• September 5, 2015

Colleges Get Reprieve as Congress Approves Aid to States

State lawmakers may be able to avoid some painful cuts to their higher-education budgets, thanks to a last-minute reprieve from Congress.

On Tuesday, members of the U.S. House of Representatives took a break from their annual August recess to give final approval to a bill that would provide $16.1-billion in additional Medicaid assistance. While that money will not directly benefit colleges, it will help plug states' budget gaps and avert cuts to other areas, including education. More than half of state legislatures have already approved budgets assuming Congress would come through with the aid.

The House speaker, Rep. Nancy Pelosi, Democrat of California, called members back to Washington for the vote after the U.S. Senate passed the bill last week.

The federal assistance comes as a relief to state college systems, many of which would have suffered substantial cuts if the money had fallen through.

In California, which is expected to receive between $1.2-billion and $1.8-billion under the bill, Gov. Arnold Schwarzenegger said in a speech in June that the money was "critical to preventing deeper pain and deeper job losses" in the state.

"If Congress fails to extend the full amount of Medicaid payments for states, we will have no other choice than to make even more drastic cuts," the Republican governor warned.

On the other side of the country, Maine's public universities were facing an $8.4-million cut if the bill failed, said Rebecca M. Wyke, vice chancellor for finance and administration for the University of Maine system. That would have come on top of an $8-million reduction in state appropriations since the 2008 fiscal year. The system has shed 300 jobs since October 2007, or 6 percent of its work force.

Ms. Wyke said colleges were "relieved we got a break."

"We know it's probably not the end of the troubles we'll have to face, but we're all very thankful Congress has come through with this," she said.

In Pennsylvania, state leaders had warned that they would ask U.S. Secretary of Education Arne Duncan for a waiver from a requirement that states maintain their higher-education budgets to be eligible for federal aid. Now, they're less likely they'll do so, said John C. Cavanaugh, chancellor of the Pennsylvania State System of Higher Education.

Not as Much Help as Expected

Still, most states won't get all the federal help they were counting on. Maine had budgeted for $100-million in Medicaid money but will probably get $77-million. In Pennsylvania, lawmakers were banking on $850-million but are likely to receive closer to $600-million.

California's colleges aren't out of the woods yet, either. While the federal money could help prevent further cuts to higher education, the governor and the State Legislature must still reach agreement on how to restore $610-million that was cut from the budgets of the University of California and California State University systems last year, said Patrick J. Lenz, vice president for budget and capital resources for the UC system.

The governor has proposed cutting other programs, but Democrats in the State Senate and Assembly want to raise taxes and fees instead.

"Will the federal funds be helpful? Absolutely," Mr. Lenz said. "But there's another component to this."

Other state college systems aren't sure when they'll see the emergency aid. In Massachusetts, lawmakers already voted to slash spending on the state's public colleges by 12 percent on the assumption that Congress would not act, and they aren't scheduled to reconvene formally until January. Now, lawmakers and the governor must decide when and how to appropriate the $655-million Massachusetts is expected to receive from Washington.

On Tuesday afternoon, Gov. Deval Patrick told reporters that he'd like to see $75-million of the money go to higher education, according to the State House News Service.


1. dthornton9 - August 11, 2010 at 09:50 am

Yes, unfortunately this passed - another Obama Bailout. The states, and state universities/colleges/community colleges Must learn to live within their budgets. The California situation is outrageous. Workers are leaving the state in droves, and the largest/best paying employer is the government - driven by the government unions. State pensions are.... The money Will come due, and when it does we'll all be in trouble! Taxes are going to rise, by a lot.

2. 11200222 - August 11, 2010 at 10:33 am

dthornton9: spoken like a true person who has a job.

3. tprestby - August 11, 2010 at 11:03 am

"Another Obama Bailout?" Kindly remember Obama didn't start the bailout process, that was a REPUBLICAN invention!

4. bnmoore - August 11, 2010 at 11:08 am

More theft of the American taxpayer. With more than $400 billion still in outstanding TARP sitting unused, why more picking the pockets of Americans for the latest Obama/Pelosi bailouts? This boggles the mind. All these massive debts will have to be paid back... It's not some printing press in a basement creating all the free money this Administration and Congress wants to spend, labeling it all as "stimulus" when in fact most of it is ever more and more entitlements. Taking from Virginia or Texas taxpayers, for example, to pay for NY or California or Ohio in-state stuff that they cannot pay for themselves may be Lincoln-like, but it is far from what the Founders designed the role of the federal government to be.

