Florida Board of Governors

Colleges on Limited Budgets Brace for Population Growth

Source: The Chronicle of Higher Education, 8/24/09

Thirty-eight students graduated in May from Georgia Gwinnett College, which opened in 2006. State lawmakers expect that, in five years, the institution will have an enrollment of about 10,000, as the state's college-going population skyrockets.

The college-age population across the entire South Atlantic is growing rapidly, and having a new four-year college with lots of room to expand is highly unusual. Most states are struggling to support their often-overcrowded public colleges, let alone paying to open new ones.

More students than ever applied to South Atlantic colleges this year, at a time when institutions are becoming more expensive and more selective, shifting pressure to community colleges with open-door admissions policies.

"We're paring the infrastructure down to the bone but trying to keep a vibrant instructional climate," says Robert G. Templin Jr., president of Northern Virginia Community College, one of the nation's largest community colleges.

In the past two years, state support for the college has decreased by 10 percent while enrollment has increased by 11 percent.

The 2009 high-school graduating class is the largest in Northern Virginia history, Mr. Templin said. He added that more of those students are turning to community colleges as their families "find that their strategies for funding higher education aren't working."

Florida's public colleges, often recognized for their low cost, increased tuition by 15 percent for the fall of 2009 to help make up for a $100-million decline in state funds over the past two years.

The colleges were given the authority this year to raise tuition by up to 15 percent each year until they reach the national average, a power that the governor and other state lawmakers for many years had resisted handing over.

Most states followed suit, raising tuition even as the recession hit many families' pocketbooks, and unemployment in the region climbed by more than a percentage point in the first six months of 2009. Some South Atlantic colleges added fees and cut services to account for losses in state funds and plummeting endowments because of the economic downturn.

Georgia's public colleges, facing a $220-million, or 10-percent, drop in state support for the 2010 fiscal year, cut the popular "fixed for four" program, which guaranteed each freshman class the same tuition for four years.

"The decision was something nobody took lightly," says Susan Herbst, chief academic officer for the University System of Georgia. "We were incredibly proud of the program."

One of the nation's fastest-growing states, Georgia is preparing its 35 public colleges to receive 100,000 more students by 2020. The state this year avoided increasing the tuition it charges for each credit hour, but added mandatory fees and altered the way it counts credit hours so that many students will pay more in the fall of 2009 than they paid the year before. The university system laid off 148 employees and left many vacant positions open.

"We looked at a buffet of not-very-attractive options," Ms. Herbst says.

Changing Demographics
By 2022 nonwhite graduates of public high schools in the South will be in the majority, according to projections from the Southern Regional Education Board. The number of Hispanic people immigrating to South Atlantic states is rising rapidly. And across the Southeast, community colleges are struggling to meet the demand for courses in English as a second language, says Mr. Templin, of Northern Virginia Community College.

"Many of these new Americans don't have a tradition of high academic achievement," he says. "But if we can unlock their human potential, they'll be an enormous asset because they'll be bilingual in a global economy."

Colleges have pushed to enroll more students from low-income families and from minority groups that have been underrepresented in higher education, and many colleges across the Southeast have committed to preserving their financial-aid offerings even as they cut other programs to grapple with the economic downturn.

Leonard Sandridge, executive vice president and chief operating officer at the University of Virginia, says that the university will continue to fully finance its financial-aid program known as AccessUVa despite having to make cuts elsewhere in the budget. The program meets 100 percent of undergraduate students' demonstrated financial need.

The State of Virginia has cut its support for its public colleges in each of the past three years. And in July, Gov. Timothy M. Kaine, a Democrat, asked the colleges to prepare for possible midyear cuts of as much as 15 percent, on top of the reductions in previous years.

College endowments also took huge hits this year. The University of Virginia's endowment dropped by 20 percent, or about $1-billion. Mr. Sandridge says the university had planned to increase tuition by about 10 percent for the 2009-10 academic year, but federal stimulus funds provided for state education budgets allowed the university to limit the increase to 4.5 percent for in-state students.

To cope with budget limits, though, the university has left many vacant faculty and staff positions unfilled, reducing its work force by about 200. Like many other colleges in the South Atlantic, the university has increased its reliance on revenue from private sources like donations, research grants, and auxiliary services, Mr. Sandridge says, as state support has dwindled as a proportion of the university's budget. The state now provides the university only about 6 percent of its operating budget, a proportion that has decreased substantially over the past decade.

"It's hard for me to believe that states, generally, are going to be able to come back to the table," Mr. Sand ridge says.

Private universities, too, have been hit by the economic downturn, even though they are insulated from state-budget dynamics. At Duke University, for instance, officials estimate that the institution's endowment has lost a quarter of its 2008 value.

