South Carolina State University has found itself in dire straits.
The school has asked the state for a $13 million loan so it can pay long overdue bills and make its payroll for the rest of the fiscal year.
Without the loan, the school says it may not be able to pay long overdue bills to vendors, and the financial situation is threatening the university’s accreditation. The state has loaned SCSU $6 million, less than half of what it asked for, and said any additional funds would have to come from a budget appropriation from the state legislature.
While the financial situation as SCSU is extreme, and there were many factors that led it to its current situation, the school's predicament highlights the underfunding of public higher education in the United States, especially at institutions that serve minority students.
In a letter posted on SCSU’s website from university president Thomas Elzey, the school’s administration acknowledges that “much remains to be done” for the university to get its financial affairs in order, but also reassures the campus community that the school will not be closing, at least not now.
A 2012 study from the Ford Foundation found that five Historically Black Colleges have closed their doors in the last two decades, and many Tribal Colleges and Universities are struggling to keep their faculty on staff because of budget cuts to state and federal aid programs that make up the majority of their budgets.
Things have been rough for public higher education across the board, but for HBCUs, Native American Tribal institutions, Hispanic and other minority serving institutions, the cuts are deeper.
Marybeth Gasman, director of the University of Pennsylvania’s Penn Center for Minority Serving Institutions, told Al Jazeera when states slash their budgets for higher education, minority-serving schools have a much harder time rebounding and absorbing the financial hit because they don’t have the large cash reserves like some of the more prominent public or big-name private universities.
“It’s like a family that doesn’t have a savings account,” Gasman said. “It’s a lot easier if you have three months worth of income in your savings account than if you a have nothing.”
“There are some Hispanic-serving institutions, some tribal colleges that definitely have some of these similar issues because they’re underfunded. They don’t have wealthy alumni, and they are enrolling more low-income students of color and we know that it costs more to educate low income students.”
Gasman said the schools that serve students most at need are always at a higher risk of closing, because the public largely doesn’t think about them the same way as other public schools.
“People don’t feel like those communities [of color] are important,” she said. “And I think what people don’t realize is that, as the country is changing, we really need to support our minority-serving institutions, because they know more about serving low-income students of color than almost anybody.”
According to data from the U.S. Census Bureau and the Pew Research Center, the minority population is expected to become the majority by 2050.
Larger public universities often turn to their endowments to cover the financial gap when they’re in a bind, but minority schools rarely have an endowment large enough to offset massive budget cuts, and giving rates are much lower.
Today, many public higher education systems are operating with budgets much lower than before the financial crisis began in 2008. Data from Grapevine, an annual compilation of state funding for public higher education complied by Illinois State University, showed that in the five-year period from 2009- 2014, 35 states saw their higher education-funding cut.
Mississippi and West Virginia had the smallest decrease, at half a percent each over five years. Louisiana and Arizona felt the sharpest cuts, at 34 percent and 33 percent, respectively. Many state systems experienced double digit decreases between 10 and 21 percent.
Until the average 5.7 percent increase for the 2013-2014 fiscal year, budgets for public higher education have largely remained in their diminished state. Having to do more with less, all public universities are left with few options other than to cut their offerings.
“What most institutions go through is a sort of restructuring or realignment where they try to make cuts without harming the students first,” said John Michael Lee, Jr., vice president of the Association of Public and Land-grant Universities.
“Because of the drastic nature of the cuts that have been there for so long, and happening year after year in so many states, it required a lot of universities to completely realign," he said, "cutting out foreign language courses, completely eliminating some programs or majors, having to eliminate entire department staffs as a result of what they’ve had to cut from budgets.”
“It’s detrimental if it goes to a point where universities can't effectively operate or provide the services they need to,” Lee said.
The effects of budget cuts year after year have some administrators and faculty worried about the long-term implications. The big questions is: How much is too much when it comes to trimming the budget?
Lee told Al Jazeera for many public university systems, state contribute on average less than 30 percent to the overall budget.
“Even if they are public universities, their budgets don’t reflect that,” he said. “I don’t think any of us believe we are going to return to the time when budgets are 70, 75 percent funded by the state.”
According to James Palmer, a professor of education at Illinois State and the editor of Grapevine, public universities have increased tuition in an effort to offset the financial loss of reduced state funding, and schools rely more on adjunct faculty members, because they do not receive the same level of benefits as full-time faculty, saving the schools money.
While larger public schools are able to make due with these strategies, the same cannot be said for minority-serving schools and smaller public schools that don’t have the financial base. Students at smaller schools are often the first in their families to attend college, and many come from lower-income households. As a result, they take fewer courses or don’t enroll because they can’t afford to pay the increased tuition.
Even for larger public schools that may have a sizeable financial cushion, there’s only so much that can be trimmed before the schools feel the pinch.
“We’ve seen that over the years, as state funding decreases tuition goes up. But that’s becoming politically untenable,” Palmer said. “You can only go up against the wall so many times.”
That largely leaves the minority-serving schools holding the bag and the students paying the real cost.
“When we say, 'What is the cost?', we have to really think about is which cost?” Lee asked. “Are we talking about the cost to society, the cost to the taxpayer, the cost to the workforce?”
Lee said when public universities raise tuition, and fewer students are able to access education, those students are not ready to enter the workforce and replace the baby boomers who are retiring.
“And when students aren’t able to finish on time or at all, especially black or brown students — who are what the workforce of the future is going to look like — then how do we really say we can meet the needs of tomorrow?”
“That’s the real loss.”