5. jesor - August 11, 2010 at 11:19 am

Actually, this isn't a bailout, it's the federal government paying the states what it's due for it's share of increased medicare costs due to low employment. Simply put, the feds contracted with the states to provide a certain percentage of the cost and then budgeted that alottment based on what they projected unemployment to be in the future. When the money ran out and unemployment stayed high, the feds had to reallocate the funds, otherwise, the states that acted in good faith by continuing the agreed upon benefits to individuals would end up eating the federal government's share of the cost.
Of course from the perspective of the states, they could have kicked all of those people off of medicaid and then paid twice as much in indigent care at the emergency room in order to avoid the appearance of "socialism" like the economic geniuses in Virgina and Texas did.

6. jesor - August 11, 2010 at 11:19 am

Forgot to mention...the bill that passed pulls money from other existing federal programs, thus not contributing to the federal deficit.

7. 22199179 - August 11, 2010 at 11:25 am

dthornton9 & bnmoore -- do you two actually work at a college or university? Are you faculty or staff? Do you have any clue how these budge cuts have been effecting the services students have been receiving on your campus? Or are you tucked away in your little corner of the campus and only focus on your duties?

On my campus our enrollment has almost doubled due to the high unemployment rate in my state, and our staff has decreased by about 1/3. More students and fewer staff = crap for education. We don't have enought space or instructors or money to add classes to educate all of the students that want to come to school. I am an academic advisor. If my teammate get the promotion she is up for, my college will not be able to fill her position due to the budget cuts. So instead of having two full time general academic advisors for a campus of 6000 there will be one!

My job in higher education is to educate my students, not to wax political. I respect your political opinions even though I do not agree with them, but this is the Chronical of Higher Education. How do your comments related to the EDUCATIONAL situation on your campus?

8. softshellcrab - August 11, 2010 at 11:42 am

#2, I understand your resentment if dthronton has a job and "is in a position to say something like that", if you will. But whether you have a job, or not, the additional bailout is either right, or it is wrong. The real answer is independent of any person's particular circumstance. I have a secure job, my daugher is a recently hired local government worker who is not secure and may be saved from layoff by this (maybe... not sure what would happen otherwise, but I know she was worried).

In my case, I happen to agree with dthornton09. But I respect the opinion of those who think otherwise, and who welcome federal government support of local government jobs. But I just don't agree with them. I also think that it is time to reduce government and government spending, and for governments to learn to live within their means, in fact, to reduce their means and their spending. In my own disipline I am seeing that recently the best jobs are government jobs, with higher pay, easier/less work, total job security even for incompetents. It is overwhelmingly the private sector that creates wealth, and pulls the wagon. Even good, smart hard working public employees are typically not creating more wealth or GDP for our country. We have to get more private sector workes, and less government workes, and to treat the private workers better, vis a vis the government workers. And this admittedly coming from a government employee!

9. 22199179 - August 11, 2010 at 11:59 am

Softshellcrab - are you saying that all 50 states decided to live outside of their means at the exact same time?

Because the majority of states had nice sized rainy day funds until this economic down turn hit...they were living well within their means. Now several states have recovered due to the stimulus plan that the government put in place, but others are still working their way out.

Politics aside...do you see this "bailout" helping your students at all or do you think your student should just suck it up and suffer the budget cuts and not get this potential help?

10. mpressley - August 11, 2010 at 12:04 pm

Prior Posting: "Another Obama Bailout?" Kindly remember Obama didn't start the bailout process, that was a REPUBLICAN invention!"

Spoken by a true liberal devotee. Bush may have started the bailout process (much to the distress of objective students of history and economics). But Obama took it not to the next level, but to about 10 levels higher. In his speech to the auto workers, he said that the stimulus (a.k.a., bailout) had saved or created 55,000 jobs. What he didn't mention was that it cost more than $1 million per job! And that's not counting the $34,000 per car that the cash for clunkers program cost us.

Economic history shows that socialism to the max does not work. Why, oh why, do we sit back and allow it to begin here and sit back and watch it escalate.

