THE U.S. FINANCIAL CRISIS
AND ITS EFFECTS ON CHILDREN, YOUTH, FAMILIES,
SCHOOLS AND SERVICES

INFORMATION ON SELECTED INSTITUTIONS OF HIGHER EDUCATION
AND REPORTS ON HIGHER EDUCATION

Updated on May 18, 2009

Titles are presented in alphabetical order.
When a series of reports are summarized under a topic,
links to the full texts are shown after the chronology.

California’s University Systems:  Cutting Enrollments
Compiled from various sources named in the text and in the links below.

*** Los Angeles Times, November 18, 2008:  “As part of a plan to slash its 450,000 enrollment by 10,000 students for the 2009-2010 academic year, the California State University’s 23-campus system, the nation's largest, will push up application deadlines and raise the academic bar for freshmen at its most popular campuses, Chancellor Charles B. Reed said Monday (November 17). . . . Reed said he would consult with Cal State's Board of Trustees at their meeting Wednesday, but he already has the authority to impose enrollment restrictions and is planning to act soon. . . . California high school graduates probably will bear the brunt of the downsizing, officials said. The university typically admits 45,000 to 50,000 freshmen each year; if even half the reductions land on them, it would mean a 10% drop in first-year admissions. . . .  Reed said the Cal State system anticipates $66 million in midyear budget cuts, and further reductions for 2009-2010.”
*** Los Angeles Times, January 15, 2009:  “Saying they could not avoid a painful decision, University of California regents voted Wednesday to trim freshman enrollment for next fall by 2,300 students, or about 6%, as a response to reduced State funding during the worsening budget crisis. . . . While making freshman admissions a bit tougher, the regents encouraged more students to transfer as juniors to UC from California community colleges. They boosted the number of such transfers by 500, or about 4%, for the fall.  No change was made to graduate student numbers, or to the percentage of out-of-state undergraduates, which runs about 6%. . . . The regents also unanimously approved a salary freeze for 285 top UC administrators and an end to bonuses for those and other employees. Most of those affected by the salary freeze earn more than $200,000 a year, and some twice that.”
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California State University May Cut Future Enrollment by 10,000, Los Angeles Times, November 18, 2008:
http://www.latimes.com/news/education/la-me-csu18-2008nov18,0,6765141.story
UC Cuts Freshman Enrollment for Fall by 6%, Los Angeles Times, January 15, 2009:
http://www.latimes.com/news/local/orange/la-me-uc15-2009jan15,0,5833825.story


College of Santa Fe, New Mexico:  Struggling to Stay Open Through a Partnership Facilitated by the Governor

On May 1, 2009, “Governor Bill Richardson announced that the State of New Mexico is teaming up with the City of Santa Fe and Laureate Education Inc. to keep the financially troubled College of Santa Fe open.  The partnership is the number one recommendation of the Governor’s College of Santa Fe Task Force. . . . The partnership envisions the City of Santa Fe, with support from the Governor’s Office, purchasing the college and then Laureate operating the college under a lease.  The Governor committed up to $11 million in State and federal funds for the deal. . . . In addition, the Governor announced his support in helping to negotiate with creditors to bring down the debt of the college to manageable levels.” 
Governor’s press release: http://www.governor.state.nm.us/press/2009/may/050109_01.pdf
More information at the College of Santa Fe website:
http://www.csf.edu/


Duke University: Enduring a Troubled Economy
Compiled from several sources named in the text and in the links below.

