Report: Kentucky universities face financial woes
- A major national credit rating agency has reported that Kentucky’s nine public universities face a difficult financial future due to state funding cuts, pension demands and fewer high school students, according to the Lexington Herald-Leader.
- Moody’s said that competition for students will increase because universities are trying to reach the same shrinking pool of high school graduates, while students won’t be able to afford college because state income levels are low.
- The state’s universities have eliminated jobs, cut programs and raised tuition as state funding dropped by 21% over about the last decade, according to the Herald-Leader. Tuition revenue rose by more than 60% on average at the institutions over that period.
The report recommends charging higher tuition for out-of-state students and collaboration with business interests similar to strategies implemented by the University of Kentucky, with its $450 million campus dorm expansion, and other schools.
University officials nationwide are facing a similar dilemma with rising costs, less funding and fewer students. They are looking to the business community for support and repeating a message about the value of college education. They are also refining recruitment processes, examining retention and looking for creative ways to cut budgets.
The political climate, too, is a concern. The Washington Post has reported that conservatives are increasingly skeptical about funding liberal arts education, suggesting it is "elitist" and "politically correct" and that it fails to provide job-ready skills and a return on investment. Lawmakers have cut higher education spending by 54% since 2008. The Higher Education Act is up for re-authorization, and experts say Republicans want colleges to prove they are working to be more affordable and valuable.
While several colleges have closed or have laid off staff, and analysts such as Harvard University’s Clayton Christensen continue to predict that perhaps half of American universities will close or go bankrupt within a decade, one report last year from the Council of Independent Colleges (CIC) paints a brighter picture. It uses data to show that small and midsize private colleges are not on the brink of financial ruin and most can be financially healthy. “We think the prevailing public view is wrong,” Richard Ekman, CIC president, told Inside Higher Education.
- Lexington Herald-Leader Kentucky's public universities face a tough financial future, credit agency warns