Despite Stimulus Money, Many Colleges Across the Nation Face Troubled Times

The recession of the last few years has hit everyone hard, from large corporations down to individual families. Public colleges and universities have of course not been immune to the effects of the bad economy, fully feeling the impact of budget cuts that have led to layoffs and tuition increases. Then legislation in 2009 seemed to save the day for higher education. But was it enough?

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By Harrison Howe


Sigh of Relief Turns Into Gasp for Breath

In February 2009, an economic stimulus bill called the American Recovery and Reinvestment Act allowed U.S. public colleges and universities to breathe a sigh of relief: help was on the way. Billions of dollars were earmarked to support higher education institutions throughout the country. The money would not only be used to restore budget cuts but would increase research grants and federal aid programs.

So, problems stemming from the Great Recession were solved, right?

Well, fast forward two years later, and many states now face the fact that that stimulus money is running out, forcing these institutions to cut programs, raise tuition and even turn students away. Dan Hurley, the director of state relations for the American Association of State Colleges and Universities, told in September 2011: 'This academic year is going to be the hardest one on record,' most notably for those schools strapped for cash.

Some states are hit harder than others, depending on how much they relied on the stimulus money. In California, for instance, stimulus money was used to pay 30% of the state's higher education expenses in 2009; in 2010, only one percent. Such drastic changes are seen in several other states as well, including South Carolina (35% in 2009, less than two percent in 2010) and Nevada (which has seen its higher education budget decline 30% over the past three years).

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What Happened?

With millions of dollars available for individual colleges and universities across the country, why exactly have things returned to the way they were before the stimulus bill (or, in some cases, worse)? In part, blame could be placed on the handling of the stimulus funds. Some institutions chose to use some of the funds to hire additional staff or for operating costs; others wisely planned for the continued economic downturn to better manage the money.

Take Metropolitan State College of Denver: while using the stimulus to invest in new technology and even add three master's programs, the college also made some tough personnel cuts in anticipation of the stimulus funds running dry. The University of Delaware made cuts to its athletics department and merged some administrative departments in recognizing that the stimulus funds were going to last only two years.

On the other hand, many Florida colleges, such as the University of Florida and Florida Atlantic University, used some of the funds to hire adjunct professors and full-time faculty. When the stimulus money is gone, these institutions will have to raise tuition to pay for these positions.

Also, some states themselves simply did not use the funds as intended. In a report from National Public Radio (NPR) in October 2009, the U.S. Department of Education found that some states were using the funds to replace what they had cut from their own education budgets rather than using them for individual schools. Per instructions from the Obama administration, the stimulus money was meant to supplement and not replace state funding.

Picking Up the Tab

Students, of course, wind up paying the price both financially and academically: tuitions rise, federal aid and scholarship programs get cut or reduced and academic programs are no longer offered.

According to statistics from the State Higher Education Executive Officers, state budget funding for college students fell about $1,000 per student between 1985 and 2010, while the amount coming from the students in the form of tuition nearly doubled ($2,274 to $4,321). Meanwhile, a growing number of colleges and universities are cutting programs and laying off instructors.

Cutting professors and programs of course leads to fewer classes, forcing schools to turn prospective students away. Bakersfield College president Greg Chamberlain, whose school has cut 150 classes, told 'We should be opening our doors further, not closing them.'

Education Insider asks: Did the debt ceiling deal reached in August 2011 help higher education or only delay further cuts?

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