The Death Spiral in Public Higher Education

By Leo Welch

Rising tuition, decreased state funding, and financial pressures are leading to a “death spiral” for public higher education, according to University of Illinois professor Christopher Higgens. In a lecture at Eastern Illinois University earlier this year, Higgens said many taxpayers view higher education as a means to obtain credentials for the job market and view students as interested in the private gain of potential salary. These taxpayers, unfortunately, reject the view of education as a public good.

In Illinois, state funding support for higher education has been declining since 2002; there is no sign that this decline will be reversed. The current governor, Bruce Rauner, has essentially cut state support for colleges and universities 100 percent. He favors privatization of education and apparently doesn’t care if the public higher education fails. The current budget stalemate between Governor Rauner and House Speaker Michael Madigan shows no sign of resolution.

The lack of state funding has impacted the following Illinois community colleges and universities:

• Chicago State University – CSU administration ordered all employees and students to turn in keys by Monday, April 4, 2016 because CSU had not received state money for 10 months. In fall 2016, only 86 freshmen enrolled. There was a total student enrollment of 3,578 compared to 7,362 in 2010 —a trend that cannot be maintained. This enrollment drop is the highest of the 12 public universities in Illinois.
• John A Logan, Carterville – The board will terminate 55 employees including 38% of the full-time faculty. The college is $7 million in a budget hole. The board will possibly cut $300,000 from the athletic department.
• Heartland Community College, Normal – Heartland proposes to cut 23 positions although several of the positions involve early retirement. Tuition increases are part of the plan. No changes in athletics are planned.
• Northeastern Illinois University, Chicago – Last summer 60 employees were laid off. Hundreds of current employees, including faculty, staff, and administrators, are taking furlough days resulting in a $205 per person cut to individual paychecks. The university has used its reserves to pay the $6.5 million in Monetary Assistance Program grants to students that the state has failed to fund.
• Eastern Illinois University, Charleston – The faculty union, an Illinois Federation of Teachers affiliate, has voted to accept a salary deferral plan. The plan reduces base salary 2.5% for those that earn $50,000 or less, 5% for those with salaries of $50,001 - $75,000, 6.5% reduction for those with salaries of $75,001 to $100,000, and 7.5% reduction for those with salaries of $100,001 or more. If state funding does come in, every dollar that Eastern receives will go to repay the deferrals. If Eastern gets no funding in FY 2016 and FY 2017, there will be no payback.

Things are not looking better for EIU since their fall 2016 enrollment dropped by 14%.

• Harper College, Palatine – The administration has notified 20 full-time employees that they will be out of a job as of June 30, 2017. These layoffs will save the college $3.5 million. Harper expects to save an additional $1.5 million by reducing travel, supplies, and spending on printing. Illinois owes Harper $8 million plus $1.5 million in Monetary Awards Program grants.
• College of Lake County, Greyslake – The administration announced that 20 staff positions will be eliminated. President Jerry Weber said “if the budget impasse continues, as many as 40 jobs will be cut.” The cuts are an effort to make up for $8 million in funds College of Lake County did not receive from the state.
• Blackhawk College, Moline – The board was told that Moody’s Investor Service has lowered the college’s bond rating one step. Three important factors in the lower rating were 1) declining enrollment, 2) not receiving state aid since last June, and 3) the possibility of the state transferring its pension liability to colleges and universities. Blackhawk has a debt level of $29.4 million.
• Southern Illinois University – On October 17, 2016, SIU President Randy Dunn stated that in the current era of retrenchment the university will focus on reducing administrators, increasing grassroots political advocacy and closing the expense gaps in some programs that are not self-sustaining. Dunn calls this “reshaping the state-university covenant.”
• University of Illinois – U of I had a stopgap budget for the 2016 fall semester, but it fell short by about $750 million. On November 2, 2016, U of I President Timothy Killeen announced a five-year funding plan to be presented as legislation to the Illinois General Assembly. Although the bill has not yet been introduced, it is expected to include performance metrics in exchange for full state funding. As part of the performance metrics, the university is expected to agree to an annual report card on graduation rates, student retention, financial aid and other data. Currently, the U of I has a salary freeze for about 12,000 faculty and 2,800 civil service employees. Despite the budget challenges, the university had a record fall enrollment of 77,073 students for its three campuses at Urbana, Chicago and Springfield.

It remains to be seen whether performance-based funding as proposed by the U of I will be seen as a model for adequate state funding for other public colleges and universities. If the U of I plan is accepted by the state legislature, this approach could set a possible trend for the General Assembly to determine curriculum and other components of the higher education mission. Politicians might be making educational decisions normally made by faculty and educational professionals.