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National CrossTalk Summer 2002
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Hard Times for Illinois
Slow economy leads to budget cuts and tuition hikes

By Pamela Burdman
Springfield, Illinois

Illinois colleges and universities took an unexpected battering in this year's state budget, even as the slow economy sent more students back to school and brought forecasts of more hard times ahead.

Overall a statewide budget shortfall of $1.6 billion resulted in a $147 million, or 5.5 percent, slice from higher education. It was the first cut for higher education since the early 1990s, and the first substantial one ever for the Monetary Award Program (MAP), the state's historically well-funded need-based financial aid program.

"Higher education was hit very hard," said Larry Matejka, director of the Illinois Student Assistance Commission, which administers MAP. "They had a big hole and they were looking for bodies to throw in the hole. I don't think they realized how big of an impact this was going to have."

To insiders, the bleak statewide budget situation exposed tensions between lawmakers and the state's universities, between the state's public and private institutions, and even between prestigious research institutions and those more focused on undergraduate education. But on the surface, the effects were most visible in rising tuitions, decreased financial aid, salary freezes, layoffs, and cuts to various programs at the state's 12 public university campuses, 48 community colleges, and the 50-some private institutions whose students rely on MAP support.

The first sign of trouble ahead was a mid-year rescission announced in late November 2001, when public agencies-including universities and community colleges-were ordered to return one percent of their budgets. In addition, the institutions were asked to pay a total of $45 million in health insurance costs that traditionally had been picked up by the state. Then, last May there began what a former policymaker called higher education's "two most tumultuous weeks in the decade." As they scrambled to find reductions in order to submit a balanced budget, lawmakers in Springfield ended up turning to higher education.

Looking for a silver lining, many higher education leaders point out that their current misfortunes come on the heels of-and perhaps even as a result of-a run of good years, with $100 to $150 million annual increases. "One of the reasons we were out on the brink is that higher education had been very well funded," said Keith Sanders, who stepped down earlier this year as executive director of the Illinois Board of Higher Education (IBHE). "Our base was growing at a rate faster than inflation."

Still, higher education leaders warned that another year like this one could be catastrophic for the state's universities and for Illinois students. "We're able to weather the storm for this year," said Elnora Daniel, president of Chicago State University. "I hope this will be one year and that the economy will not continue on this downward spiral. The academy is really aging. This could become a real problem for us."

Among the effects:
  • The Monetary Award Program was slashed ten percent from $371 million in 2001-02 to $333 million this year-dropping from the nation's second-largest need-based aid program to the number four spot (behind California, New York and Pennsylvania). Among those losing financial aid were an estimated 7,000 students who were counting on receiving a fifth-year grant to complete their degrees.

    In all, the Illinois Student Aid Commission said that some 128,000 students received MAP grants-below last year's figure of 140,000 students and far less than the estimated 154,000 students who would have been eligible for assistance had the money been available. Students still receiving grants saw their awards cut by five percent, reducing the maximum award from $4,968 to $4,720.

  • Students at every public university in the state-and at some private institutions-faced significant tuition hikes. Tuition and fees at public schools went up by an average of 10.7 percent, reaching a high of $6,498 (an 8.8 percent increase) at the Urbana-Champaign campus, a more modest $3,778 (a 7.8 percent increase) at Chicago State University. The biggest increase-14.6 percent-was at Southern Illinois University's Carbondale campus. Tuition went up an average of 5.7 percent at community colleges and 4.7 percent at private four-year institutions.

  • Institutions had to trim expenses by laying off staff and faculty and by freezing salaries. At the University of Illinois, for example, which faced a shortfall of $89 million, 900 jobs were cut on three campuses-including 175 faculty positions-mainly through attrition. There were no faculty or staff salary increases at any of the public institutions, raising concerns (especially at the U of I, which is still recovering from the elimination of faculty positions in earlier recessions) about losing faculty to other prestigious institutions that offer better pay. It was the first flat salary year since the early 1990s.

  • Campuses faced hard choices about where to absorb the pain. Because of layoffs of adjunct faculty, many campuses offered fewer sections of courses, and class sizes grew. Other effects varied, ranging from longer lines at shuttle busses at the University of Illinois at Chicago, to the elimination of printed class schedules in favor of digital versions at Carbondale, to reduced budgets for travel and equipment at Chicago State.
  • Even as university officials were struggling to manage the reductions, pessimistic predictions of a budget hole as large as $2 billion next year were coming out of the governor's office in Springfield. And if the budget picture were not creating enough uncertainty, two contenders were vying to replace Republican George Ryan as governor, and more than half of the state's 177 legislative seats are due to turn over in this fall's election.

