Financial Crisis On The Capus
Bullough, Vern L.
Financial Crisis on the Campus by VERN L. BULLOUGH The halls of Academe are under fi- nancial siege these days. A recent survey by the Association of American Colleges of some 554 institutions...
...It was decided to cut the program by not using part of the equipment in the hope that additional funds will be available next year...
...funding of the high status private institutions in that its 1970-71 budget depended upon Federal support for slightly more than a third of its total...
...Higher education is in deep trouble today, not only because of ac- tivist students or disenchanted alumni, but in large measure because of the shift in the nature of higher education brought about by the activities of the Federal Government...
...Federal funds have also changed salary schedules...
...Even in non-defense fields, there is unemployment of Ph.D.s, and the Government again has to bear some, if not all, the responsibility for this...
...grants for such centers have become more and more difficult to find...
...Some chose to accept "soft money" jobs over academic ones be- cause they paid better...
...Berkeley, $50 million, and Minnesota, $50 million...
...One half of this amount went to institutions in thirteen states with the Middle At- lantic (New York, New Jersey, Penn- sylvania) receiving $627 million, East North Central (Ohio, Indiana, Illi- nois, Michigan, Wisconsin), $589 mil- lion, and the Pacific (Washington, Or- egon, California, Alaska, Hawaii), $518 million...
...In turn, the universities, to keep their faculties in balance, expanded the enrolment of graduate students in other departments without considering real needs...
...Smaller colleges receive most of their Government money in the form of grants and loans for student aid...
...As one who has received several Government grants, and is currently supported by a private foundation, I believe that re- search is not only important but essen- tial...
...Financial Crisis on the Campus by VERN L. BULLOUGH The halls of Academe are under fi- nancial siege these days...
...It is this kind of expansion which now sharpens the crisis...
...The result has been an almost geometric increase in the number of individuals on college and university campuses who were hired not to teach but to do research...
...A telling example of this is the med- ical school on the Los Angeles campus of the University of California...
...If the students were compromised by such tactics, so were the faculty...
...Some 3,000 chemistry Ph.D.s were also graduated this June to face a situation in which 7.3 per cent of all chemists are now unem- ployed or underemployed...
...Now, with the drop in Federal funds, the college can no longer support the graduate program and is falling ever deeper into debt...
...Stanford recruite Arthur Kornberg and Joshua Lede berg, both of whom won a Nobel pri: while at Stanford, although almost a of the support for the two as well < for their group of associates came froi the Federal Government...
...The re- sult is today's glut of Ph.D.s...
...I has escalated the price of research, en couraged the growth of larger anc larger staffs, and increased the num ber of conferences and field trips, al of which could be charged to the Gov ernment...
...More- over, supplies were usually purchased by the educational institution, which meant that the university could pur- chase at wholesale and charge the Government at retail, or add on a service charge...
...Louis Even with increased grants from pr vate sources, few schools could kee up with escalating costs such as thoi faced by the Stanford medical schoc In the 1969-70 year, for exampl the University of Chicago receive $31,192,994 in gifts and pledges, u some $259,000 from the previous yea In the first half of the school yes 1970-71, there was a further small ir crease, but the school still ran at a de icit because of cutbacks in Federal ai< A study sponsored by the Commissic for Independent Colleges and Univei sities of Pennsylvania, covering ninet per cent of the state's private schoo and universities, found that the d< creased level of Federal support w; mainly responsible for acceleratiri their problems...
...But evei with these qualifications in mind, then can be and should be serious criticisn of the present approach to Govern ment funding, both for research an< for other higher education projects...
...When sup- port is reduced, equipment becomes surplus, and suddenly there is no mar- ket for it...
...The most obvious examples of soaring costs have occurred in medical schools, which dur- ing the past ten years, in spite of mas- sive infusions of Federal money, have become almost impossibly expensive to operate and have done little to increase the size of their graduating classes...
...it happened because these fields could more easily be brought un- der the established agencies awarding grants in medicine and science...
...A recent survey by the Association of American Colleges of some 554 institutions found that at least one hundred were running significant deficits...
...Many universities have computer centers which they cannot afford to operate without further Government funds...
...Unfortunately, in far too many cases, no other means of support was forth- coming, and schools now find them- selves with expensive programs which they are unable to support by endow- ment or student fees...
...Private aid, on the other hand, has gone down slightly—some $20 million, or less than one per cent in 1969- 70...
...Receiving the largest amounts were MIT, $98 million...
...Usual- ly the amount of the grant declined each year because the school was sup- posed to find support from other sources to keep the program going...
