Hard Times in Higher EducationDecember 11, 2008 |
The nation’s worsening financial crisis is rippling through nearly every sector of the economy. Higher education, usually more immune than other sectors, is no exception this time. As reported in our cover story, “Drastic Measures for Difficult Times,” the global financial crisis has battered college and university endowments and caused states generating less tax revenue to in turn cut funding to higher education.
In some places, charitable giving is down while tuition is up. Universities are cutting academic programs, laying off faculty and staff and even limiting enrollment.
All this comes at a time when Americans need a larger college-educated work force to remain globally competitive. Like the U.S. banking and auto industries, education groups are calling for financial assistance from the government. How are the typically underfinanced historically Black colleges and universities, which award nearly one-third of all baccalaureate degrees to African-Americans, faring in these times? Better than expected, in some cases.
“I was surprised how the conservative nature of investing at HBCUs has actually protected them from the whiplash larger schools face from the downfall of exotic financial instruments like derivatives and hedge funds,” says Peter Galuszka, who wrote our cover story.
Despite the less-than-dramatic drop in their portfolios, many minority-serving institutions lack a significant endowment and have fewer places to turn for operating funds than their wealthier counterparts. So, the pressure is on to retrench.
Amid the painful impact of the budget-cutting decisions, higher education leaders — oversight boards, presidents and department chairs — need to keep their eyes on access and retention of minority students.
Already some colleges are warning that the financial situation may affect need-blind admissions; that is, they’ll be admitting fewer students who need hefty financial aid packages. History dictates that when the economy sours for others, it spoils for African- Americans. Dr. Michael Lomax, head of the United Negro College Fund, certainly fears the worse.
“At most historically Black schools, 70 to 80 percent of students are low income and Pell (Grant) eligible. They have to take on extra jobs just to close the financial aid gap and now it’s just going to be harder to do that. I think we’re going to start seeing retention slip in the spring semester,” he says.
We applaud institutions that, in the face of their own financial hardships, are maintaining their commitment to lowincome students by awarding more financial aid to keep struggling students in school. At the same time, we’ll be watching closely as colleges and universities grapple with increasingly challenging budget shortfalls that will dictate tough choices. Let’s make sure student and staff diversity isn’t sacrificed in the process.
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