    At the same time, enrollment increases are straining resources at many of the institutions: Enrollment surged as much as five percent at community colleges and at the University of Illinois' Chicago campus.

    As they cope with the short-range requirements of the budget cuts, higher education leaders are also concerned about the longer-term implications for educational quality, access and affordability, and the ability to retain top faculty. Despite the impression that higher education has fared well until this year, officials at the Illinois Board of Higher Education point out that when the budget figures are adjusted for inflation, state funding for public universities has still fallen $171 million, or nearly 11 percent, since 1990.

    State Senator Steve Rauschenberger (R-Elgin), a perennial critic of higher education, offered one explanation: "Campus funding in the state of Illinois is a regional phenomenon. Unlike public schools... which have a universal effect politically, higher education doesn't enjoy the same kind of universal connectivity to the legislators' districts. That coupled with a frustration by legislators in Illinois with the inflating costs of higher education and the turgid pace of productivity make higher education more suspect."

    Comments such as Rauschenberger's are convincing leaders of higher education that one of their greatest challenges in the coming year will be seeking better ways of communicating with Springfield and with the public about the importance of supporting higher education.

    Daniel LaVista, the man who took over for Sanders at the helm of IBHE, will be leading that effort. "We have this ritual," he said. "We go, we extend our hand and ask for financial support. The outcome is that we are seen as a cost center. It's important for the state to support education at whatever that threshold is where quality can be developed and maintained. The university then can feature that quality as it seeks other resources. I hope that the growing view in the university president community is that it's essential to focus on higher education as a unit."

    An area where unity may have suffered was in defending the MAP program, one of several priorities for public university leaders, but critically important for private schools. "Everybody sort of wanted to hang onto their piece, and in the end the biggest hit comes to students," said state Representative Judy Erwin, a Chicago Democrat who is completing a term as leader of the higher education committee.

    No one in higher education welcomed the loss of fifth-year funding-with some predicting it will be restored next year, especially if Democrats come into power. "The thing that made it so devastating for us is the fact that the institutions found themselves in a position of having to raise tuition multiple times higher than inflation," said Matejka. "A student aid program like ours runs inversely with the economy."

    Hazel Loucks, the education deputy to Governor Ryan, and a Democrat, said, "No matter how much we tried to talk and say this is what reality is, their own reality ruled. Because [the cut in MAP funding] came out of nowhere, there wasn't any time for organized opposition."

    Funding for five years of financial aid began in 1974, and today only about 26 percent of Illinois' college students finish their degrees in four years.

    Matejka, Loucks and others point out that there are many reasons students take more than four years to graduate. For example, those who take 12 hours a semester are considered full-time, but at that rate, they cannot complete a program in four years. Some majors-such as engineering and teacher training-typically require more than four years.

    With 7,000 fifth-year students finding out shortly before school began that their funding was gone, even Rauschenberger, speaking on the Senate floor, called the MAP cuts the "reductions I am most reluctant to support."

    Still, he is suspicious about the five-year trend. "Historically what's happening is not a couple of very, very complex programs that require more than four years," he said. "It is counseling students to take nine to 12 credit hours, permitting students to drop classes, telling them and their parents to plan on a five-year graduation plan.

    "It's a revenue question and they should be embarrassed by that. The way they solve the baby trough is by slowing graduation rates. What Medicare would call fraud, the higher education establishment calls a learning environment."

    Besides the conflict over the fifth year, the battle over MAP also laid bare underlying tensions among the state's institutions, with private schools the object of resentment because MAP awards go to students, not institutions.

    In early budget discussions, in fact, legislators laid out a scenario in which private institutions would be eliminated from the program. Legislators claimed the scenario was never an actual proposal, but it was taken seriously by The Illinois Federation of Independent Colleges, which has been a strong supporter of MAP since it began in the late 1950s with a goal of promoting "choice," or allowing low-income students to attend private schools.

    "We made the case that the private colleges are the best bargain that the state has," said Federation President Don Fouts, noting that the state spends an average of $2,000 in financial aid for each student at a private institution, compared with the $10,000 it costs the state to subsidize each public university student.

