A week after the state Assembly Higher Education Committee held a hearing on the state’s student financial assistance programs, the impact of New York’s higher education fiscal policies came under renewed scrutiny.
The attention is the result of the decision of the College of Saint Rose, a hundred-year-old college based in Albany N.Y., to close its doors after the Spring 2024 academic semester. The private college’s finances had eroded significantly since 2014 and its last-minute decision to seek a government bailout was not timely enough to forestall its closure.
That another independent (private) college was closing its doors, unfortunately, is not news. Over the past few years, ten New York State schools that confer degrees have closed and three more (in addition to Saint Rose) have announced their closures.
The college identified a drop in enrollment and the impact of the COVID pandemic as the bases for its financial collapse.
The reasons for the closure will undoubtedly be investigated to tease out what other issues, such as poor management decisions (the campus was deeply in debt for example), that contributed to Saint Rose’s failure. After all, there are plenty of colleges in New York – including two dozen public colleges – with declining enrollments and all had to deal with the pandemic.
But for the students and employees of Saint Rose, the news is devastating. The college’s students will have to find a new college to attend – and hope that they can afford the new college and transfer their credits. Hundreds of CSR employees face unemployment as of May of 2024. For the community at large, it’s bad news too. The College owned nearly 90 properties right in the middle of the City of Albany. Unless those parcels get purchased, the closure will be like the financial equivalent of a “neutron bomb” hitting the City, and property values could plummet. Small businesses that serve the college’s students and staff will also take a huge hit.
Saint Rose is just the latest casualty in New York’s higher education system. The financial failures of private colleges are not just a New York State phenomenon. Colleges across the nation are struggling, reportedly for similar reasons: dropping enrollments and the disruption caused by the COVID pandemic.
There is little that the state can do about pandemics and not much it can do to help boost enrollments at private colleges, but New York’s fiscal policies have contributed to the financial stress of smaller private colleges – as well as the finances of four-year and two-year public colleges.
Until the middle of the 20th Century, New York’s system of higher education was based in the private sector. That changed with the creation of the State University of New York in 1948. At that time, lawmakers stipulated that SUNY “would only supplement the private institutions and not compete with them.” That changed when former Governor Nelson Rockefeller turbocharged SUNY to one of the largest public institutions in the nation. Seventy-five years later, public and private colleges have educated millions of students and are economic and cultural anchors for communities across the state.
There are two recent changes to the state’s assistance to private colleges that have contributed to the current crisis. The first is the state’s reduction in aid through its Bundy Aid program.
Bundy Aid is the state’s only unrestricted aid to private colleges to help ensure assistance in providing financial and institutional help to college students. The program was started in the late 1960s at the same time as state support for SUNY was increasing.
Starting in the early 1990s, state support was cut to Bundy Aid and today is funded at $35 million, which is just 18 percent of statutory levels, meaning that the state should be spending some $200 million.
In addition to the cuts to the state’s unrestricted assistance to private colleges, under former Governor Andrew Cuomo, New York also curtailed direct financial assistance to college students, which further impacted state support. As part of the Cuomo-driven “SUNY 2020” initiative, New York severed the informal agreement that the maximum award under the state’s Tuition Assistance Program (TAP) would match the tuition charged at SUNY. Since TAP is available to both public and private college students, severing that relationship and then freezing the size of the maximum TAP award not only hurt public colleges (creating the now infamous “TAP gap,” which undermined SUNY college finances) it also hurt private colleges. Nearly one third of all college students in New York receiving TAP attend private colleges; thus freezing TAP awards financially impacted private colleges as well.
Undermining college finances not only impacts students and employees, as seen by the plight of the College of Saint Rose, it hurts communities. Many of the colleges in upstate New York are the economic engines of their communities. When they shut down, those communities are devastated. In terms of the state’s assistance policies, curtailing support for colleges harms economic development by cutting jobs and pummeling local economies.
As Albany considers what should and can be done about its weakening higher education sector, it should stack up college support against its current $10 billion spending on economic development programs. Investing in higher education always results in positive economic returns, which cannot be said for some other state development programs.