Land-Grant Universities Consider Restructuring to Cope Budget Crisis

Public universities, including the land grant universities, are being hard hit by the economic downturn. An article in the Chronicle of Higher Education today (registration required) reports on a survey of the members of the Association of Public and Land-Grant Universities.
Sixty of the 87 responding institutions say that they have experienced cuts to their state appropriations for the 2010 fiscal year, ranging from 5 to 20 percent.
How are the universities responding?

Laying off tenured or tenure-track faculty members was one of the least-common cost-cutting measures taken by responding institutions. Other uncommonly used approaches included redirecting restricted donations, eliminating athletics teams, laying off graduate assistants or student workers, and reducing scholarships.
To bolster their revenue, institutions have increased in-state tuition by a median amount of just over 7 percent, the survey found. The median increase for out-of-state students was close to 6 percent.
Institutions have also plugged their budget gaps with some of the nearly $40-billion in federal stimulus money meant to shore up public-school and higher-education appropriations for the current and coming fiscal cycles.

What does this mean for students planning their college futures?  Well, for students looking to institutions in their home states, be prepared for things like larger classes, reduced administrative support (and efficiency), and cuts to some programs.  Athletes should also research whether their sport may be likely to be cut during their four years–if you sign to a school that then eliminates its program, you’re out of luck.
Students who would like to attend a land-grant institution outside their home state may find it easier to get accepted this year, as institutions scramble to increase revenue by finding out-of-state families willing to pay the full price of admission.  (As always, money talks).
For a full listing of the members of the APLU, go here: https://www.aplu.org/NetCommunity/Page.aspx?pid=249 .The list includes many of the major public universities in the United States:  UCLA, Berkeley, University of Colorado, University of Connecticut, University of Alabama, etc.), but also a few private universities (notably MIT and Cornell)
Mark Montgomery
Educational Consultant

M.I.T. Considers Increase in Student Body by 300–and Swears It's Not About Revenue

During rough economic times, it’s hard to get at the reasons college make policy changes. According to Jacques Steinberg in today’s New York Times, M.I.T. is considering an increase in the size of its student body.

On its face, this is simply a move to return the campus to the size it was back in the 1980s and 1990s, when 4,500 students roamed the Cambridge campus.  But with a policy change back then that required all freshmen to live in dormitories, the campus enrollment fell to about 4,200.  So the move seems like an attempt to return the campus to its traditional, historic size.

The Dean of Admission, Stewart Schmill, denies that the move to increase the student body has anything to do with revenue targets.  He pointed out that new dormitories will need to be built (which generally pay for themselves quite nicely, as the rents are guaranteed). He also pointed out that the move to expand enrollment may not happen in one fell swoop.  Plus, M.I.T. practices “need blind” admissions, so more financial aid will have to be allocated to the 300 new students.

I’m skeptical, frankly.  The fact is that many universities, especially large, research-oriented universities, have budgets that depend on a healthy revenue stream from undergraduate admissions.  It’s simply a numbers game–a sort of revenue pyramid.  In order to pay for expensive graduate programs, universities need plenty of undergrads to provide the bedrock financial foundation to support them.  Undergrad course sizes can be bigger so that graduate courses can be smaller.

So when a major institution of any type makes a decision to expand–or contract–and swears that the motivation has nothing to do with economics–well, I’m just a teensy bit cynical.

Here’s my logic.  Colleges are businesses.  Businesses make decisions based not on nostalgia, but on the financial interests of the business.  Ergo….

Whatever the truth, we’ll likely never know much more than what Schmill told Steinberg.  A private university like M.I.T. can keep its finances private.  So we’ll just take Schmill at his word.  Nostalgia for those halcyon days of 4,500!  Oh, how we miss those vital 300 students, who made our campus so much more vibrant and fun.  Ah, me….

Mark Montgomery
Educational Consultant

Technorati Tags: MIT, M.I.T., Massachusetts Institute of Technology, admission, budget, administration, enrollment, New York Times, Stuart Schmill, Jacques Steinberg, policy, higher education Del.icio.us Tags: MIT, M.I.T., Massachusetts Institute of Technology, admission, budget, administration, enrollment, New York Times, Stuart Schmill, Jacques Steinberg, policy, higher education

Colleges Cut Costs By Cutting Sports

Yesterday I mentioned that the economic downturn has affected faculty recruitment at many universities, including the University of California system. Thus budget cutbacks are having a negative impact on the educational experience of students.

Universities are also cutting sports–or at least slashing their budgets.  Very few NCAA sports programs break even, and even fewer make money:  most are a drag on institutional budgets.  As reported by the Associated Press,

In the five-year period through 2008, only 18 of 119 Division I athletic departments operated in the black, according to preliminary numbers compiled by Dan Fulks, an accounting professor at Transylvania University in Lexington, Ky., who has been an NCAA consultant for 20 years. Those numbers were before the economic downturn.

And one might argue (though in America college sports seem to be sacrosanct) that the amounts of money regularly poured into varsity athletics are unjustifiably high.  So perhaps it’s a good thing that coaches’ budgets are being axed.

But whether we think this is a good or bad thing, there is no doubt that the faltering economy is having an impact on the student experience at many universities.

Here are some examples:

  • Some schools are eliminating new scholarships to less flashy sports, like cross country, track and field, and swimming.
  • Many schools are trimming travel budgets.  For some schools this means fewer chartered plane and more commercial flights.  For some this means more buses instead of airplanes.  For others, it means traveling only to neighboring states.
  • Some are cutting insurance for walk-on players.
  • Media guides–hefty, eye-popping, public relations pieces–are being eliminated at many colleges.
  • Coaches are scheduling more practices and games during the day to save on nighttime lighting.

Some of these measures will be barely noticeable to most athletes (except those swimmers who were expecting scholarships in return for spending countless hours paddling back and forth across the pool).  But if the economic downturn continues to affect college budgets, I would expect to see more cuts to athletic programs in the coming years.

Since most athletic programs do not pay for themselves, college presidents and boards of trustees will come under pressure to make further cuts to their institutional budgets.  And as they do, expect them to focus more on trimming athletic budgets as a way to protect financial aid, faculty salaries, and student services that are shared by all students–rather than the small number of athletes in some sports.

What does this mean for students and their families who are shopping for colleges with particular sports?  Be aware that some sports are much better funded than others, and that while a sport seems well-funded today, that doesn’t mean it will be well-funded tomorrow.  Ask questions about the financial health of the program, and inquire as to what cuts already have been made in the last year or two.  Don’t just assume that if your son or daughter gets a scholarship today that it will necessarily be extended all four years:  that’s a guarantee that no coach can really make in these tough financial times.

Mark Montgomery
Educational Consultant



Technorati Tags: college, athletics, budget, NCAA, university Del.icio.us Tags: college, athletics, budget, NCAA, university