    As the program grew from $586,000 in 1958 to its high of $371 million last year, contentious debates have arisen over the twin goals of choice and access. Because of rising tuitions and other costs, public institutions have received an increasing portion of MAP funding. Whereas 77 percent of MAP money went to private institutions in 1969, that number had dropped to 58 percent by 1989-90, and, after community college students started needing MAP money in the 1990s, the private portion dropped even further-to 45 percent by last year, 50 percent when proprietary institutions are included. But that 50 percent serves only about one-third of MAP recipients-one source of the resentment.

    Though they never lobbied against the MAP awards, public university administrators concede that, when their own budgets were bleeding, they weren't focused on saving MAP. "It's better for us to have the money come directly to us, simply because the privates share in those dollars that go to ISAC (Illinois Student Assistance Commission)," said Chet Gardner, U of I's vice president of academic affairs. "But we were concerned about the cuts to ISAC. Those cuts were passed on to us."

    Indeed, one of the hardest hit campuses in the state was the University of Illinois at Chicago, which is using campus funds to compensate about 800 fifth-year students who lost their grants. "That was a huge bite," said Chancellor Sylvia Manning. "We didn't allow for that. But I frankly could not imagine that we had any other choice. It's a very short-sighted thing for the state to do."

    Manning and others are concerned that the combination of rising tuition and declining financial aid could, if the trend persists, jeopardize Illinois' strong record on college affordability. "We have some students who have no resources to attend college," said Joe Cipfl, President and CEO of Illinois' community college system, where the mean age is 31 and 90 percent of students work.

    "We have an ethical and moral responsibility to make higher education access a fundamental component of life in Illinois," Cipfl said. "As they run out of MAP money, this is going to affect community college students. Many individuals can't determine weeks or months in advance that they can attend college. They're often the individuals with the greatest need."

    Illinois families are already borrowing at high levels to attend college-Illinois ranks in the top five states nationally in student indebtedness. With this in mind, the IBHE at its August meeting decided to team up with ISAC in establishing a committee on affordability to study the question and recommend a response.

    State Representative Erwin knows the dilemma well. "If money is limited, what do you do? Stretch it out to help more people?" she asked. "My suggestion was that we lower the maximum award and also look at [reducing] other areas, like merit scholarships. In the scheme of priorities, it's far more important to provide access to low-income students."

    With leaders of most of the state universities predicting more pressure to raise tuition, and with Democratic candidate for governor Rod Blagojevich floating the idea of a tuition freeze, the question is not going away.

    Walter Wendler, chancellor of Southern Illinois University, Carbondale, which posted the highest tuition hike this year, said low tuition has actually been the school's weak point, and that it is now beginning to reach the right level. After the current year's 18 percent climb, the Carbondale campus is planning for increases of 16 percent, eight percent, and six percent in the following years.

    At the U of I, student leaders have mounted surprisingly little resistance to the higher rates. In a student government office at the Urbana campus, three student leaders explained why. Felipe Anthony Hillard, a UI Chicago faculty-student senate leader who served on the campus' tuition policy advisory committee, explained: "We said, we understand this is going to happen, so we might as well make sure financial aid is covered, students are not being gouged too much, and students are being informed."

    The tuition policy committee worked with administrators to make sure that the increase would be used to benefit students-through computer labs, career services, financial aid and other resources. Hillard's fellow junior, accounting major Andrew Erskine, who chairs the governmental affairs wing of the student body, added, "Students are really concerned about the value of their degree."

    Student body president Sara Bokhari had a similar take: "Our campus generally supports the tuition increase for higher education to keep the faculty we have. When students are asked, it's often, 'Would you rather pay less or have less faculty?'"

    It is noteworthy that each of the three students is in a different position financially: Hillard receives full financial aid; Bokhari is fully supported by her parents, who have been saving for her college education ever since immigrating from Pakistan; and Erskine, whose parents have sent six kids to Illinois colleges, receives only $250 in aid, paying for the rest of his education with a combination of loans, help from his parents, and a 30-hour-a-week job waiting tables at a local restaurant.

    But unlike the U of I, most institutions don't have the resources to make up for the MAP cuts, and had to plan their tuition hikes accordingly. "Eighty percent of our student population is on financial aid," said Chicago State President Elnora Daniel. "We didn't want to price ourselves out of the market."

    Blagojevich's campaign rhetoric has played well to an existing climate of suspicion surrounding high tuition. Newspapers have been critical of the increases. And many legislators, including Rauschenberger, think the universities should find a way to live with less, not simply raise the portion of the budget pie that comes from tuition.

