George S. May Business Blog

Higher Education Faces Steep Cuts, Tuition Hikes

Recently the Federal government pumped billions into the private sector to avoid a horrible collapse of the financial sector. The thinking behind this move was that the companies at risk were too big too fail, meaning that if they were to close their doors, they are so vital to America that the country might just go along with them.

However, federal and state governments have resoundingly voiced their support in what institutions are not too big to fail. In this case: higher education. Funding to colleges was one of the first items most state governments were willing to slash to be sure that the money could be found to hold other agencies together during these years of anemic budgets.

This move is probably one of the worst short-term cash fixes in recent memory, and given recent memory that is a powerful statement. By strip mining academic budgets, tuition has ballooned tremendously across the nation as colleges try to bridge the gaping hole in their coffers.

The University of California, for instance, estimates a 30% increase in the 2010-2011 year. “California’s $20 billion deficit will make it hard for the [state's] legislature to provide funding to the schools,” said Patrick Lenz, UC Berkeley’s budget administrator.

The troubling part of this situation is, the worse off the state, the worse off the colleges in those states will be, which is why California is cause for such concern.

Other examples of state colleges getting hit by these cuts are the Universities of Nevada, Florida, and Washington, which each estimate that their tuition will jump 10% to 15% next year. University of Washington’s Vice Provost said the school expects to raise rates by 14% to help make up for a $21 million cut in funding from Washington state.

The University of California system as a whole has had to endure huge losses of funding in recent years. The state of California slashed $637 million from the UC school system for the 2009-2010 year, and another $814 million in the 2008-2009 academic year. The school doesn’t yet know how much funding it will receive for next year, as they estimate that even with the 30% tuition hike it will still be in a $230 million dollar hole.

The problem with gutting education in order to bridge temporary budget problems is that it’s damaging an entire generation of future workers by sacking state college’s quality. Even in good times many schools face huge faculty retention problems, building maintenance issues, and money required for new technology, facilities, and programs to keep competitive in emerging fields.

The problems state colleges face are ones that can be solved with millions, not billions as they’ve been so freely given to certain interests. Although enrollment hasn’t yet been affected, the quality of education has assuredly suffered due to these increased financial strains.

Students at state schools are still likely to pay only a fraction of the tuition their private school counterparts are likely to spend, which is still good news for families who can’t spend $50,000 a year in tuition.

But taking support away from the state school systems forces them into a mentality of extracting as much money as possible from students, and which each successive hike in tuition, state college moves a little further out of reach for some.

Grants, loans, and other tuition subsidies have recently been expanded by the Obama administration, but if states continue taking away money in the hopes that federal dollars will replace them, then a cycle of needless waste and expense is being implemented instead of sound policies on both government levels to stabilize colleges.

Colleges will likely not fail as a result of these cuts, however, the consequences might still be worth a second look. By making the decision to make education less of a priority we risk losing more ground in global economic competitiveness.

Desperate times call for desperate measures, but we don’t have to keep waiting for situations to become catastrophic before acting on them. Colleges haven’t engaged in any deceptive practices or made any heinously poor judgments to arrive at this financial trouble, so why should they be denied money while we freely hand out checks to companies which knowingly headed towards financial icebergs, blindly hoping that they might just melt before impact.

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