Finance: A Reset for Higher Education - Almanac of Higher Education 2010 - The Chronicl... - 0 views
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George Mehaffy on 23 Dec 10August 22, 2010 A Reset for Higher Education By Joni E. Finney Many of us have seen trouble coming for a long, long, time. Did we really believe that endowment growth, state support, and tuition dollars could or would provide an unchecked revenue stream, tempered only by short downturns in the economy, followed by fairly quick recoveries? Did we really believe that we could expand administrative structures and shortchange instruction, but still maintain quality institutions? Did we think that poor completion rates and the achievement gaps between whites and minority groups could be solved only with more money? Did we honestly believe that expensive amenities and increased financial aid for upper-middle-class and wealthy students could be sustained? Of course not. To understand what needs to be done now-a "reset" in higher education-we need to first understand the changes pressuring our enterprise: deficits, demographics, and demand. States' structural deficits, or the gap that occurs when states fail to tax new types of economic activity, have been documented for years. A previously good economy permitted states to postpone those problems, but now, state leaders must revise their tax structures to generate more revenue. The most optimistic economic projections say the recession may end in 2013. Even then, states will be hard-pressed to return to the status quo in terms of appropriations. IN THE RIGHT COLUMN: Charts and Graphics on Finance BROWSE THE ALMANAC: More Statistics and State-by-State Profiles Many in higher education lament states' "disinvestment." The problem is much more complex. States have been reliable partners in financing higher education. While enrollments grew, state support also grew, by 24 percent from 2005 to 2008, followed by a decline of 1.7 percent from 2008 to 2010. At the same time, the federal government spent $6.6-billion in 2009-10 under the stimulus bill for states, an amount that increases to $23-billion once federal