Yesterday I focused on the enrollment challenges at private nonprofit colleges and the ways applicants and their parents can ensure the most favorable price. Today the focus shifts to public universities.
In an earlier post, I mentioned the expected enrollment shortfall at Central Michigan University. It’s obvious that the falloff in admissions wouldn’t be restricted to CMU or Michigan, however. Reports of similar situations will trickle out over the next few months. One such report surfaced this past weekend.
In this report by the TribLive News, we learn that faculty and staff at six of the 14 universities within the Pennsylvania State System of Higher Education (PASSHE) have been warned of possible layoffs, which means, of course, that enrollment erosion at those universities has continued if not accelerated.
PASSHE’s problems can be traced to two separate yet related conditions. First, as mentioned in this earlier post on demographic shifts that are and will continue to affect colleges in very substantial ways, Pennsylvania has been and will be graduating far fewer high school students than at its peak enrollment period. So no matter what Pennsylvania colleges do, they will have fewer applicants.
The second condition is of their own making. Despite the well-known upcoming demographic shifts, many of these state universities have been on a building binge. Indeed, PASSHE’s debt has grown considerably since the turn of the century to fund this expansion. There is another story to be told about the reasons for some of these capital investments. We can only hope one of the Pennsylvania investigative reporters (if there are any left) will pick it up and run with it.
In any event, what Pennsylvania has is a higher ed system that has excess capacity and too little regard for costs. For quite some time it’s been clear that, if politics weren’t the deciding factor, Pennsylvania should trim its higher ed portfolio by merging at least three of its universities and then closing (or dramatically curtailing) the campuses of the merged institutions. I’ve had three candidates in mind and, not surprisingly, each received one of the layoff notices from the state. By the way, according to TribLive, the six universities receiving such notices were Clarion, California, Cheney, East Stroudsburg, Edinboro and Mansfield.
Absent consolidation and restructuring, state funds will continue to be spread over 14 institutions instead of the 11 or fewer that are reasonably necessary to serve the state, which also means that funds will be used to support administrative and facility expenses that could be going for instruction or to reduce tuition (or at least slow the pace of increases). Stated differently, if Pennsylvania refuses to adjust, the students attending state universities in the Commonwealth will pay more than is necessary (which also means higher student debt).
So what does all this mean for the student?
Unfortunately, the same dynamic at work in the private nonprofit sector doesn’t carry over to the public sector. To begin with, you will not find the same flexibility in negotiating prices at public universities as you will at the privates. Indeed, admissions personnel at many public universities don’t have the authority to negotiate prices. Especially for in-state applicants, the tuition is what it is.
The other troubling dynamic for Pennsylvania college students, as well as those in other states with similar demographic shifts, is that appropriations from the state legislature have been flat or falling. So more of the cost of running the institutions is shifting to the undergraduate students. When you combine this with a cost infrastructure that is bloated, it’s not good news for students and their families.
Of course, this is good news for the private nonprofit institutions. As prices at the public universities continue to climb, these private colleges, which can be more nimble in responding to changing economic forces, become more price competitive.
The other bad news for students at some of these state universities that are struggling from an enrollment and financial standpoint is that quality is bound to suffer. And with erosion of quality comes further erosion in reputation and brand, which, of course, will adversely impact the economic value of the degrees they grant.
Pennsylvania would do well to reassess its higher education assets and strategy; however, I wouldn’t hold my breath. Politics and not reason usually dictate state action (or inaction) in such matters.
Of course, this isn’t just a story about Pennsylvania. The same situation is unfolding in other states, particularly those with declining populations of high school students.
In the meantime, when choosing your college be sure to shop around and give preference to those institutions that are weathering the storm the best and that have the best prospect for being one of the winners in this shakeout of higher ed. And avoid those institutions that are in decline.
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