September brings the final days of summer and with it the early days of the fall semester. The excitement of attending college is at its peak: Students are glad to see friends, the weather is great, and the work hasn’t started. Not so much for college administrators, who are laboring to keep the roll-out going while dealing with increasing financial pressures.
And there are now new pressures from Washington.
New York colleges and universities have long been dealing with financial stresses that originated from state public policies. For decades, New York offered the neediest public college students assistance that covered full tuition through the Tuition Assistance Program (TAP) at the State University of New York and the City University of New York. While the relationship between the two – SUNY tuition and the maximum TAP award – was unwritten, the promise was there for decades. However, that promise was broken in 2011. In that year, a new state law froze TAP awards and allowed for annual increases in public college tuition. Not surprisingly, raising public college tuition while keeping TAP awards unchanged strained institutional budgets, reducing tuition assistance revenue and deepening financial challenges as colleges struggled to cover the state’s shortfall.
Independent colleges were hit, too. Students attending those institutions also are eligible for TAP. Since TAP awards were frozen, those campuses also had to figure out ways to cover the financial assistance that would normally have come from the state’s TAP.
Adding to that financial hit, New York State was cutting back its direct support of colleges in the independent sector as well.
Aid to certain non-public colleges and universities, popularly known as Bundy Aid, is a program that provides direct unrestricted financial support to independent postsecondary institutions located in New York State. Once a vital component of independent colleges’ finances, the program has been decimated by cuts over the past four decades. The peak state support occurred during the 1989-90 fiscal year, when nearly $114 million was appropriated. During the current fiscal year, that amount has been reduced to around $20 million. If New York had merely kept pace with inflation, the amount of Bundy Aid would be around $260 million – not $20 million.
Now the Trump Administration has added new financial pressures that may push some colleges over the fiscal cliff.
The Trump Administration’s crackdown on immigrants and international students threaten another important funding stream for colleges. International students typically receive little to no financial aid when attending U.S. colleges. Thus, by paying nearly the “full freight” of attending college, they provide an important revenue stream. And one not easily filled.
Large institutions in New York could suffer. For example, New York University has nearly 25,000 international students; Columbia nearly 23,000; Cornell over 10,000; and Syracuse University has over 6,000.
While the media coverage has focused on the larger universities that have been targeted by the Trump Administration, those institutions have large endowments to help stabilize themselves financially.
Smaller colleges simply do not. International students represent at least 20% of enrollment at more than 100 colleges with endowments of less than $250,000 per student.
Of course, the impact is not only on colleges in the private sector; public institutions also face financial threats. For example, in the State University of New York, of its more than “370,000 total students, nearly 18,000 are international students from 180 nations around the globe.” At some SUNY colleges the percentage of international students is particularly large: The University at Buffalo has nearly 9,000 international students and Stony Brook University has over 5,000, for example.
This is particularly worrisome as college closures have been increasing over recent years in New York (to some extent the result of the state’s policy of cutting public assistance). In light of this trend, the new restrictions on international students will only make things worse.
New York needs a vibrant higher education system. Colleges not only educate the civic leaders of the future, but they are also dynamic “economic engines.” These economic engines create jobs that stimulate and anchor local economies. They offer a stimulus to local economies that are virtually guaranteed to succeed. For example, SUNY’s economic impact in New York State is $28.6 billion. For every $1 invested in SUNY, New York State’s economy benefits the equivalent of $8.17 and is responsible for nearly 2% of the gross state product.
The economic benefits are generated by independent colleges, as well. In fiscal year 2022-23 independent colleges and universities in New York State contributed an estimated $97 billion to the state’s economy and supported more than 407,000 jobs.
An important challenge confronting Governor Hochul as she develops her budget plan for the upcoming year is how to stabilize New York’s colleges and universities. Not only is addressing that challenge important to the state’s future workforce and civic leaders, but it is also critical to the state’s economy and jobs now. How the governor tackles that challenge we will soon see.