If you think the academic world might escape today's tough economy, think again. Saturday's New York Times reports on many institutions, private and public alike, cutting faculty jobs, freezing new hires, reducing financial aid, and in some cases raising tuition.
The economic downturn--what former Labor Secretary Robert Reich now calls a "mini-depression"-- has reduced the returns from many university endowments, which depend largely on investment income to fund a part of their operating expenses and student financial aid. Vassar College in Poughkeepsie , N.Y., for example, saw the value of its endowment drop almost 10 percent since June. And Dickinson College in Carlisle, Pa. saw its endowment drop 20 percent since that time.
The bad economic prospects are forcing students to consider public colleges over private institutions, but states are also facing tough times as sales, income, and property taxes go down. In California, Governor Arnold Schwarzenegger proposed another $65.5 million cut for the state's university system, on top a $48 million cut already announced for this year. In New York , some state schools have already announced tuition increases to cover budget shortfalls.
Faculty at public and private institutions face job cuts and hiring freezes. University of Florida has cut 430 faculty and staff positions, and is expecting another 10 percent cut in state funding next year. Arizona State University has ended contracts with 200 adjunct faculty. Boston University, Brown, and Cornell have announced hiring freezes.
Some campuses, particularly private institutions, that had previously announced more generous financial aid for students, are finding it harder to stick to those plans. Tufts University in Medford, Mass., has had a "need-blind" policy for two years, where the university would admit the best qualified candidates regardless of financial needs. Tufts has suspended its capital projects to make more funding available for student financial aid, but that may not be enough.
Lawrence S. Bacow, president of Tufts, told the Times, "The target of being need-blind is our highest priority. But with what's happening in the larger economy, we expect that the incoming class is going to be needier. That’s the real uncertainty."