Colleges Faced 'Tough' Fiscal Year With No End in Sight, Survey

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WASHINGTON--Nearly one-half of the nation's colleges and universities experienced midyear budget cuts during the 1990-91 academic year, according to a survey by the American Council on Education.

Moreover, higher-education administrators see no immediate relief from the budget problems affecting their schools, the survey indicated.

The eighth annual "Campus Trends" report revealed that 64 percent of public four-year institutions, 47 percent of public two-year schools, and 34 percent of independent colleges responding were forced to cope with midyear cuts as a result of the faltering economy.

In addition, about one-third of the schools--including one-half of the public four-year institutions--reported operating budgets that decreased or did not keep pace with inflation.

"It's been a tough year for colleges and all indications are it's going to be another tough year financially," said Elaine El-Khawas, the A.C.E.'s vice president for policy analysis and research, who directed the survey.

Ms. El-Khawas received responses from 359 colleges, or 81 percent of a sample of 444 institutions surveyed.

The financial status of postsecondary schools reported in "Campus Trends" is similar to that portrayed in a recent survey by the American Association of State Colleges and Universities, which found that 29 states had cut their higher-education budgets and 45 states were planing to raise tuition for next year.

Mergers, Privatization Seen

In the A .C .E. report, 84 percent of officials cited their schools' fiscal situations as one of the top three issues they will face over the next five years.

Only one-third of respondents said their colleges were in "excellent" or "very good" financial condition, compared with 48 percent in 1989.

Ms. El-Khawas said the poor financial outlook could translate into significant changes for higher education in the next several years. A number of colleges and universities may merge or close, she suggested, while more public colleges may look at the possibility of becoming private or semi-private institutions. Higher-education officials in Virginia and administrators and alumni of Miami University in Ohio have discussed a shift to semi-private status in recent months.

"Many of them feel they've made all the discretionary choices available. They feel they have no more choices, so looking for private support is a logical step," Ms. El-Khawas said. "If you've made cuts two, three, or four times, privatization could be an option."

At the least, she said, the talk of privatization underscores the fiscal woes facing colleges and universities.

The survey indicated that 45 percent of the schools that experienced midyear cuts implemented an increase in tuition and other student fees during the course of the year.

As colleges continue to raise the cost of attendance, Ms. El-Khawas noted, many students are choosing to go to less expensive schools or to go to two-year schools before transferring to four-year colleges. The survey found that 78 percent of two-year schools experienced an increase in enrollment.

Other students, Ms. El-Khawas said, have dropped out of the college-attendance pool altogether as a result of rising tuition and fees.

In other areas, the survey found that: . More than 8 in 10 institutions are undergoing some form of assessment. More than one-half of the assessments are state-mandated, while two-thirds will be used by regional accrediting agencies. . Sixty percent of all colleges increased their enrollment. But only 42 percent of the schools boosted their first-year enrollments, compared with a 62 percent rise in freshman enrollment in 1988-89. . Black enrollment increased at 31 percent of the schools, while 27 percent of respondents had growth in Hispanic and Asian American enrollment and 14 percent had a rise in American Indian enrollment.

Vol. 11, Issue 02, Page 8

Published in Print: September 11, 1991, as Colleges Faced 'Tough' Fiscal Year With No End in Sight, Survey
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