Oh, and to the person who said "Spoken like a person who has a job...", I'm not sure whether or not I'll be among the ~30% of those who will likely loose their job at my university. But I am sure that I don't want socialism or marxism. And I am not happy about my grandchildren being put in debt before they start school! (That would be kindergarden -- not a university)

11. mpressley - August 11, 2010 at 12:14 pm

To "Politics aside...do you see this "bailout" helping your students at all or do you think your student should just suck it up and suffer the budget cuts and not get this potential help?"

I see the necessity to strengthen the K-12 system so that its graduates would be able to function properly in today's society. Sadly, most can't write a paragraph, much less a paper or report, properly. Most can't balance a checkbook. Most can't and don't read -- or comprehend well.

If we strengthened the K-12 system, many (most?) employers would not demand a college degree. Can you honestly say a manager of a Walgreens, shoe store in the mall, or AMC theater needs a Bachelor's degree? If we did this, we would need a university education for around 20% or so of the population for society to prosper.

In the EU, student graduate 10th grade not only knowing how to read, write and do math, but with a knowledge of other languages, cultures, and the arts as well. AND, only around 7-15% of their students go on to university. And their students are beating the US students on virtually all tests.

So, I say that many would have to suffer (students, staff and faculty) during a period of transition. But they would succeed as Americans are a tough bunch -- or at least we were until the society of entitlement.

12. 22199179 - August 11, 2010 at 12:31 pm

You know, if all we can think about is the politics of this money, then maybe we all deserve to be "among the ~30% of those who will likely loose their job" at our univerisites or colleges...we need to be the ones without the jobs and medical coverage -- dependent on the "government" to take care of us and experience that day when there is no money for services and see what it's really like to need a helping hand and have one not be there. Maybe it's called socialism or marxism, I call it helping your fellow man.

Between higher ed jobs I worked for employment security in my state after 9/11 when we had the highest unemployment rate in the nation. People like us...well educated, well paid were well and good laid off just like everyone else.

Many of my student have been unemployed for 8 months to 1 1/12 yrs, they have no money, no health coverage, have lost their homes or about to, have had to declare bankruptcy or are about to, are not eligible for pell grants, their industry is in the tank, they don't have money to feed their children...and they just want to get through school and find a good job.

When I am at work, my job is to help them. Our drop-in advising services have gone from an average wait time of 40 minutes to 3 hours due to the increase in enrollment and decrease in staff.

If this money helps me serve my students better...then call me a marxist....I don't give a flying fig! My job is to help educate my students

13. 22199179 - August 11, 2010 at 12:35 pm

mpressley -- I agree with you whole heartedly...K-12 does need to be improved....who is going to pay for it? This bail out keeps how many thousand teachers in the classroom?

We can't have our cake without paying for it.

14. careydp - August 11, 2010 at 01:21 pm

It sure seems like "conservatives" have very short, selective memories: President Bush took office after President Clinton with a budget surplus; two poorly executed, off-the-budget wars later (in essence, unfunded), two unfunded tax cuts later, one unfunded increase in Medicare prescription insurance later, virtually no jobs created during the entire Bush administration, a failure to "properly" regulate Wall Street resulting in the initial bailouts in the fall of 2008--and now you folks find your "conservative" voices again? It'd be laughable if it weren't so tragic. When President Obama took office, President Bush left him an economy that was losing 700,000 jobs per month. The "conservative" voices I see here should be very proud. How vocal were you about fiscal responsibility before January 20th, 2009?

15. 22199179 - August 11, 2010 at 01:32 pm

mpressley -- I keep thinking about something you wrote... "Can you honestly say a manager of a Walgreens, shoe store in the mall, or AMC theater needs a Bachelor's degree?" Yes I do think they should have a Bachelor's degree if they want one, because having additional education is a good thing! If I didn't belive that I wouldn't work in higher ed.

Are you saying they shouldn't? Because one could read your remark to say you think they aren't good enough to go to college. That we should change from a society of entitlement to a society of elitism...with only 7 to 15% of people going to college.

