Universities face budget shortfalls

One cause of the deficits is tuition caps.

By Will Guldin

Published Feb. 23, 2009

Large deficits in state budgets are leaving many college students around the country unsure of the price of an education.

Like many states, California had to cut funding in order to balance its budget, which was facing a deficit of more than $40 billion. The state cut $800 million from higher education funding, and students will likely see a 9 percent tuition hike.

By comparison, Missouri is facing a budget shortfall of about $300 million. Presidents of Missouri's colleges and universities have pledged not to raise tuition next year if funding rates do not decline in the next fiscal year.

Dionne Jirachaikitti, Associated Students of the University of California Extended Affairs vice president, said she realizes the need for stimulus money for California because tuition has risen steadily in the state.

"The budget cuts are very bad in California," Jirachaikitti said. "I think that's going to have a big impact on education."

Jirachaikitti said she hopes the stimulus bill signed into law last Tuesday will help California solve some of its budgetary problems.

"I think it's necessary," Jirachaikitti said about the stimulus package. "We need the money, and knowing that students have bore the brunt of California's budget problems for the past decade or so since people did not want to raise taxes, it is now time for us to get something back."

California is not the only state suffering from budget shortfalls. The Center on Budget and Policy Priorities said 46 out of 50 states are experiencing "fiscal stress" in their budgets for 2009.

Rutgers University Student Assembly President Christopher Keating said the state deficit in New Jersey, which is projected to be more than $3 billion, is more of a problem for Rutgers since they lack the large endowment of some state schools.

Keating said even though tuition prices are going to increase next year, a tuition cap is placed to ensure that the price of admission is not too high.

"It really is a double-edged sword," Keating said. "They put the caps on tuition so students can still afford to attend the university, but by limiting the amount of money the university can bring in from tuition, it forces them to make cuts in other areas. It really puts the university in a tough situation."

Keating said money from the stimulus will help fund research at Rutgers, but he said one of the most important parts of the package are the tax credits many student will receive. Keating said these rebates would help offset the tuition increases.

Illinois is also going through tough budget problems. State leaders have projected an $8.95 billion deficit in fiscal year 2010.

University of Illinois student body President Jaclyn O'Day said the university is having a hard time coping with the economic downturn because tuition rates are fixed for incoming freshmen.

This means incoming students pay the same price of tuition for the whole time they are enrolled.

O'Day said this policy benefits students but ultimately hurts the university since they must decide how much tuition is necessary for four years instead of one.

"It's getting increasingly harder for our university to keep tuition from rising, but we can't price ourselves too far away from competitors," O'Day said.