...Stanford, $51 million...
...degree...
...The need for Russian and Chinese special- ists might be justified as in the defense interests of the nation, but the demand in colleges and universities for such specialists is not yet great enough to handle the resulting oversupply...
...Not only has the Government af- fected the administration of institu- tions, the work of professors, and scholarships for students, it has also had great effect on the equipment a university will buy or operate, since grants have been awarded to operate and maintain specific kinds of equip- ment from computers to cyclotrons...
...Office of Education, for example, had twen- ty-three active councils advising them on various projects...
...This use of panels, designed to avoid hiring specialists full time by the Office of Education, had the effect of building an educational and scientific estab- lishment which, through its control of grant funds and nominees for panels, could demand greater conformity in research and other projects than would have been possible otherwise...
...an increasing number of them never even offered courses...
...Institutions which previously had giv- en lip service to research, but had com- mitted little of their own resources to further it, almost overnight changed into research-oriented institutions in which teaching, because it returned less money, too often became secondary...
...In 1970, the National Institutes of Health (NIH) curtailed its support of higher educa- tion by an estimated twenty per cent, and other agencies, the National Sci- ence Foundation and the National In- stitute of Mental Health for example, had similar though usually less severe cutbacks...
...Washington, $56 million...
...It is not only the cutback in Federal funding which has caused a crisis...
...These Federal activities need and deserve serious re- consideration...
...The rest of its budget came from tuition, approx- imately nineteen per cent, and from the fees of patients at the University's hospitals, nearly nineteen per cent...
...One institution with which I have had experience charged the grant project seven cents for every six cent stamp (today it is nine cents for every eight cent stamp...
...During the past decade, Federal support of higher education escalated until it reached nearly three and a half billion dollars in fiscal 1969...
...The worst excesses inevitably took place in those fields where the great- est amounts of Federal money were available, in medicine and in the sciences...
...As em- ployed, the method lacks the built-in cost controls of other types of appro- priations, and this has caused univer- sities, like the defense industry, tc raise prices...
...Navy, the U.S...
...It now has 455 members in UCLA's Academic Senate—that is, employes with ac- ademic rank—but there are only 503 students working for an M.D...
...It is perhaps not so much a matter of reordering our pri- orities as establishing our priorities...
...For ad- ministering the grants the university was allowed to charge for overhead costs...
...In 1959, the budget for the medical school was $5.7 million dollars...
...The result was pressure not to save money but to spend it, and even in some cases to request deficit appropri- ations from the Government—with ac- companying administrative costs...
...He has served as chairman of his college faculty research committee and as vice president of the San Fernando Valley State College Foundation which, during his tenure, received several million dollars in Federal grants...
...The U.S...
...It is no surprise that many students have been rebellious, although they of- ten do not realize the cause of the malaise...
...During the pa...
...If the funds are insufficient, serious prob- lems will have to be faced...
...At times the Government has given large grants to schools to encourage them to initiate new programs...
...The point of these illustrations, which could be further extended with- out changing the general picture, is not to argue against the basic concept of Government funding nor to dispute the importance of research...
...The Univer- sity of Chicago projected a deficit of $6.5 million, Johns Hopkins $4.3 mil- lion, Stanford University $2 million, Yale some $3 million, and the remain- ing Ivy League universities ranged from $3 million to $10 million...
...No college or University can afford to maintain such a ratio, whether from state or from private funds...
...Inevitably, even the small private schools find themselves with more faculty and staff than they can use and they either have to cut back faculty or run a deficit...
...The universities have been allowed to charge administrative costs, which in recent years have amounted to as much as fifty per cent of the grant, although the amount is dependent on the bargaining ability of the institution and the Federal agency involved, rath- er than a fixed sum...
...He has received grants from the U.S...
...Almost any sociology graduate student who was willing to study medical sociology found Government money to support him...
...Government grants were and are lucrative...
...In the year 1969-70, 104 public an private institutions had doctoral pre grams in science supported in one fori or another by the National Scienc Foundation (NSF...
...Once an award was made it was in the interest of an insti- tution to spend all the money appro- priated since the university would lose a percentage of any money returned...
...Some students, as students will in such cases, found out how to beat the system by pretending to become med- ical sociologists and then entirely ig- noring the field once they received their degrees...
...A good example of what hap- pened, and a case study of why higher education is in crisis, is Stanford Uni- versity and its School of Medicine...
...The budget for the Cambridge Elec- tron Accelerator used by schools in the Boston area was cut by thirty per cent in 1971, which meant that the project's personnel or program had to be reduced...
