U.S. university/college financing ‘stabilizing’

December 4, 2015 Tony Bates

Image: © Moody, 2015

Image: © Moody, 2015

Unauthored (2015) Stability and Modest Growth Expected for U.S. Colleges, Inside Higher Ed, December 3

Lederman, D. (2015) ‘Stabilizing’ Financial Picture, Inside Higher Education, July 8

These two reports are for the record (i.e. to help me find the data when I need it for other articles). Nevertheless, they are still interesting.

These are reports of analyses by Moody on the financial status of universities and colleges in the USA. Lederman’s article is about a report released on the financial status of universities and colleges in 2014, and the more recent article is a projection over the next year to 18 months into 2016.

These reports are important, because for the first time since the great U.S. recession in 2008, there is actually overall growth in revenues, especially from state funding, even though tuition revenue is actually declining slightly overall. Nevertheless, the proportion of funding from the state is still considerably less than in 2004, and the situation is not even, with the less prestigious local/state universities still more likely to be in financial trouble than the larger, more prestigious land-grant and private universities.

‘Stabilization’ does not mean that the pressure to reduce the costs of higher education will ease, especially with regard to tuition fees, but it may mean that we will see less media hype about MOOCs and other technology innovations disrupting higher education. Getting costs under control while revenues stabilize will still remain essential, and the more local, less-selective institutions are particularly vulnerable, which is likely to lead to even less equity in the system: to those that have shall it be given.

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