10 Colleges Facing the Biggest Budget Crisis

Posted on Tuesday July 12, 2011 by Staff Writers

With the economy sluggish in just about every country in the world, it’s no longer a surprise when you hear that a business or institution is facing cutbacks and budget problems. While we might like to think otherwise, colleges are, at their heart, businesses. Many have been hit hard by the recession and are up against severe budget cuts, often totaling tens — if not hundreds — of millions of dollars. While most of the hardest-hit colleges are public schools in states teetering on the edge of bankruptcy, private schools are feeling the burn as well, with reduced endowments and donations.

The ten schools we’ve listed here are among those that are facing some of the most serious problems with funding, but nearly all colleges out there are dealing with some kind of fiscal crisis right now. This problem could mean increased tuition, reduced programs of study, and fewer benefits, so it’s well worth any student’s time to learn how college budget cuts may directly affect their education and future.

University of California: It should come as no surprise that the California state college program is under some serious financial pressure. The state of California is facing extreme budget shortfalls and forced furloughs, teacher layoffs, and major cuts to the university system (to the tune of 20%) have rocked the state as it attempts to manage its nearly $41 billion budget deficit. All of the University of California’s campuses have been affected, and are implementing measures to try and cover the major cuts they’re experiencing. Freezes on administrator salaries, limited bonuses, hiring stoppages, limits on new enrollment, bans on new college construction projects, cuts in student grants, and tuition hikes are all part of the university’s attempts to weather the state’s most serious economic crisis to date.
University of Illinois: Illinois is a state in serious financial trouble. Corrupt politicians and unwise spending have left the state with an $11 billion budget gap, and state universities have to shoulder some of the burden of covering this gap. All three of the state’s university locations, Chicago, Champaign-Urbana, and Springfield, are suffering and cutting back on staff, programs, and tuition assistance. The state plans an additional 15% in cuts on top of already reduced allocations for the coming year, which could total about $400 million in losses. Additionally, the state owes back payments to the University of Illinois totaling over $487 million dollars. With cuts, unpaid state funding, and change slow to come, this university system is one of the most imperiled in the U.S. right now.
City University of New York: With the state of New York boasting a $3 billion dollar budget gap, state and city schools are starting to feel the pain of the budget crisis. The latest budget plan proposes delaying payments to schools across the board as a way to save money, making the job of balancing a college budget even more difficult. One of the hardest hit schools has been CUNY, which has seen some major changes in both its four-year and community college programs. In order to make up for over $300 million in budget cuts, the school has imposed a tuition increase of 15.5% for four year students and 22% for community college students.
University of Arizona: Arizona has been hit hard by the current economic crisis, with a 30% budget gap – a disparity that’s been passed along to the University of Arizona as well and is expected to rise to 40% in the coming year. The budget cuts have been exacerbated by the state deferring payments to the university, making it hard to pay professors and staff and keep the school running. Since 2009, the University of Arizona has seen about an 18% cut in state funding, with additional reductions of between $170 million and $235 million for 2011-12. The deficit is prompting a 22% raise in tuition for undergraduate students, pushing the cost of college above $10,000 a year– a first for the University.
University of Hawaii: You might not think a school located on an island paradise would be anything other than idyllic, but the school and the state as a whole are facing some big financial woes. While the state has made major changes to attempt to cover their budget shortfall, it simply hasn’t been enough, and a 21% gap is expected in the coming years — meaning big cuts for this state-run school. Over the past two years, the school has seen over $155 million in budget cuts, a number that’s likely to rise for the 2011-2012 year. School administrators are taking pay cuts, furloughs are being required, and layoffs have already begun as the school attempts to manage this staggering budget deficit.
University of Nevada: Struggling in the wake of the housing crisis, the state of Nevada is projecting a 54% budget shortfall for the upcoming year — the highest in the nation. Unfortunately for students at the University of Nevada, some of the money to cover that shortfall will have to come from the college’s budget. Over the next year, the school will lose more than $162 million in state funding. The school has yet to determine how to deal with these shortfalls, with some proposing layoffs and others pushing for tuition increases — the realities of each being quite serious for all colleges in the state, not just the University of Nevada. The school may end up closing down entire departments in the coming years to help with lack of funding, meaning many liberal arts programs could go by the wayside in favor of programs with heavier enrollment.
University of Oklahoma: The state of Oklahoma is struggling to manage a budget that has recently fallen well into the red, with a budget gap of about 18.5% and revenues that have dropped a staggering 26% since 2009. The state has fallen behind in its payments to the university to the tune of $116 million, which has made balancing the school’s budget a bit more difficult for administrators. While not as hard hit as some of the other schools on this list, this major budget crisis hasn’t been good for the school and has nearly shut down its already troubled medical department.
University of North Carolina: All branches of the University of North Carolina have been asked to cut back their spending between 5% and 10% for the coming school year. This is an attempt to help shoulder the state’s budget deficit of $2.5 billion. For the University of North Carolina, these cuts mean trimming about $26 million from their annual budgets, a process that will mean cutting back on administration, promoting greater efficiency, and raising tuition for incoming students.
Harvard: Think public schools are the only ones hit hard by the current recession? Private schools are feeling the pinch of the economic slump as well, with donors tightening their belts and reducing the amount of money they’re providing. Additionally, shrinking endowments have left Harvard with $11 billion less than in previous years. While that certainly hasn’t bankrupted the school, it has been cause for some cuts campus-wide. Further adding the school’s financial woes are loans for construction projects that are now coming due, which may be difficult to pay with a less secure endowment in hand. Professors are being pressured to retire early, and many of the school’s more plush benefits are being cut altogether. Harvard isn’t alone, as Stanford has seen huge cuts in recent years as well, especially in their athletics department.
University of Iowa: While Iowa’s budget crisis is perhaps less severe than that of surrounding states, it’s still having some big repercussions for this state-run school. Since 2002, the University of Iowa has seen major cuts in its budget, with a 4.3% budget cut following on the heels of a previous cut of $18.7 million. The school has trimmed between 2% and 3% of its budget in just about every department in the school. Tuition has gone up, layoffs are on the horizon, and new projects are being put on hold. This year, the school expects its budget to be cut by an additional $17 million, meaning further cutbacks for the coming school year.