Stimulus funds helped public colleges avert disaster

By Daniel de Vise
Washington Post Staff Writer
Friday, February 12, 2010

Public colleges and universities had one of their leanest years on record in 2008-09 and only a $2.4 billion infusion of federal stimulus money staved off fiscal disaster, according to a report on higher education finance.

Maryland fared better than most states in the State Higher Education Finance report, released Thursday. State and local funding, including stimulus money, rose a modest 4 percent to $8,100 per student in inflation-adjusted dollars in fiscal 2008-09, ascending despite a statewide tuition freeze. Virginia's experience was closer to average: a 4 percent decline in state and local funding, to $5,702 per student, a figure projected to sink further in the current fiscal year.

Total state funding for public higher education fell from $80.7 billion to $77.9 billion in 2009, according to the report from the nonprofit industry group State Higher Education Executive Officers. Federal stimulus funds nearly closed the gap. But with a record enrollment of 10.8 million students, colleges had to disburse the dollars among more students.

State and local governments contributed $6,928 per student to public higher education institutions nationwide in 2009. That's comparable to funding levels in recessions of the three previous decades, but not worse. Without onetime help from the American Recovery and Reinvestment Act, funding might have dropped off a cliff, finance officials said.

"The bad news is, it's gone at the end of fiscal 2011," said Dan Hix, finance policy director at the State Council of Higher Education for Virginia.

The report projects that state support to Virginia schools will decline from $1.9 billion in fiscal 2009 to $1.58 billion in fiscal 2010, a drop only partly offset by $127 million in stimulus money.

In his annual State of the University speech Tuesday, University of Virginia President John T. Casteen III noted that his school had sustained three budget cuts totaling $32 million, or one-fifth of its state appropriation, by the start of the academic year. Former governor Timothy M. Kaine's budget plan for fiscal 2010 and 2011 would cut an additional $4.6 million. The year after that, 2012, is "when the real budget reckoning will occur," he said.

Colleges across the nation have responded to the downturn by cutting positions, hiring less-expensive adjunct professors and holding fewer, larger classes. They have also raised tuition, pushing enrollment from higher-priced land-grant universities to lower-cost four-year schools and community colleges.

"Everything that an institution can do under fiscal stress has been done," said Paul Lingenfelter, president of the industry group.

At U-Va., for first time in history, resident students pay more toward their education than the state. The university has trimmed more than 160 positions, so far without layoffs. The staff has gone two years without raises. The College of Arts and Sciences, heavily dependent on state dollars, will eliminate 7 percent of its 2,900 course offerings. Schools of nursing and education have limited or cut enrollment. The Alderman Library will buy 2,700 fewer books and has canceled 300 journal subscriptions.

State funding to the College of William and Mary has slipped $17 million, or 32 percent, since spring 2008. The school has balanced its budget with $7 million in cuts, $7 million in stimulus funds and $3 million in new tuition dollars.

The school's governing board approved midyear cuts that eliminate 18 positions, partly through 12 layoffs. The school also enacted an unusual $300 midyear tuition increase.

In Maryland, Gov. Martin O'Malley (D) has responded to the funding crisis by ending a four-year tuition freeze in the state university system. His budget plan calls for tuition to rise 3 percent for state residents in the next academic year.

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