***  Office of the President, March 2009:  “Like every other institution of higher education, nonprofit organization and indeed the nation as a whole, however, Duke faces financial challenges and constraints in the face of a global recession. The most notable and noticeable impact comes from the precipitous decline in global markets, which has led to a decrease in the value of Duke’s portfolio. Distributions from these investments make up about 16 percent of the University’s operating budget. As a result, distributions from the endowment and short-term capital investments are projected to yield less in revenues than previously expected to support Duke’s operations during the next few years. Duke officials expect a budget shortfall of about $125 million. . . . It will require the entire Duke community to work together to sustain and advance the University’s vitality during this period of historic transformation in the global economy. . . . Duke has established a website as a central location to keep you informed about what’s happening.”  The website provides details on efforts to adjust to the financial climate in (a) workforce and administration; (b) central administration; (c) academic; and (d) student financial and career services.
*** Bloomberg Press, March 2, 2009:  “Duke University President Richard H. Brodhead said the school will freeze salaries to address a $125 million budget shortfall. . . . Employees making more than $50,000 won’t have a salary increase in fiscal 2010. . . . Workers paid $50,000 or less with positive performance reviews will get a one-time $1,000 payment. . . . In addition, undergraduate tuition, fees, room and board will rise 3.9 percent to almost $50,000, the lowest increase in years.”
*** The Chronicle, Duke University, April 22, 2009:  “The University announced its plan to incentivize retirement for employees under its defined benefit retirement plan (on April 21). . . . The retirement incentive will make about 700 employees paid on a biweekly basis eligible for early retirement and would provide them with both health care benefits and an increased monthly pension, . . . The University is still reviewing how to incentivize retirement for those monthly salaried employees under the contribution retirement plan. . . . Panelists said they hope to make necessary reductions to the workforce voluntarily through Duke's defined benefit retirement plan, the efforts of the Duke Administrative Reform Team, and greater scrutiny of hiring.  But administrators noted that they cannot rule out the possibility of more job cuts in the future.”
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Duke Website -- Enduring a Troubled Economy:
http://www.duke.edu/economy/
*** The page on efforts to reduce expenses is at:
http://www.duke.edu/economy/duke_response/index.php
Duke Freezes Pay, Raises Tuition After $125 Million Shortfall, Bloomberg Press, New York City, March 2, 2009:
http://www.bloomberg.com/apps/news?pid=20601103&sid=aaNYuqn72pMw&refer=us
Employees Hear Changes to Retirement, The Chronicle, Duke University, April 22, 2009:
http://media.www.dukechronicle.com/media/storage/paper884/news/2009/04/22/News/Employees.Hear.Changes.To.Retirement-3720807-page2.shtml


Harvard University: Curtailed Tenure Searches and Early Retirement Packages
Compiled from several sources named in the text and in the links below.

*** Boston Globe, December 10, 2008: “Harvard University officials said yesterday (December 9) that they will postpone nearly all searches for tenure-track professors in the school's largest academic body, a sobering indication of how the economic crisis has hit the world's wealthiest university.  The move by the Faculty of Arts and Sciences, which also plans to freeze salaries for its 720-member faculty, followed an immediate freeze on the hiring of nonfaculty staff announced last month, dramatic signals of a university scrambling to right itself after its once ballooning $36.9 billion endowment plummeted 22 percent over the past four months.  The cuts announced yesterday will take effect next school year and continue for an undetermined period until the budget picture improves.”
*** Harvard Crimson, March 6, 2009: “Over 150 workers, union activists, students, and faculty members gathered outside the Holyoke center yesterday  (March 5) to protest potential layoffs due to University budget cuts. . . . University-wide budget cuts, due to a predicted drop-off in endowment value, have prompted the creation of early retirement packages, and 1600 workers are currently eligible.  Administrators estimate a 30 percent fall in endowment value by the end of the fiscal year.”
Harvard Curtails Tenure Searches, Boston Globe, December 10, 2008:
http://www.boston.com/news/education/higher/articles/2008/12/10/harvard_curtails_tenure_searches/
Students, Staff Protest Potential Layoffs, Harvard Crimson, March 6, 2009:
http://www.thecrimson.com/article.aspx?ref=527005


Higher Education: General Reports on the Effects of the U.S. Financial Situation
Compiled from several sources named in the text and in the links below.
Information on single institutions is reported in separate items.

