Hit hard by the global financial crisis, colleges are cutting their budgets in ways that prompt fears about access and retention for minority students.
Call it the perfect storm for university funding. Just as economic downturns are squeezing state revenues for education, a financial meltdown on Wall Street is moving ahead with unprecedented size and speed. In mere weeks, college endowments have lost much of their value, interest on loans of all types has spiked and credit is much harder to acquire.
Already schools from Howard University to Harvard University are calling for emergency spending cuts. Schools are considering layoffs, unpaid furloughs for faculty and staff, hiring freezes and elimination of courses. Some are trying to generate resources — Clemson even asked its football team to kick in some of its earnings to help out. Financial aid is in for a big hit, which might make it impossible for many students to continue their education.
Minority-serving institutions, including historically Black schools that have long struggled financially, can expect to be especially hard hit. “I think there is a lag between this meltdown and the real outcome that will be produced,” says Dr. Michael L. Lomax, president of the United Negro College Fund (UNCF). “This is moving at warp speed, and we will see this play out much more forcefully in the spring semester.”
The Fallout
The crisis is being played out on several levels. State schools are facing draconian budget cuts, and private institutions are seeing donations dry up from graduates who are dealing with layoffs and foreclosures.
Many states including California, South Carolina and Virginia, among others, are caught in budget slumps. California faces an $11.2 billion state budget shortfall, so the California State University system may have to cut its 450,000 enrollment by 10,000 for the 2009-10 academic year, possibly turning away qualified students.