16. bnmoore - August 11, 2010 at 02:10 pm

Bush worked the best he could, while fighting two wars and the clinging economic impact of 9-11, with Pelosi and Reid, who ran the Congress the last two years of his presidency (and still do today, now four years from that time), regarding the finances of the country. I remember Bush trying to get the attention of the Congress regarding Fannie Mae and Freddie Mac, and the impending housing crisis that was there to see for everyone but the entitlements blinded left. Fell on deft ears, especially those of Franks and Dodd who let this thing get so ugly. Obama has doubled down on national debt, actually tripled down in less than two years, and is still spreading money we don't have like warm butter on a biscuit to just about anyone with their hand out. Our nation will bankrupt (the second Great Depression) before Obama is done and moves on in life, or Congress changes leadership and it gets back to not spending more than it takes in. How does this impact higher eduation like some above have asked? If one does not know how to draw the lines between growing enormous unsustainable debt, the scary economics of the country, and the workers who will not have a job, grads included, because we have had too much for too long (actually we expect it), than there is not enough space in these comments to explain. Obamacare will probably finish off the nation's finances once it gets into full operation a few years down the path unless much of it is non-funded by a different Congress.

17. 22199179 - August 11, 2010 at 02:21 pm

Again, I ask does anyone have any comments about the financial situation on their campus and how this aid to the states might impact their campus and their students?

Thank you for your political views, but really now....how do you see this money trickly down and impacting your campus?

On my campus, we might not have to lay anyone else off, we might not have to be on red aleart every second of every day. I don't think the hiring freez will be over, but the stress level might come down a notch

18. softshellcrab - August 11, 2010 at 02:48 pm

@ #9. 22199179

Your first point was a good one. No, not all states find themselves in the same boat. In fact on the way to work today I heard Haley Barbour, Governor of Mississippi, being interviewed about this bailout, and he made exactly that point, that his state had been careful and had not gotten itself into a mess, and was not in dire need of the bailout. (He also, by the way, buttressed my other point, by stating that even in his state statistics showed that government workers were making on average 1/3 more than private sector workers). Your point is a good one.

On your second point, I am not at all sure that there is such a direct relationship between the bailout and the students. You are leaving out the middleman, the schools and their faculty. It certainly will help some faculty, but would the lack of a bailout have necessarily impacted the students? Maybe, but I am not at all sure about that. You do realize I am sure that only a minor part of the money was going to teachers/colleges. The lions share is to other employees like police, fire, other government workers. Also, in most instances at least in the short term they would cover the classes pretty well even with some less faculty. Governor Barbour in fact that the bailout was largely a bailout of the public employee unions who have thrown in so strongly to support the Obama administration. One can agree or disagree about that point, but in general my own view is that the relationship is not as direct as your question suggests.

19. bnmoore - August 11, 2010 at 03:30 pm

Our mid-size private university is sitting fine financially. Actually we are debt free and have a robust building program ongoing that is fully funded as it goes along. Academics are expanding; tuition staying the same. Teachers and administrators have good job security. Students are lining up at the doors to get in. Good planning and decisioning a few years ago ensured a long term successful future, regardless of the nation's economics. The only thing that could impact us would be the collapse, as it would everyone else, of the nation's economy...which is fast going broke and still no end in sight to the free spending today. Our governor, newly elected last winter, has already turned the state's finances around to a surplus. Private higher ed has some challenges, but on the whole is in good shape. It takes fiscal discipline, reality checks, and agility in making decisions, but states [and industry] could become more solvent if they could just get from under enormous entitlement programs, lavish industry and government union pensions, and free spending politicians. Example? The union pensions hard fought to get in the 1970s in the airlines, are now coming home to roost. These pensions are what is driving the airline industry into the ground today and forcing them to fee the general public to death. Do college students also use airlines? Yep.

20. davi2665 - August 11, 2010 at 03:59 pm

Yet another irresponsible step to temporarily bail out the states that continue to wildly spend. Since the states cannot print money, they just get their lackey representatives and senators to get the federal government to print more money. This is not an accidental process- Bush overspent and played into the leftists' hands to try to establish some kind of positive legacy. Obama is a dedicated ideologue whose deliberate deficit spending and money printing are aimed at crashing the dollar, providing a context to destroy the wealth of the "upper class" whom he so loathes, and to spread the wealth. We are headed for a repeat of the Brazilian economy of the 1990s. So where will the next bail out come from, and the next, and the next? As the TARP funds run out, will the states rein in their spending? RIGHT! This is an ongoing saga that is predictable and will have catastrophic consequences. The only leveling of the playing field that will occur and redistribution that will occur will be equalization of poverty and the turning over of America's assets to our foreign creditors.