*** Statement by American Council on Education President, American Council on Education, October 29, 2008:    In commenting on this year’s College Board report on tuition and student aid, the press release of the President of the American Council on Education (ACE) stated that “this year’s report may prove only to be a snapshot of a time in history that we might soon be referring to as ‘the good old days.’ . . . in the last six months we have witnessed an extreme downturn in our economy and we are now seeing dramatic cuts in revenue to higher education as States have slashed appropriations, donors have withdrawn and endowments have posted net losses. For example, at least 17 States have already implemented cuts to public colleges and universities.  While this will likely mean tuition increases in these States, such information is not included in the College Board data because the cuts occurred after June of this year. . . . Private institutions, too, given the loss of endowment income and expected cutbacks in private giving, will likely be forced to increase tuition at the same time they struggle to increase institutional financial aid.”
*** Letter to the U.S. Secretary of Education, National Governors Association (NGA), October 30, 2008:    In a letter to the Secretary of Education, Governor Dave Heineman (Chair of the NGA’s Education, Early Childhood and Workforce Committee) and Governor Timothy Kaine (Vice Chair) wrote:  “On behalf of all the nation’s governors, we formally request that you waive the federal ‘Maintenance of Effort’ (MOE) mandate in the Higher Education Opportunity Act for all States in the coming fiscal year, or the next two fiscal years for States with biennial budgets.  When Congress imposed the MOE provision on States, it also granted the Secretary of Education the authority to waive the provision due to ‘a precipitous and unforeseen decline in the financial resources of a State or State educational agency.’ . . . Already twenty-seven states are facing combined budget shortfalls of more than $26 billion, a number that is expected to grow in the coming months.  With the national economy not expected to recover until late 2009, states expect revenue shortfalls to continue for the next several years.
*** Tough Times Strain Colleges Rich and Poor, New York Times, November 7, 2008:   “Tough economic times have come to public and private universities alike, and rich or poor, they are figuring out how to respond. Many are announcing hiring freezes, postponing construction projects or putting off planned capital campaigns.  With endowment values and charitable gifts likely to decline, the process of setting next year’s tuition low enough to keep students coming, but high enough to support operations, is trickier than ever. . . . Budget cuts mean that campuses won’t be able to fill faculty vacancies, that the student-faculty ratio rises, and that students have lecturers instead of tenured professor. . . . Many students, increasingly conscious of costs, are flocking to their State universities. . . .  But with this year’s State budget problems, tuition increases at public universities may be especially steep. Some public universities have already announced midyear tuition increases.”
*** Survey on the Impact of the Economic Conditions, National Association of Independent Colleges and Universities, December 18, 2008:    NAICU surveyed private institutions between November 18 and December 12.  The results show effects of the fiscal downturn in six areas of financial health, as well as the institutions’ most pressing concerns.  The survey “found that fundraising, endowments, and the demand for student aid have been greatly affected by the economic downturn.  To offset the effects of the fiscal constraints, independent colleges are employing several budget-saving strategies, specifically freezing hiring, slowing construction/renovation projects, and restricting staff travel.”
*** College Endowments Loss Is Worst Since ‘70s, New York Times, January 26, 2009:   “The value of university endowments fell about 23 percent on average in the five months ended Nov. 30, according to two newly released reports. The steep declines are forcing colleges and universities across the country to contemplate wage freezes, layoffs and a halt to construction projects. . . . When endowments were categorized by size, even the least affected — those worth more than $1 billion — were found to have lost an average of 20 percent. Those of $500 million to $1 billion saw the biggest decline, about 25 percent. Public institutions lost an average of 24 percent, private institutions 22 percent.”
*** Community Colleges Play Key Role in Tough Economic Times, The Christian Science Monitor, April 11, 2009: “In Pennsylvania, all 14 community colleges are offering or finalizing plans for tuition assistance to locals who've lost jobs.  More than 1,000 people are already signed up, says Diane Bosak, executive director of the Pennsylvania Commission for Community Colleges.  Among the nation's 1,200 community colleges there is no tracking of how many are making similar gestures, but examples can be found in New Jersey, Michigan, Illinois, Minnesota, and Washington State. . . . Inspired by the colleges in his home state of Pennsylvania, Sen. Bob Casey (D) has just proposed a bill that would reimburse community colleges up to $1,000 for each displaced worker whose tuition is waived. The funds would come from the US Department of Labor's Community-Based Job Training Grants program.”
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Statement by ACE President Molly Corbett Broad on College Board’s Annual Report on Tuition and Student Aid, October 29, 2008:
http://www.acenet.edu/AM/Template.cfm?Section=Press_Releases2&CONTENTID=29716&TEMPLATE=/CM/ContentDisplay.cfm
Letter to the Honorable Margaret Spellings from the Chair and Vice Chair of the Education, Early Childhood and Workforce Committee, National Governors Association, October 30, 2008:
http://www.nga.org/portal/site/nga/menuitem.cb6e7818b34088d18a278110501010a0/?vgnextoid=9dd82370cee4d110VgnVCM1000001a01010aRCRD
Tough Times Strain Colleges Rich and Poor, New York Times, November 7, 2008:
http://www.nytimes.com/2008/11/08/education/08college.html?_r=1&th&emc=th&oref=slogin
Survey on the Impact of the Economic Conditions, National Association of Independent Colleges and Universities, December 18, 2008:
http://www.naicu.edu/news_room/survey-on-the-impact-of-the-economic-conditions
Data Show College Endowments Loss Is Worst Since ‘70s, New York Times, January 26, 2009:
http://www.nytimes.com/2009/01/27/education/27college.html?th&emc=th
Community Colleges Play Key Role in Tough Economic Times, The Christian Science Monitor, Boston, Massachusetts, April 11, 2009:
http://www.csmonitor.com/2009/0411/p99s01-usgn.html