    "Many of us are concerned that the MAP program is an excuse to raise tuition," said Rauschenberger. "We've been exceptionally generous and supportive of our MAP program. We took a one-year vacation because of extraordinary budget times, and the response we got form the universities was to raise their tuition."

    Even Gerald Shea, chairman of the University of Illinois Board of Trustees and a close friend of Governor Ryan, had taken university administrators to task about using student tuition money as financial aid for other students.

    Some professors are also suspicious of the "tuition discounting" practice, said Tom Conry, an engineering professor and chair of the University Senates Conference. They look at the "MAP gap"-the tuition money used to compensate students whose financial aid was decreased- and see money that could have supported a faculty salary increase.

    Faculty also suspect that the MAP money going to the privates is contributing to the pay differential between U of I faculty and their colleagues at Northwestern and the University of Chicago, said Conry. Early in the year a statewide faculty group issued a statement which said public dollars should not be going to private institutions when the public schools were being asked to return funds to the state.

    "We're going to start a discussion on tuition policy," said Conry. "That's an issue of public policy, but so are faculty salaries. Do we want our flagship public universities to be the poor step-siblings of the privates? Your faculty are going to think they're not well-compensated. If they're good, they're going to be lured away."

    University of Illinois system President James Stukel says he shares Conry's concern, noting that a five percent salary differential between Northwestern and Urbana in 1985 has widened to nearly 18 percent today. While Stukel is gambling that faculty will not desert over a one-year budget problem, he has committed to a salary increase in 2004, even if it means layoffs-and, unless the budget picture improves, it almost certainly will.

    One university official who knows the importance of faculty salaries well is Stanley Fish, dean of UIC's College of Liberal Arts and Sciences. Fish, known for his radical views and outrageous statements, has been recruiting star faculty from prestigious institutions as part of UIC's bootstrap campaign to shed obscurity and gain a national reputation as a research institution rivaling its sister campus in Urbana-Champaign.

    In its actual performance, the campus is far ahead of its reputation-for example, UIC ranks 52nd in the country in federal research funding. But this year the college has cancelled most of its faculty searches, and Fish is blunt in predicting the outcome of the salary freezes.

    "Eighteen months tops, everybody's gone," said Fish, including himself in the prediction. "The accomplishments you've already achieved will fade away like butter in the sun. In the university world, if you pause for a while, and two or three years later, you say we can start again, you're farther back than you were when the whole enterprise began."

    That outcome does not trouble Rauschenberger, however. "If the University of Illinois continues to get hiring money for Stanley Fish, it comes at the expense of the rest of the system," he said. "I think it would be good for the University of Illinois if Stanley Fish took his wisdom to another venue."

    That division reveals a balance the state will have to strike-between supporting nationally ranked research institutions and funding less expensive undergraduate education.

    "The state of Illinois has to face the question it has never faced: What kind of university do you want? What kind of institution do you want UIC to be?" said Fish. "One of my colleagues said what they want is a community college on steroids. If that's what the state wants...then what have you been doing for the last ten years?"

    In many ways, the same question applies to the state as a whole. Manning and Stukel share Fish's concern that lawmakers and the public don't adequately understand the role of research institutions in the state's economy, and they cite numerous examples of the contributions (including the $570 million in federal research money that comes to the U of I, and Netscape Navigator, which was based on software developed at the Urbana campus).

    But if next year's budget is as lean as predicted, legislators will need to set priorities. "There are those who view the research effort as esoteric," said Stukel. "One can't just dismiss the research as being unimportant. It's an enormous return on investment."

    How Springfield hears that message may affect the future of UIC. Stukel is determined that the cuts won't force UIC to make a 180-degree turn in its ambitions. "In some ways it's the best of times," he said. "In times of largesse, you can be sloppy. This focuses your attention on your priorities. That will be very important as the economy turns around."

    Manning maintains that because of the size of the state of Illinois and the demographics of the Chicago area, it is essential that UIC play a role like UCLA in California. "Not only can the state accommodate it, but it needs to accommodate it," she said.

    At the same time, said Stanley Ikenberry, a 25-year veteran of Illinois higher education and former president of the U of I system, no university will be able to go it alone: "This university and all of higher education, public and private, need to coalesce around a single mission of presenting a united front and making its case in a positive and much more aggressive way to policymakers and the public at large."

    Pamela Burdman is a freelance writer in San Francisco, and a visiting scholar at the Mills College Women's Leadership Institute.

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