The credit crisis has arrived college campuses around the country, but it is not just affecting students. For the last few decades, education costs have risen rapidly – and students have been taking out larger and larger loans to fill their side of the difference. However, not all of the increased costs were charged to the students – in many cases, the colleges and universities themselves took advantage of cheap interest rates and the availability of credit. Now that the easy money ride has come to a full stop, these schools are looking for new ways to pay down old expenses at the same time they’re trying to manage stagnant demand for higher education.
In most economic recessions, demand for education rises rapidly as people find themselves out of work and seeking newer, more in-demand skills. Unfortunately, due to the heavy debt load of society and the high costs of higher education, many who would like to return to college cannot figure out a financial means of doing so.
In order to attract more students, the colleges would need to lower costs – or, at the very least, slow down the rate of acceleration in these prices. With a looming debt load to worry about, there are fewer options to achieve this:
- Faculty – Colleges are hiring fewer professors on a tenure track. Adjuncts are teaching more higher level classes, and the emphasis is shifting back toward classroom instruction rather than pure academic research.
- Departments – Some controversial, cutting edge, or simply experimental departments are being phased out. During the 1990s and early 2000s, many new programs of study were added in unorthodox fields. Now that money is tough to come by, the ones that haven’t achieved profitability are at greater risk for being shut down.
- Student Services – Another cost that ballooned over the last few years were associated with on-campus student services. Many clubs and student-run organizations are seeing reduced funding – some may even be forced to cease operations.
Even with the reductions in cost explained above, many schools are still finding themselves forced to raise tuition rates. For the students, this means that alternative sources of funding like financial aid, grants, and scholarships are more important than ever. Some help is coming for students through increases in government spending, but the schools themselves are not necessarily increasing their institutional financial aid programs.