Kentucky Community and Technical Colleges:  Tenure Policy and Health Insurance Changes
Courier-Journal, Louisville. (March 14, 2009).

“The Board of Regents for Kentucky's community and technical colleges voted yesterday (March 13) to eliminate tenure for new employees and drop health insurance for new retirees. . . . Officials said the change, which won't affect current faculty who are designated as tenured or tenured track, will save money and increase flexibility in hiring.”
Full text:
http://www.courier-journal.com/article/20090314/NEWS01/903140427/1060/NEWS0105


Student Financial Assistance for College and the Fiscal Crisis
Compiled from several sources named in the text and in the links below.

*** Student Loan Debt Outpaced Salaries for Class of 2007, Pew Charitable Trusts, October 22, 2008:  In its third annual report on student debt, the Pew Charitable Trust’s Project on Student Debt states, “College seniors who graduated in 2007 carried six percent more student loan debt than the class of 2006, while starting salaries for recent graduates rose just three percent in the same period. . . . Based on data reported by hundreds of four-year colleges across the country, the national average student loan debt for 2007 graduates is $20,098, although the Project on Student Debt estimates that the actual average is higher – $21,900. . . . ‘The class of 2007 graduated before the financial downturn, but today's tough economic times make high student loan payments even harder to bear,’ said Robert Shireman, the Project's Executive Director.  ‘Student debt levels are rising year after year, and starting salaries have not kept up.’”
*** U.S. Buying More Loans to Students, New York Times, November 7, 2008: “The government has announced plans to expand purchases of the student loans it backs in an effort to head off a potential shortfall next year. . . . While students are still able to obtain federally backed loans, the credit crisis has hurt the lenders that provide them.  Dozens have stopped offering the loans, blaming market conditions. . . . Student loans, like credit cards and mortgages, have long been financed by selling bonds to private investors. But in recent months, investors have shown little interest in purchasing either lenders’ bonds or their federal student loans, despite their government guarantee.  Student lenders have carried loans made years ago on their books, unable to sell them.  When some student lenders saw their financing costs spike on older government-guaranteed loans they were waiting to package and sell, that put more stress on the troubled industry. The government hopes that providing a new source of financing for those loans will ease some of the pressure. . . . Congress has authorized the Education Department to buy back loans made from 2003 to 2010. . . . The government hopes that by serving as a buyer of last resort for student loans, it will attract investors who have shunned the loans. A private company, assured of a fallback buyer, could buy the loans and borrow from private investors to keep operating.”
*** Measuring Up 2008, The National Report Card on Higher Education, National Center for Public Policy in Higher Education, December 2008:  According to this report, “he deterioration of college affordability throughout the United States has contributed to the disparities in higher education opportunity and attainment.   There are several dimensions to this national and State problem.  First, college tuition continues to outpace family income and the price of other necessities. . . . Second, the erosion of college affordability has been exacerbated not only by increased tuition, but also by relatively flat or declining family incomes. . . . Third, students who do enroll in college are taking on more debt to maintain their college access.  More students are borrowing and they are borrowing more. Over the last decade, student borrowing has more than doubled.  Another dimension of the problem of college affordability involves the financial aid priorities of colleges and universities, which are not in synch with public policy priorities. Currently, students from middle- and upper-income families receive larger grants from colleges and universities than students from low-income families receive.”
*** Colleges Profit as Banks Market Credit Cards to Students, New York Times, December 31, 2008:  This article concerns relationships between colleges/universities and banks to generate student credit cards.  “The more students who take the banks’ credit cards, the more money the university gets.  Under certain circumstances (a university) even stands to receive more money if students carry a balance on these cards. . . . But debt incurred in college becomes a serious burden at graduation, especially in a recession in which jobs are scarce.  A survey of more than 1,500 college students by US PIRG in Washington found that two-thirds had at least one credit card. Seniors with balances had an average debt of $2,623 on their cards.” (U.S. PIRG is the federation of state Public Interest Research Groups.
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Student Loan Debt Outpaced Salaries for Class of 2007, Pew Charitable Trusts, Philadelphia, PA, and Washington DC, October 22, 2008.
http://www.pewtrusts.org/news_room_detail.aspx?id=45424
U.S. Buying More Loans to Students, New York Times, November 7, 2008:
http://www.nytimes.com/2008/11/08/business/08loan.html?_r=1&ref=education&oref=slogin
*** Also see -- U.S. Secretary of Education Margaret Spellings Takes Steps to Ensure Students Continue To Have Uninterrupted Access to Federal Student AID, Press Release, November 8, 2008:
http://www.ed.gov/news/pressreleases/2008/11/11082008.html
**** And see -- U.S. Department of Education, Ensuring Student Access to Federal Loans (fact sheet), November 2008:
http://www.ed.gov/students/college/aid/ecasla-facts.html
Measuring Up 2008:  The National Report Card on Higher Education,  National Center for Public Policy in Higher Education, San Jose, California, December 2008:
http://measuringup2008.highereducation.org/
Colleges Profit as Banks Market Credit Cards to Students, New York Times, December 31, 2008:
http://www.nytimes.com/2009/01/01/business/01student.html?ref=education


