As New Yorkers rang in the New Year, Albany’s budgeteers were developing a fiscal proposal for Governor Hochul. As directed by the state Constitution, the governor must unveil her budget plan within a few weeks and with it her policy priorities for the upcoming legislative session.
“Affordability” will be the buzzword of the session and the big-ticket items, like spending on health care and education, will dominate the budget debate. The impact of the federal budget put together by President Trump and the Republican-majority Congress will also impact budget decisions.
For example, how does the federal budget impact higher education? A recent opinion piece jointly authored by New York State Comptroller DiNapoli and the head of the Commission on Independent Colleges and Universities (CICU) highlighted key issues.
In their commentary, they wrote that the “One Big Beautiful Bill Act” represented the most significant overhaul of federal student lending in decades. They opined that “the new law sharply restricts access to higher education based on wealth.”
They concluded, “The consequences go far beyond college campuses. When students can’t afford to attend college, entire communities feel the loss” and “The financial effects will be immediate: reductions in student and visitor spending, lower revenues for local businesses, and thousands of campus and spillover jobs lost.”
They were quite right to look at the economic losses from a weakened higher education system, beyond the obvious impacts on college students themselves. They are also correct that the Trump Administration and its allies in Congress have enacted measures that will harm colleges and universities in New York and the communities where they are located.
Yet federal harms are just the latest hits to higher education. Over the past decades, state policies have undermined both public and private institutions. The biggest impacts have been on private colleges.
For example, state policymakers have hammered public support for private colleges found in the Unrestricted Aid to Independent Colleges and Universities (known as “Bundy Aid”). Bundy Aid directs financial support to independent colleges. The program was established in 1968 with the goal of providing an answer to the question “how the State can help preserve the strength and vitality of our private and independent institutions of higher education and at the same time, keep them free.” In response, the state decided that “the moderate but real level of need calls for direct assistance from New York to private colleges and universities.”
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 under $20 million. If New York had merely kept pace with inflation, the amount of Bundy Aid would be around $260 million – not less than $20 million.
The result? Not surprisingly, many colleges – usually small ones – have seen their finances become damaged or worse. According to New York education officials, over the last 18 years, New York has lost seventeen independent colleges, universities, and other degree-granting institutions. Ten of those seventeen shut their doors in only the last few years, throwing their students into educational uncertainty and potentially, entire communities into economic insecurity. One example was the closure of the College of St. Rose in Albany, N.Y. Another more recent controversy surrounding the financial stability of Siena College in the Albany suburbs.
Those campuses are, unfortunately, not alone when it comes to financial concerns. In a recent review of colleges conducted by Forbes, nineteen of New York’s 72 colleges and universities (26%) scored poor financial grades (C- or D).
Why should we care?
The answer is that colleges not only educate the adult leaders of the future, but they are also dynamic “economic engines.” These economic engines create jobs that stimulate and anchor local economies. Independent colleges and universities in New York State contributed an estimated $97 billion to the state’s economy and supported more than 400,000 jobs. These institutions also provide cultural and educational resources to the larger community, contributing to the quality of life in the area.
New York’s elected leadership hasn’t considered the independent sector of higher education an important component of the budget. But as independent campuses close and others struggle, New York’s decisions are costing jobs and economic activity. Here’s hoping the governor’s upcoming budget reverses this not-so-benign neglect.