21. softshellcrab - August 11, 2010 at 05:00 pm

@ bnmoore, davi2665

Nice comments. Refreshing to read. It is kind of like the government pretends there is no such thing as gravity. I had low esteem for government before, now I loathe the federal,state and local governments. Don't people understand that most, not just much, of the money the government spends is wasted or worse than wasted? And how much are we going to take from those who get married before having their kids, work hard, have only the children they can support, pay their bills, and live a crime-free life, in order to give to irresponsible unwed mothers, people who refuse to work, and criminals and illegal aliens who keep saying they want to "reconquista" America? Truly the government has become the enemy. 40-50% of our population today just "takes", just "gets", and pays little or no taxes at all. And they keep voting themselves more of my money.

Re pensions, a friend of mine recently retired from his local school administrator job at age 55, with 30 years in the plan, and was hired back within a week as part of a prearranged plan. Now he gets a full pension equal to over 60% of his salary, and also a working salary equal to maybe 75% of his former pay. He gets a big raise and the school system saves money. All by burdening the pension system. Double dipping. He was making well over six figures,and now is makeing well, well over six figures. This is what makes the public jusifiably angry. It seems people who work for all levels of government are treating it like a big party for themselves.

Public employee unions should never have been permitted. There is no one to fight back!

22. 22199179 - August 11, 2010 at 07:40 pm

Softshellcrab, all I can tell you is that last Wednesday we got an email from our president preping us for yet another budget cut due to the state budget shortfall which would mean layoffs and cuts in services to students...today we got an email that said no lay offs and no cuts to programs. That would be my perspective in relation to my students...and my president has been very very very fiscally conservative and proactive and we have had fewer cuts that other schools in my state.

Just my perspective on the situation and how it relates directly to my students...because I do see a direct relationship.

23. trendisnotdestiny - August 12, 2010 at 09:58 am

@ To All Readers

After reading this thread, it concerns me that too many here attribute the problems of debt in higher education, and the gutting social supports in the country to one person; a figurehead who represents a multiplicity of branded ideologies fused together by monied interests. We are much better than this?

First, a president is not the most powerful force in our country, economy or even in policy matters. We must acknowledge this first. No such thing as Obama bailouts or plans of a socialist takeover unless you consider the corporate socialism of the past two decades.... It is important to identify who has the most power to affect outcomes here. In any analysis, the groups that move this country are uniformally from industry: finance, pharma, media and energy.... In the land of predatory capitalism, who has the money controls the power! These people fund elections, lobby legislators and control politicians of what we call government.

By acknowledging this, it is not a far leapt as to why all our systems are incurring massive debts all at once (state and local budgets, government deficits, personal and familial debt). This is a planned consequence of a consumer driven economy where credit has been cheap, markets have been gutted/de-regulated and control have moved into elite or private hands as a patriotic selling points (9/11). Government has colluded with this process of being bought off, but the governing power in this society is the corporation. Very rarely can you sue it, change it or vote it out.... It replicates itself into our culture: sports teams, college adminstrations, and our consumption of media.... Let's not be naive here, presidents who make $400K are more about branding and salesmanship than actual policy. They are told what to do and say by their corporate financiers and our choices as voters are limited to the flavors (Yale or Harvard) that power provides as they whisper their intentions to the lackey adminsitrations.... As a result, each adminsitration is most concerned about GDP growth. Their policies often reflect it, people be damned....

Second, when we read that people want government intrusion out of thier lives, this plays into the hands of both the corrupt government officials as well as their corporate benefactors. However, for most the corporate influence is less visible in the divide and conquer rhetoric designed to break critically thinking people into camps: spending stimulus versus paying down debt, cutting social supports versus soliciting entrpreneurism or shared governance in higher ed versus a top down approach....

The people who are angry about how profits are privatized and losses are socialized have legitimate concerns, but little access to the inside narratives as to why this happening. So, I will speculate and suggest something rather troubling.

