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February 11, 2010 3:18 PM The Stimulus That Saved College?

By Daniel Luzer

Many colleges were able to stay open last year due to the stimulus package. According to an article by Jack Stripling at Inside Higher Ed:

As enrollments soared and state dollars dried up, the temporary fix of federal stimulus money staved off significant financial losses for higher education that are still yet to be fully realized, according to a report released today by the State Higher Education Executive Officers (SHEEO).
In the 2009 fiscal year, state support for higher education fell by $2.8 billion to $77.9 billion, but an infusion of $2.4 billion in federal funds largely offset those losses.

This has turned out to be something of a mixed blessing for state governments, however. It appears colleges used stimulus money mostly to beg their states for more money. As the article explains, “Absent a dramatic recovery that no one expects in the coming year, however, colleges and universities are likely to feel the brunt of the economic downturn in 2010 and 2011.”

While the universities might need the money more now, despite cost cutting and tuition increases, state money for higher education usually declines during a recession.

Maybe it’s time to look at this differently. In the long term, state universities may not need just more money, but a new funding model altogether.

Daniel Luzer is the news editor at Governing Magazine and former web editor of the Washington Monthly. Find him on Twitter: @Daniel_Luzer