University of Arizona: Many Reductions and a Proposed Tuition Increase, but Stimulus Funds Help
Compiled from various sources named in the text and in the links below.

*** UA News, March 11, 2009:  “The Arizona University System is facing a $141.5 million midyear State budget cut.  The University of Arizona's share of the cut is approximately $56 million, bringing the UA's total state funding cut for the year to about $76 million. . . . As a result of a $20 million budget cut in the beginning of the fiscal year, the UA already has experienced a loss of 195 full-time equivalent employees, an $11 million reduction in academic colleges and departments, a $3 million reduction in academic support and student service units and a $6 million cut in central administration units. Midyear budget planning efforts resulted in a number of other cost-savings measures, including the implementation of a hiring freeze and a funds sweep. In response to the midyear cut, the University will be forced to impose an additional 5 percent reduction in state-funded units, redirect student tuition dollars and deplete emergency operating reserves, according to materials provided to the Board of Regents. The cut also will mean the loss of approximately 600 positions across campus and a substantial reduction in support for the University's community outreach units.  With further cuts anticipated in the 2010 fiscal year, the UA is planning for an employee furlough in 2009-2010. The University may also be required to consolidate business and information technology functions; close academic programs, departments and colleges; and increase class size and reduce course offerings. To achieve permanent reductions that have been temporarily offset by the use of emergency reserves in 2009, the UA will also have to look at increasing student tuition and fees and making changes to student scholarship programs, according to materials provided to the board.”
*** Office of the President, April 9, 2009:  In a request to the Board of Regents for mid-year tuition increases, the UA President said that “the University of Arizona has said since January of this year that we could withstand a mid-year rescission of $40 million without having to increase tuition beyond what was approved in December 2008.  The mid-year rescission to UA, however, was nearly $56 million. That action, coupled with the budget reduction the University incurred at the start of FY 2009, translates to a permanent reduction of $77 million in our State appropriation this year.  We do not know as of today whether there will be an additional reduction imposed on the universities to reach closure on FY 2009, and as stewards of the University, given the State revenue projections, we know additional permanent reductions for the FY 2010 budget year are ahead.  Our University leaders have met the FY 2009 budget rescission mandates by: (a) reducing $11 million in academic college and departmental budgets; (b) reducing $3 million in operational funds for academic support and student services units; (c) reducing $6 million from central administration budgets; (d) sweeping state-funded personal services lines; (e) implementing a strict hiring freeze, with an exception only to positions that directly impact health and safety, compliance, or critical needs of the University; (f) implementing a  freeze on contracts above $50,000; (g) renegotiating utilities contracts to achieve $3 million savings; (h) consolidating units and services to achieve savings; (i) imposing an additional 5% reduction in state-funded units; (j) redirecting student tuition dollars to be used to meet the mid-year rescission; and (k) depleting emergency operating reserves.  The impact of these actions meant a cumulative loss of approximately 600 positions across the UA, limited the number and breadth of courses offered, and significantly curtailed the support and service provided university community outreach units. . . . As we enter FY 2010, the University will need to identify permanent funding to offset $15 million of one-time funds used to meet our mandated reductions for FY 2009, if they remain at the current level.  