One --- wealth and currency from FR banking systems are created from debt. This is important to understand that those who issue debt have the most power in a global capitalistic system. They influence and control political figures who serve as their defacto shields for anonimity.

Two --- the world's resources are dwindling; there is a massive race for information, access, and ownership of the various depleted resources: water, food, oil, precious metals, minerals etc. When you combine this race to privatization with an unsustainable global population demographic, you could begin to see why bubble economics (neoliberal economics) are needed to clearly bifurcate and distinguish the people who have and have not. These bubbles are an instrument of social darwinism....

Three --- The forces that led to the creation an indebted population are same ones leading the push for eliminating social security, medicare and spending programs for the poor calling them "entitlements". You have to ask the why now question. After a period where there have been massive bankruptcies, home foreclosures and systemic unemployment, why would power want to cut social supports now during one of the worst periods in economic history... The answer is that during times of shock, it is the perfect time for power to inflict changes that would have normally been resisted.

four --- consolidation of power in every industry has been the corporate culmination of this project. This is the most uncovered and unexplored issue out there. Very few of us critically analysze why there are so few companies soliciting product in a free market. Banking there are the top 6 who control the industry. Healthcare there are slightly fewer. Energy companies are even less. Media too.... These companies ability to impact our lives is far greater than one person in the white house, one party, one supreme court nominee....

five ---- SUMMARY
money is created by debt
future natural resource shortages
over populated and polluted biosphere
transfer of risk onto individuals
cutting supports & renaming them entitlements
disparity between have & have nots grows
consolidation of power at every level
prices rise, jobs disappear
social unrest, anger and competing narratives

Figure it out people! Its right in front of you.... Oh! and quit spewing this nonsense that it is the left's fault or right's fault. There are in together. They named when Geithner first spoke about the stress tests..... power calls it a public-private partnership (PPP).... this does not bode well for the third group: consumers.... So, maybe we should be working together as we all are legitimately angry and have vested interests that have been co-opted....

24. trendisnotdestiny - August 12, 2010 at 10:01 am

TYPOS: administration (twice); there are a few others as well

25. hawkeyecc - August 12, 2010 at 04:02 pm

To trendisnotdestiny,
Your post is both enlightening and frightening. The most detrimental impact on our economy, and on the marginalized populations throughout the world is globalization. The huge multinational corporations direct policy in almost every country in the world now. Money talks, and leaders listen.
Our educational system depends on a system of support, or education will only be available to the elite. As governments are futher coopted and corrupted, our funding for services for the poor will be impacted. Our students will suffer. We will suffer, after all, educators work for near poverty level wages.
Great post, I enjoyed reading it.

26. trendisnotdestiny - August 12, 2010 at 06:45 pm

@ hawkeyecc

"The most detrimental impact on our economy, and on the marginalized populations throughout the world is globalization."

Exactly, the focus becomes Global GDP growth for countries in a global free market and poverty reduction becomes a talking point for elite organizations while skiiing and having business meetings in Davos....

"Our educational system depends on a system of support, or education will only be available to the elite."

True. I find it very interesting that the privatization crowd (or creating new markets in higher education) is using this very idea to paint resistance as supportive of elites.... In free markets, the idea of a meritocracy (American Dream) is hugely important... However, they want to sell higher education to as many people as possible for profit not as a means to give all people an education who wants it; it is a by-product of deeply annuitized revenues.

We should be on guard when the discussion moves to elite education versus fit all of them in who come through the door. The central issue becomes cost/benefit of debt to diploma model. We must find ways for people to be productive without having to spend 40K-50K for an education taught largely by institutions looking to cut costs and increase tuition. Elite and populists positions get intertwined as the market model becomes more profitable and for-profit institutions get on terra ferma....

"As governments are futher coopted and corrupted, our funding for services for the poor will be impacted. Our students will suffer. We will suffer, after all, educators work for near poverty level wages."

Yes, those with least resources in an information age will be impoverished for several generations as the central avenues for quick changes in station will come from the business sector. Teachers as we know them now become the patsies... as this new wave of corporatism will need to recruit a whole new generation of teachers more aligned with the funders' world view....

This is pretty frightening hawkeyecc! But maybe we still can do something about it if we are able to work towards common goals and avoid the divide and conquer tactics that require ideologues to spin their wheels...


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