Colleges caught in a bind More students, falling budgets cause crises.

August 05, 1992|By New York Times News Service

WASHINGTON -- American higher education is experiencing a boom in demand for its services and a bust in its finances, according to a report from the American Council of Education.

Though a record number of students are enrolled in colleges and universities across the country -- 14.2 million in 1991 -- higher education institutions are having the toughest financial time in a decade.

According to the survey, "Campus Trends, 1992," 57 percent of all colleges and universities saw their operating budgets cut in 1991-92, up from 45 percent the year before.

Many were forced to raise tuition, suspend faculty hiring, limit course offerings or put off repairing buildings and making other capital improvements.

The report attributes some of this financial strain to the growth in student enrollment. But declining revenues and budget cuts are also behind the financial pinch.

"The financial problems have grown with demand," said David Merkowitz, director of public affairs for the American Council of Education, which has produced the annual survey for nine years. "This is not a declining industry. The problem is a financial one, particularly in the public sector: cuts from state support."

As in 1990-91, public institutions suffered the most. Mid-year budget cuts were reported by 73 percent of public two-year colleges, 61 percent of public four-year colleges and 35 percent of independent institutions.

In addition, nearly half of public four-year institutions -- 47 percent -- had operating budgets for 1991-92 that were the same as or lower than the ones for the previous year.

Forty-three percent of public two-year colleges found themselves in the same situation, compared with 19 percent the previous year.

According to the survey, with adjustments for inflation, two-thirds of all public colleges and universities lost financial ground in the last year.

Mr. Merkowitz said the recession was part of the problem plaguing public colleges and universities. But another reason for the financial difficulties, he said, was that state financing for higher education institutions is discretionary.

He said states now have so many more mandated responsibilities that there is less money available for higher education.

"This is at least in part a product of the shift in responsibility that took place under the Reagan administration," Mr. Merkowitz said. "The federal government has shucked off responsibilities, and these have landed on the states, and, especially during a recession, it has reduced the flexibility of the states in terms of the kinds of programs they can fund."

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