The drop has forced the university to cut costs; income from the endowment, combined with tuition, accounts for about one-third of Duke's operating budget. The university plans to reduce its $2-billion operating budget by $125-million over the next three years.

So far, Duke has reduced the size of its work force through an early-retirement program for hourly workers and by leaving many vacant positions unfilled. Michael Schoenfeld, the university's vice president for public affairs and government relations, said administrators cannot rule out the possibility of layoffs. "But we're going through a pretty rigorous process to ensure that's a last resort," he said.

Duke was also able to stave off a large tuition increase, raising its cost of attendance by 3.9 percent for the 2009-10 academic year, to $37,485.

For Greensboro College, it was an especially bad year. In July, Craven Williams, the college's president for 16 years, abruptly resigned as the Methodist institution struggled with mounting debt and a severe cash crunch.

The extent of the college's financial problems began to come to light in April, when Mr. Williams surprised faculty and staff members by announcing layoffs and a temporary, across-the-board 20-percent pay cut for salaried employees.

In Maryland the chancellor of the state's university system has said midyear tuition increases are not out of the question, which would put an end to a four-year tuition freeze in the state. Maryland's governor, Martin J. O'Malley, a Democrat, cut $37-million from higher-education spending in July after revenue projections fell $700-million short of earlier estimates. About $20-million of the cuts will be offset by the university system's reserves.

West Virginia's tax revenue has been healthier than that of other South Atlantic states, allowing the state's colleges to better weather the storm. The economy in the coal-rich state has remained relatively stable, says Brian Noland, chancellor of West Virginia's Higher Education Policy Commission. State support for public colleges in the 2010 fiscal year was cut by 3 percent from the year before, a modest decline compared with places like Florida. There state funds for higher education declined by more than 10 percent for the 2010 fiscal year, leading to large cuts at institutions. Florida State University, for instance, even sought savings by pulling the plug on office phone lines for professors.

West Virginia is also the only South Atlantic state where the population is not growing rapidly, and its colleges saw small enrollment increases last year, especially compared with its neighbors. In all, 87,803 students attended West Virginia public colleges in the fall of 2008, an increase of about 700 students from the fall of 2007.

"It was a very steady and stable year within the system," Mr. Noland says. "That being said, if anything were to happen to the energy industry, our budget could change quickly."

Political Climate
A federal stimulus package signed by President Obama in February included money that has helped many states in the region limit cuts in higher education and, in many cases, even raise spending on it.

But many states, including Florida, Georgia, and Virginia, will have used up all of the stimulus money their states received for education by the end of the 2010 fiscal year, leaving nothing for 2011, when their economies are expected to still be suffering from the economic downturn.

South Carolina's governor, Mark Sanford, opposed Mr. Obama's stimulus plan and tried to prevent his state from receiving about $700-million for its schools and colleges. The governor, a Republican, called the plan fiscally irresponsible and said that increased government spending was not the answer to the nationwide economic slump.

The state's General Assembly, though, passed a measure forcing Mr. Sanford to submit a request for the education money, and he reluctantly did so. The state has now received $442-million in stimulus funds, about $17-million of which will go toward education.

North Carolina's new governor, Bev Perdue, a Democrat, pledged in her 2008 campaign to allow all the state's high-school graduates to attend community colleges in the state at no cost. She did not press lawmakers to adopt the policy for the next fiscal year because of the state's bleak financial situation.

Presidential Turnover
New presidents and chancellors arrived at several South Atlantic colleges during the 2008-9 academic year, including Holden Thorp at the University of North Carolina at Chapel Hill, Michael Rao at Virginia Commonwealth University, and James P. Clements at West Virginia University.

Several states also lost longtime college presidents, some to scandal and some to retirement.

Northwest Florida State College ousted its president of 22 years, James R. Richburg, after a grand jury indicted him on felony charges of misconduct and perjury. The jury accused Mr. Richburg and State Rep. Ray Sansom, a Republican, of falsely securing state money to build an aircraft hangar for a friend and key political donor.

The college's Board of Trustees voted to fire Mr. Richburg and to scrap plans to build the hangar, a $6-million, state-financed college facility. The college has also been asked by the governor to return $300,000 that the state has already spent on the project.

Florida State University will also lose its president, T. K. Wetherell, who announced that he would step down as early as this fall. The president of six years was a large presence, both on the campus and off. A former state lawmaker, Mr. Wetherell was known for fighting in the state's capital for more money for higher education.

The University of Virginia's president of 19 years, John T. Casteen III, announced in June that he would retire from his position after the 2009-10 academic year.

Mr. Casteen worked to broaden the makeup of the student body, which has historically been largely white and lacked many students from low-income families. As state aid has dwindled, Mr. Casteen also increased private fund-raising efforts, and the university is now past the halfway mark on a $3-billion campaign set to close in 2011.