...Others were not fully qualified or could not be hired at the academic positions they wanted...
...Before the Government en- tered the research field in force, re- search grants were usually given to individuals...
...One engineering college in the New York City area is reported to be on the verge of bank- ruptcy mainly because the funds it re- ceived from a Government award for past achievements were used., with Government encouragement, to expand a graduate program...
...Most physicists were employed in aero- space, defense work, or in academic institutions, all of which now are cut- ting back...
...Five years ag the schools had $16 million in surph funds...
...The lavish nature of earlier Government funding, particularly in the major re- search-oriented institutions, has led to a major shift in the direction of higher education...
...On the other hand, the College of Letters and Sciences, with far more doctoral candidates plus 20,000 under- graduates as well, has only 874 faculty members in the Senate...
...Michigan, $61 mil- lion...
...The fifty-three members of the California Association of Independent California Colleges and Universities anticipated receiving $10.3 million for student grants and 4oans from the Government during the 1971-72 school year but in- stead will receive only $6.9 million, a one-third decrease...
...In the past, a consortium of schools, assisted by a grant from the Government, would have purchased the equipment, but this does not now seem likely...
...In fact, with the guaranteed percentage paid for over- head administrative costs, a salary raise might make money for the uni- versity...
...Kornbei brought his whole microbiology grou with him when he migrated west froi Washington University in St...
...The whole process has in flated the cost of education until pres ent higher education budgets seem be yond the means of private donors, stu dent fee increases, and even state gov ernments to handle...
...Rather the chief culprit is the Federal Government...
...The Government has con- tinued this concept in theory, but in practice Federal grants have since been administered by institutions...
...California led all states in 1969 with $206 million...
...Generally the extent of Government involvement has been the greatest at the most presti- gious institutions, but it has affected almost every segment of higher educa- tion...
...though Princeton University will receive the buildings and the ac- celerator, there is considerable doubt about the university's ability to finance its operation...
...A perti- nent example are the physicists who were, until recently, in extremely short supply and commanded high salaries...
...Columbia Univer- sity led the list with an estimated def- icit of $15 million for the current year...
...such advice cost $1.1 million in fiscal 1970-71...
...Public institutions initially seemed better prepared to weather the storm because they are tax-supported primar- ily, but state after state has called a halt to increases in appropriations for higher education...
...The Atomic Energy Commission, for example, announced it would close down the Princeton-Pennsylvania Ac- celerator...
...Columbia, $52 million, Wisconsin (Madison), $51 million...
...This Government largesse has re- cently begun to decline...
...Large numbers of professors have been given appointments to serve on grant panels or advisory units for which they received $100 per day plus travel ex- penses for meetings...
...Since tuition pays a good part of the budget at most of the smaller schools, any drop in student enrollment must either lead to a deficit or to a curtail- ment of expenditures...
...Gifts, endowments, and similar income financed only twenty-nine per cent...
...Unfor- tunately, few medical schools teach medical history, and even fewer have full time faculty members teaching the subject...
...Columbia does pose special prob- lems, but it is not unique...
...Such practices brought sweeping changes to Academe...
...Moreover, since the amount of money an institution received as overhead depended upon the size of the grant, the cost of research tended to escalate as more and more expenses were written into the proposals and the universities made little effort to keep costs down...
...This was permis- sible when the bulk of the money came from the Government, but now, as stu- dent fees climb and state legislatures are faced with demands for increased university budgets, there has been a new awareness of the crisis...
...With the cut in Federal support of student grants and loans, students who are unable to afford the fees of private colleges have turned to public institutions in increas- ing numbers...
...What the crisis calls for is a reas- sessment of the aims and purposes oJ Federal intervention in higher educa- tion...
...This requires an understanding of the full implica- tions of future Federally supported programs...
...In history, for example, there was full Federal support for students of Russian and Chinese history, and the history of medicine and science, but not in most Other fields of historical study...
...Though it is possible to calculate interns, residents, and post doctoral fellows as students, and thus slightly increase the student-teacher ratio, those who do so should also include the part-time medical faculty—which in the case of UCLA amounts to more than those on full time—to demon- "The Federal grant method • . • has, in the long run, led to higher education's threat- ened fiscal disaster/7 strate the same ratio...
...Increasingly, schools have con- to depend upon the Federal Goverr ment, but it seems unlikely that th Government will help them on th scale that it has in the past...
...Stanford has 375 full time faculty members in its medical school and 357 medical students...
...Individuals were recruited for facul- ties because they had access to Govern- ment grants or knew how to get them, not because they met any student de- mand...
