Lauren Victoria Burke/AP
Sen. Susan Collins, R-Maine, right, accompanied by Sen. Ben Nelson, D-Neb., left, speaks with
reporters on Capitol Hill in Washington, Thursday, Feb. 5, 2009.

Already Hurting, Public Universities Worry About Getting Cut From Obama Stimulus

February 09, 2009 03:02 PM
by Christopher Coats
As state funding and endowments disappear, public universities see hope in the pending stimulus bill, but worry that a final version could leave them without the money to keep them afloat.

Will Funding Education Stimulate Jobs?

Although the proposed bill passed by the House of Representatives includes large amounts of investment in higher education, including increased caps on Pell Grants and funding reserved for university development projects, Senate protests have seen most efforts cut.

Democratic Sen. Ben Nelson and Republican Sen. Susan Collins have reportedly led a bipartisan coalition to propose cuts that include education funding, which they believe would not immediately lead to job creation.

Of the $100 billion cut from the House version of the bill by the Senate, almost $35 billion had been reserved for education efforts, including the rise in Pell caps.

With a final version of the bill still in the works, education advocates have made it clear that they do not intend to allow cuts without a fight.

The 3.2 million-member National Education Association, among other education advocacy groups, has begun to pressure legislators, saying that a decrease in funding could mean a loss of future support, according to Politico.

Context: A struggling education class

With states like South Carolina and Arizona facing drastic cuts in state funding for public higher education, some have begun to explore funding alternatives to help pay for mounting logistical and administrative costs.

Last year, South Carolina saw some of the country’s most drastic cuts, with funding for state institutions dropping from around 40 to 45 percent to anywhere from 11 to 13 percent, leading some to explore collaborative efforts.

Meanwhile, universities across the country have witnessed their endowments disappear as investment banks and funds have collapsed under the stress of the credit and banking crisis.

Statistically, economic downturns tend to lead to an increase in interest in higher education, especially graduate school, though higher enrollment numbers do not always equate to more funding for the schools themselves.

Amid calls for greater investment in education, many schools had come to believe the plan might help offset the cuts in state funding and investment losses.

Referring to the Jan. 28 version of the stimulus bill, previous to the Collins-Nelson cuts, South Carolina State University President George Cooper said, “If [the bill passes], this will have a major impact on our university and our state—It’s a win-win situation.”

Reflecting the broader impact of increased education funding, The Wall Street Journal reported that after the House version of the stimulus bill was announced, stocks of companies involved in higher education efforts closed at record highs.

It is not yet clear how the Collins-Nelson proposed cuts could negatively affect those same stocks.

Opinion & Analysis: “Jobs, jobs, jobs”

The University of California at Berkeley’s John Aubrey Douglass argued in December that any efforts to financially stimulate the U.S. economy should include large investments for education, arguing that a vital component of assuring economic success is to make the country’s workforce more competitive.

Defending his version of the stimulus bill, Sen. Nelson wrote, “Many of these proposals will work well in a budget or in another bill. We just didn’t think they deserved to be in this particular bill, which was about jobs, jobs, jobs—If we ask taxpayers to support it, they deserve to get the most bang for their buck.”

Related Topic: Effects on elementary education

The expectation for increased investment was hardly relegated to higher education, with many K-12 schools expecting funds for everything from special education programs to covering the costs of new facilities.

However, according to Education Week, the cuts in the Senate version of the stimulus plan include “$24.8 billion to be cut from the $79 billion State Stabilization Fund, $6.75 billion out of the more than $13 billion for special education, $6.5 billion from Title I out of $13 billion, and $50 million from the proposed $100 million Teacher Quality Enhancement grant program.”

Most Recent Beyond The Headlines