The drumbeat of bad news for New York’s public and independent colleges continues. Last month it was the news that the Albany-based 103 year old College of Saint Rose would be closing its doors. This month, the bad news is from public colleges within the State University system. The well-regarded SUNY Geneseo announced that it was facing a $10 million “financial crisis.”
SUNY Fredonia, experiencing a 40% enrollment decline, plans to cut 13 degree programs to address a $10 million deficit, while SUNY Potsdam is set to cut nine degree programs over several years to address a $9 million structural deficit. Financial struggles extend beyond these institutions, with SUNY’s four-year public colleges and community colleges encountering serious financial difficulties in recent years.
A recent SUNY report indicates that, if current expense and revenue trends persist, the system will face an annual budget shortfall of over $1 billion in 10 years. Several SUNY colleges, including SUNY Maritime, Delhi, and Buffalo State, are grappling with deficits as well.
None of this should come as a surprise. In recent years the financial strain at SUNY has been increasingly evident. Even before the covid pandemic, SUNY had been hemorrhaging enrollments. Covid made it worse.
There is no single explanation as to why this situation has occurred, but public policies seem to have been a contributing factor. The Cuomo Administration had perhaps the biggest impact with its so-called “SUNY 2020” plan. That plan instituted regular tuition hikes at public colleges and universities and also severed the relationship between increasing college student financial assistance through the Tuition Assistance Program (TAP) and the now rising costs of SUNY tuition.
It was that second aspect of SUNY 2020 that hurt colleges. Prior to the Cuomo plan, the maximum TAP award would go up every time SUNY tuition increased. This ensured that the poorest public college students would see their tuition costs covered. It had also helped boost independent (private) colleges by adding state support to those schools to cover a portion of their tuition costs as well.
The damage came when the Cuomo plan severed that relationship and froze TAP awards while public college tuition went up. That impacted public colleges since the state was not required to cover the difference between the maximum TAP award and the rising SUNY tuition. That “gap” swelled over time and became known as the “TAP gap.”
The TAP gap eroded public colleges’ finances as they were regularly being asked to cover rising tuition costs for their poorest students. Independent colleges were hit too. Since TAP awards were frozen, they too had to figure out ways to cover the financial assistance that would normally have come from the state’s TAP.
Rising costs coupled with restrained financial assistance contributed to a drop in enrollments. Fewer students equal less money for colleges that were already seeing reductions in state assistance. That “one-two” punch surely accelerated the weakening financial situations at SUNY – and smaller independent colleges – and the results are clearer every day.
Demographic trends have hurt too and the experience in New York is consistent with the national experience. Yet, pointing to the national demographic trends to explain the problem doesn’t lead to a policy response.
The knee-jerk reaction is to do more of the same: Shift increasing costs onto college students and their families. Instead, policymakers should be looking at the issue in a different way.
Colleges and universities have important jobs: they train the next generation of workers and help them to better understand civic life. In addition, they are economic engines that create jobs that stimulate and anchor local economies. They offer a stimulus to local economies that are virtually guaranteed to succeed.
Policymakers too often look at the newest “shiny object” when it comes to economic development policies. In New York, we have seen very expensive plans fail and in some cases even trigger corruption.
Why not view public investments in colleges and universities as the cornerstone to economic development instead of a pay-as-you-go experience for college students and their families?
Governor Hochul will soon unveil her budget plans. Will she follow the well-trod path of soaking college students and their families for the costs of higher education? Or will she look at the issue differently and view public investments in institutions of higher education as a social and economic good worthy of such support? Time will tell. Students, parents and college communities across the state will be paying close attention.