...Contrary to popular opinion, however, the flow of red ink has little to do with student dissidents, dissatisfaction of alumni, hostility of state legislators, or even the decline of the stock market...
...The availability < Federal grant funds allowed Stanfoi to attract people who would great enhance the university's reputatic without requiring it to expend muc of its own funds...
...The present situation, like Topsy, has just grown, with little serious realiza- tion of the costs or the implications...
...colleges and universities quickly found that a commitment to research could bring in additional funding, particularly in the biological and physical sciences...
...Someone apparently thought it would be nice to have more medical historians without realizing where they were going or what they were going to do...
...For this adminis- trative fee, the university keeps the necessary records for the Government auditors, issues checks, keeps time sheets, and sometimes advances mon- ey, since Federal reimbursement is often delayed by several months...
...Many of the less well- endowed medical schools are near bankruptcy, and even tax-supported schools in states like Utah are in finan- cial difficulty...
...two years, as Federal expenditures i these areas have become "sluggish, they have had to turn to other source The public institutions turned to the forms of governmental aid, but the ex- tent of their difficulties is measured by the fact that twenty-eight per cent of the private schools and nine per cent of the public ones reported cut- backs in their outlays for academic science last year...
...VERN L. BULLOUGH, an historian at San Fernando Valley State College, has had wide experience in the area of Federal aid to higher education...
...UCLA, $53 million...
...During this same span of years Federal grants to the medical school rose from $2.3 million to $15 million, from forty-one per cent to sixty per cent of the budget...
...The same lack of planning was ev- ident in medical sociology...
...Navy, for example, is presently junking a $6 million cyclo- tron and cannibalizing it because it can find no buyers...
...It is essential that we examine our assumptions and take corrective meas- ures before the crisis becomes insoluble...
...The grant also paid for tele- phones, office space, secretarial assis- tance, library use, laboratory space, supplies, and, in the case of larger grants, for the staffs involved...
...The sixty-eight schoo in the survey had an aggregate $1 mi lion deficit, and it was estimated th< their total deficit will reach $41 mi lion in five years unless new source of revenue are found...
...California's pri- vate colleges are particularly hard hit because tuition and fees already range from $2,500 to $4,500, while the state- supported junior colleges are free, and the state colleges and universitites re- quire only minimal fees...
...The University of Chicago is per- haps typical of U.S...
...Califor- nia Lutheran College in Thousand Oaks, unable to resolve which to do, decided not to send out contracts to faculty members until the opening of the school year, and urged those fac- ulty members who wanted to retain their jobs to recruit new students over summer vacation...
...The various campuses of the University received as much from the Federal Government as they did from the state of California...
...Equipment bought with grant funds usually remained with the insti- tution...
...It is much more difficult to justify the sub- sidization of historians of medicine or science...
...This year some 1,500 phys- icists received their doctorates, flood- ing a job market in which ten per cent of last year's crop of Federally subsidized graduates still either have no jobs, have left the field, or are "un- deremployed...
...The consequences of such retrenchment at the Federal level have been nearly disastrous to colleges and universities, both because of the extent of past Government support and the way in which it has been given...
...The Federal grant method whether it supports scholarship or re- search or building programs, has, ir the long run, led to higher education's threatened fiscal disaster...
...who went to school at Uncle Sam's expense, I fin< no basic fault with the principle o Government fellowships...
...Of- fice of Education, and the National Science Foundation...
...Now is the time to re- examine higher education programs, and make some basic decisions as to how they should serve the country and its youth in the future...
...The U.S...
...As a former G.I...
...Those faculty members not on Government grants generally did not protest because the university usually made some attempt to raise their sal- aries as well to keep them satisfied The Government's grants also en- couraged increased production of poten- tial researchers and professors in some favored fields without regard to the long term consequences...
...in 1969-70 it was $25.5 million...
...a person on a grant could have his salary raised and paid for by the Federal Government with- out increasing the university's contri- bution although it added to the total university budget...
...Har- vard, $70 million...
...During the past decade of rapid research-oriented expansion most insti- tutions of higher learning spawned a brood of "soft money" employes, em- ployes whose wages and perquisites were paid for with grant money and who lacked academic tenure or job security...
...Though "The whole process has in- flated the cost of educa- tion . . the total monetary commitment < Stanford had increased, the universil managed to build an ever more con plex research school until the day < reckoning came...
...Inevi ably, their plight will worsen...
...All private contributions—from alumni, corporations, and foundations —amounted to $1.78 billion, somewhat less than the Government's contribu- tion to higher education...
Vol. 35 • August 1971 • No. 10