Further permanent reductions in FY 2009 and FY 2010 exacerbate this number.. . . . Unfortunately, despite these budget management actions, the University will need to grow our revenues. Our approach in this mid-year cycle is to request approval for an economic recovery surcharge.  An economic recovery surcharge of $1,100 to base tuition, effective Fall 2009, is approximately half of the identified gap between budget shortfalls and the University's needed revenues to sustain our quality.  This amount allows for a factor for increased need-based student financial aid. The economy recovery surcharge would be double the amount if not for the anticipated infusion of federal dollars from the American Recovery and Reinvestment Act's State Fiscal Stabilization Fund.”
*** UA News, May 7, 2009:  “U.S. Rep. Gabrielle Giffords announced this week that researchers at The University of Arizona will receive $522,402 in federal economic recovery funds.  The funds will be distributed through the National Institutes of Health and will help pay for three studies at Arizona's oldest institution of higher learning.”
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Regents to Discuss University Budget Impacts, UA News, March 11, 2009:
http://uanews.opi.arizona.edu/node/24491
Proposals for Mid-Year Tuition Increases, Office of the President, April 9, 2009:
http://www.president.arizona.edu/prescomm_more.cfm?f_ID=104
Giffords Announces Stimulus Funds for UA, UA News, May 7, 2009:


University of Georgia System:  Tuition Increase and Emergency Fee
Athens Banner-Herald. (April 15, 2009).

“The University of Georgia stands to collect an additional $14 million in tuition next year from its 34,000 students, mainly because of a 25 percent hike in what freshmen will pay -- one of the largest tuition increases in the university's history. . . . A special emergency fee of $100 a semester per student will add about $7 million more to the university's coffers.  . . . The university still faces an 11 percent cut in State funding for the fiscal year that begins July 1.  To make ends meet this year, UGA administrators cut hundreds of jobs by ordering a partial hiring freeze and allowing hundreds of jobs to remain vacant when they came open.  Also, the university often replaced faculty who retired or moved on with lower-paid temporary, part-time workers. Administrators also reduced maintenance, delayed repairs and postponed renovations.”
Full text: 
http://www.onlineathens.com/stories/041609/uga_429685988.shtml
Also see -- Fixed Tuition Program Halts, The Colonnade, Georgia State University, April 17, 2009:
http://media.www.gcsunade.com/media/storage/paper299/news/2009/04/17/CampusNews/Fixed.Tuition.Program.Halts-3713932.shtml


Washington State University System:  Position Cuts and a Tuition Increase
Seattle Post-Intelligencer .(May 1, 2009).

“Washington State University plans to cut 371 jobs and eliminate several academic programs to make up a $54 million deficit in its budget for the next two years. . . . The budget passed by the Legislature last week requires WSU to reduce its budget by more than $100 million. But money from federal economic stimulus spending, plus a 28 percent increase in tuition over the next two years, would reduce that amount to $54 million, or 10.38 percent of its current budget, WSU officials said. . . . The job losses will be felt most heavily at the main campus in Pullman, but branch campuses in Vancouver, the Tri-Cities and Spokane will also have cuts.  Of them, 165 will come from eliminating positions that are currently vacant, but 206 positions will require layoffs.”
Full Text:   http://www.seattlepi.com/local/6420ap_wa_wsu_budget.html

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