kylee Mason, is a top student whose family earnings have tumbled this year. She hopes to get into one of a handful of elite private colleges that have replaced loans with grants for low-income students, or, in some cases, all students. I m looking at lots of private liberal-arts colleges with decent endowments, says Ms. Mason. She has applied early-decision to Amherst College, which says it has no plans to scale back its need-blind admissions policy even though its endowment has lost about a quarter of its value since June 30. Things would have to get a lot worse before that would be put on the table, said Peter J. Rooney, college spokesman. One of Ms. Mason s classmates, Whitney Clark, who hopes to become a veterinarian, worries that her parents earn too much to qualify for need-based aid but too little for her to afford a private or out-of-state college. While cost was always a concern, now she wonders if she will qualify for student loans and whether, in a sluggish economy, she will then earn enough to pay them off. In the last few months, I ve had to drop some colleges from my list because of cost, she says. Cornell would have been great for preveterinary science, but since it s a private and so wellknown, there s literally almost zero chance I d get financial aid from them. Instead she has focused her search on lesser-known private colleges and public colleges in her home state of Maryland. Enrollment Boom Amid Bust The University System of Maryland was hit with a 3.3-percent cut in state funds this year despite significant enrollment growth. As a result, it has frozen faculty hiring and will cut course offerings. In Georgia, higher-education officials are not yet considering an enrollment cap but have made it clear that if soaring enrollments threaten to compromise quality, they will limit access. Despite record enrollments in the state s 35 public colleges and universities this year, the highereducation budget is slated to be cut 6 percent for the 2009 fiscal year. Officials say classes and academic programs will have to be dropped and faculty members laid off. College officials in Utah are wondering how they will accommodate a 9-percent enrollment increase despite a cut of 4 percent in the state s higher-education budget. José Luis Santos, an assistant professor of higher education and organizational change at the University of California at Los Angeles, called the situation facing California, with its growing population, shrinking state budget, and collapsed credit market, a perfect storm. This is an overburdened system that s about to get more burdened, he says. For the first time in its history, California State University plans to cut systemwide enrollment by 10,000 students if the state doesn t provide more money.

5 The chancellor, Charles B. Reed, made the announcement after Gov. Arnold Schwarzenegger, a Republican, proposed midyear budget cuts that would slash $66-million from the system in the current fiscal year, in addition to the $31-million already cut. The university system is also covering $215-million in unreimbursed expenses resulting from enrollment increases and higher fixed costs. Similar cuts have been proposed at the University of California. If we continued admitting students without appropriate funding, we would be degrading the quality of education at CSU, says Clara Potes-Fellow, a system spokeswoman. Most of Cal State s campuses have moved their application deadlines to November 30, from March 1, to limit enrollments at a time when applications are up 20 percent from last fall. Capping enrollment would have a trickledown effect on the state s already overcrowded and financially strapped community colleges. The community-college system s own proposed midyear budget cuts would force it to turn away 263,000 students at a time when rising unemployment has many more students turning to twoyear colleges for training and education, according to an analysis by the Community College League of California, an advocacy group. Enrollment was up 10 percent this year, and applications for next year are expected to continue to rise. Community colleges should be the savior in all of this, says Mr. McClintick, of the Mercersburg Academy. They re a great bargain and a point of entry for so many folks in higher education. But with so many states cutting their budgets, he says, they re under tremendous stress. They re living on a shoestring to begin with, and they re the ones that will be bursting at the seams.