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Of furloughs and freshmen: economy casting a pall over the new school year.

DESPITE THE AMERICAN RECOVERY AND REINVESTMENT ACT, the national economy is still gloomy. As the new school year starts, the downturn is continuing to send reverberations through higher ed.

For some, the situation is exacerbating existing problems. A "summer cash flow shortage" at Lambuth University (Tenn.) meant not being able to meet payroll for a few months. As of mid-August, employees had only been paid through June. "We got here on our own, but the bad economy has made our problems worse," says spokeswoman Alicia Russell. "It's harder to get loans from banks. It's harder to get donors' dollars." The new school year brings the buzz of students returning to campus--and tuition payments. "We have a balanced budget for the fiscal year starting in July. We see our financial problems being a thing of the past," she says.

Things are not as bad at Guilford College (N.C). When the economy started to tank last year, officials cut $2.7 million from the budget and focused on admissions, says President Kent Chabotar. "Our first-year traditional class is 50 percent North Carolina for the first time I can remember." The turmoil in public institutions both in and out of state caused more students to take the private route, he theorizes.

Public institutions are doing their best to respond to state budget cuts. Grabbing national headlines on a regular basis are the money-saving furloughs states are imposing on employees at public colleges and universities.

Most public announcements about furloughs focus on shared pain and pulling together during this hard time. But University of Wisconsin-Stout Chancellor Charles Sorensen is crying foul over the furlough implementation there. Employees at two- and four-year institutions in the University of Wisconsin system face four furlough days over the next two years, but unionized teachers, also paid with public funds, in the Wisconsin Technical College System and in K-12 don't. This amounts to a pay cut for university faculty, while teachers in other sectors are receiving raises, Sorensen points out in an online editorial. The campus community is happy the chancellor spoke up for them, says spokesman Doug Mell, adding that administrators are trying hard to mitigate the effect on students. Yet scheduling 8,000 days of time off is difficult. Class time doesn't usually have to be cut, but a lot of professors' workloads--such as grading and research takes place out of class.

"[Furloughs are] a temporary fix for a long-term problem;' say Gary Rhoades, general secretary of the American Association of University Professors, noting a long-term trend of shifting funds away from instruction and toward administrative needs. The AAUP's online "Financial Crisis FAQ" helps guide members. "The biggest concern [we hear] is that colleges and universities aren't exploring all the options for saving money," he says. "Furloughs won't enable institutions to move personnel resources to the production workers--faculty, researchers, student services."

Although state funds may be decreasing, they often make up less than half of the budget; the revenue streams of tuition, fees, and grants are stable or increasing, Rhoades points out. Chabotar agrees with some of Rhoades' points but says higher ed has grown so complex that staff support is necessary. Like aircraft carriers, faculty "need picket ships and supply lines. That is what administration is," he argues.

It seems higher ed has to weather this storm a while longer.
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Title Annotation:BEHIND the NEWS
Author:McClure, Ann
Publication:University Business
Geographic Code:1USA
Date:Sep 1, 2009
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