CSUN University News Clippings

Campuses Largely Unhurt by Recession, but Officials Are Fearful About the Future

(October 27, 2009)

By Jack Kadden
Published: 10/26/09

The economy may be on the mend, but the chief finance officers of colleges are far from upbeat about the near future, according to a survey conducted by The Chronicle of Higher Education.

The survey found that 62 percent of the officers think the financial pressures on their colleges will get worse, and almost two thirds fear that 2010-2012 will be even more difficult.

Still, the article points out, few colleges have significantly changed the way they operate.

The absence of radical change is probably a measure of the resiliency of the higher-education sector, the cushion provided by federal stimulus funds, and the political difficulty of instituting swift changes at such complex and decentralized organizations.

The survey found that only 6 percent of colleges had imposed unpaid furloughs on staff, but 40 percent of the 166 respondents had frozen hiring for faculty and adjunct positions, and 60 percent had frozen hiring for non-faculty jobs.

From the perspective of colleges’ fiscal health, the survey was encouraging.

While the number of “downgrades” to credit ratings in the first three quarters of 2009 was more than twice as high as for all of 2008 (26 versus 12) and the number of negative outlooks so far in 2009 also outpaced the number for all of 2008 (40 versus 20), the credit ratings for the vast majority of colleges remain unchanged.

“It’s important to remember that this is an industry that has been in a golden era for a decade or more,” says John C. Nelson, managing director for the Moody’s group that evaluates colleges’ creditworthiness. “It shows how just fundamentally stable the business model of the university is. They can absorb a lot.”

Enrollment at both public and private institutions was stable, the article said, but public universities suffered a 3 percent drop in state aid, which would have been 4 percent if not for federal stimulus money.

Publication: The New York Times