Nearly five years after the official end of the longest economic downturn since the Great Depression, plenty of colleges are still suffering, and not just the tuition-dependent private ones.
Even as some states have renewed their support for public higher education, a combination of long-term demographic change, governmental imperatives, and resistant stakeholders have forced layoffs at some institutions. Public colleges in Colorado, Maine, Minnesota, and Pennsylvania have all announced or proposed faculty cuts since the start of the academic year.
In addition to facing most of the same pressures as their private counterparts, public colleges increasingly have been getting their appropriations with strings attached, says Karen L. Kedem, vice president and senior analyst at Moody’s Investors Service, the credit-rating agency. “The public universities had to keep tuition flat or have only modest increases,” she says. “Their arms were tied as it related to a lever they’re used to pulling when state funding is constrained.”
Hardest hit have been regional comprehensive universities, generally second-tier institutions that offer low-cost graduate and undergraduate education aimed at meeting local work-force needs. Comprehensive colleges, which enroll more than two-thirds of all undergraduates attending public four-year institutions, are “the backbone of American higher education,” says Alisa Hicklin Fryar, a University of Oklahoma political scientist who studies them.
But unlike flailing private colleges, public institutions rarely slip beneath the waves for good. Instead they further trim their already lean budgets, squeeze more efficiency from faculty and staff, extend their geographic reach using online delivery of niche programs, or add courses geared to local work-force needs. States are typically too “strongly vested” in the survival of public colleges to let them fail, says Susan I. Fitzgerald, a senior vice president at Moody’s.
They don’t die, she says. They just change.
Most Beleaguered
Among the most beleaguered of America’s public higher-education institutions is the University of Maine system, which is scrambling to make up a projected $36-million budget shortfall in the 2015 fiscal year.
Daniel J. Hurley, associate vice president for state relations and policy analysis at the American Association of State Colleges and Universities, says Maine had “the worst combination of population emigration, a huge drop-off in high-school graduation, an economy in overall decline and state funding cuts, and a fiscally conservative governor—not a good recipe for long-term growth and sustainability.”
Maine is one of a number of states that have imposed tuition freezes or caps on their public colleges in exchange for state dollars. Its seven-campus university system has also suffered steep enrollment declines, with individual campuses’ undergraduate head counts over the past five years dropping 5 percent to 22 percent.
In response to the systemwide budget cuts, four campuses announced the elimination of dozens of faculty and staff positions last month. The flagship University of Maine at Orono accomplished its faculty cuts through attrition, but the University of Southern Maine fired 12 full-time faculty members in seven departments. A spokesman for Southern Maine says the university has no plans for further faculty layoffs, although it will let go 10 to 20 staff members by the end of the current fiscal year, in addition to 14 staff members whose positions were already eliminated.
In Pennsylvania, another state hit by the one-two punch of falling high-school graduation rates and declining state support, four universities announced layoffs and program cuts last fall.
In a bond rating issued last year, Moody’s praised the 14-campus Pennsylvania State System of Higher Education, known as Passhe, for its favorable operating performance and cash flow. But Moody’s cited among the system’s challenges “unionized faculty and staff, severely constraining Passhe’s ability to manage expenses in the face of challenged enrollment growth, as well as driving pension and health-care benefits that further pressure operating performance and balance-sheet revenue.”
Georgia, which has seen rising enrollments, has dealt with state budget cuts by ordering a series of consolidations. It most recently called for Southern Polytechnic University to merge with Kennesaw State University, another regional comprehensive.
David A. Longanecker, president of the Western Interstate Commission for Higher Education, says both Maine and Pennsylvania score poorly on a checklist he devised to evaluate the vulnerability of public and private colleges in the current economic climate. His test weighs a number of characteristics, including state demographics (the number of high-school graduates), population density, and the strength of the university’s business model.
The plummeting number of high-school graduates in the Northeast and Midwest has been a concern of college administrators for some time. That concern is particularly acute at regional comprehensives, many of which are geographically isolated, serving nearby students by offering programs relevant to their local economies.
Dennis P. Jones, president of the National Center for Higher Education Management Systems, points out that flagship institutions and urban-oriented colleges, like West Chester University, near Philadelphia, remain generally strong.
But he faults a “calcification of decision making” for the plight of some institutions. Colleges that postponed small cuts a few years ago are having to make drastic cuts today, he says, citing an old principle of engineering: “The more rigid the structure, the more likely it is to break when something hits it.”
Colleges that haven’t adapted to the new demographic reality are “trying to live off of an 18-year-old student body when there ain’t any more 18-year-olds,” Mr. Jones says. “You can be rural and succeed, but you can’t be rural and do things the way you’ve always done it and succeed.”
‘Play to Your Strengths’
The University of Maine at Fort Kent is as about as far north as you can get in the contiguous United States without crossing into Canada. Despite its isolation and its state’s considerable head winds, the university has raised its credit-hour enrollment by 1.6 percent over the past five years. “I wouldn’t call it gangbusters by any means, but given the demographics and the state economics, we’re pretty pleased with it,” says John Murphy, vice president for administration and finance.
With a spring count of 1,058 students, Fort Kent has seen its enrollment drop by more than 10 percent over the past five years. But after identifying a growing need for nurses in New England and making that a focus, the university saw enrollment in its nursing program grow by nearly 40 percent from 2011 to 2013. Today the program’s 416 students, including 151 online, make up 46 percent of the campus’s degree-seeking students.
Terrence J. MacTaggart, a higher-education consultant who twice served as chancellor of the University System of Maine, says he advises presidents and their boards to both innovate and emphasize existing programs that have market potential.
“Play to your strengths,” he says. “Remind the campus that they have a lot of value and they have things worth offering.”
‘If You Love Teaching’
One regional comprehensive institution that has thrived in spite of geographic isolation is Colorado Mesa University. Located in Grand Junction, four hours west of Denver, it has seen a 35-percent growth in enrollment over the past five years. Last fall it had 9,676 students, mostly undergraduates who pay $7,200 a year in tuition and fees.
Tim Foster, Colorado Mesa’s president, says it built on its tradition as a teaching institution and has strong enrollments in nursing and business, work-force needs that are important to the local economy.
Faculty members at Colorado Mesa teach four courses per semester, and 90 percent of the classes have 40 or fewer students. Mr. Foster says he interviews all prospective faculty members and tells them: “If you love teaching, come. If you want a TA to grade your papers, and you want to do research and not be bothered, don’t. You’re going to be miserable.”
Mr. MacTaggart, the former Maine chancellor, says that when he has assisted in presidential searches, leadership for change has usually been at or near the top of the list of desired attributes.
“Relatively few people in this business have been trained to do that,” he says. “The legacy is more how to manage or cope with the variety of stakeholder and interest-group pressure on the presidency and less how to lead change.”
He points to the example of North Dakota as a state that, given its oil-and-gas wealth, should be doing well. Instead, its State Board of Higher Education found itself last spring buying out the contract of its chancellor, Hamid A. Shirvani, after just 11 months in the post.
“You should factor in the quality of the leadership, both the board and the president,” Mr. McTaggart says. “And I would throw in whether the faculty has leadership that is realistic and looking at the challenges rather than having its head in the sand.”
