Shrinking endowments, state funding reductions and families struggling to pay tuition are forcing many colleges and universities to cut staff, spending, and to delay construction and development plans.
From well-heeled Ivy League schools such as Harvard and Dartmouth to large public institutions such as the California State University system, many schools are facing difficult financial decisions stemming from the nation’s economic standstill.
Last week, the California State University system announced plans to trim 10,000 students across its 23 campuses in the next school year because of funding problems caused by a state budget crisis. The CSU system – the nation’s largest, with nearly 450,000 students – will make the cuts by moving up application deadlines and raising academic standards for incoming freshmen.
“We have been, for the last two years, over-enrolled by over 10,000 students that the legislature has not funded,” CSU Chancellor Charles B. Reed said. “We can’t continue to admit more and more students without receiving adequate funding.”
Dartmouth College recently announced a hiring freeze and plans to cut its budget by 10 percent, or about $40 million over the next two years, because of the situation. Staff reductions are also possible.
In previous economic downturns, college enrollment remained steady as more people bolstered their education to help improve their work prospects.
However, the unique aspects of the current slide – falling home values and stock prices, rising unemployment, tighter credit and fewer student-loan providers – have made a college education harder to finance and much more difficult to obtain.
Neil Theobald, the vice president and chief financial officer at Indiana University, said recently that his staff was seeing more affluent families struggling with tuition payments.