Plummeting economy hits US higher education hard

From Financial clouds bring gloom to US institutions by Jon Marcus

The mood indoors matched the weather. State appropriations for higher education, which depend on tax revenue, have plummeted - down 15 per cent since October alone in the case of William and Mary - and interest from endowments has fallen even faster. With their parents suffering layoffs or business reversals, more students are likely to need financial aid. And donors, their own investments drying up, have less to give.

"We really are a good case study for the perfect storm," said the university's president, Taylor Reveley, rain coursing down outside the windows of his office. "And we're still early in feeling the full force."

Although some seem to have been hoping they could ride it out, the recession has now hit US universities. They have lined up behind banks and car manufacturers asking for money from the Federal Government, so far without response. They want billions of dollars for science and engineering staff, research into energy alternatives and infrastructure improvements.

And they have started to cut spending. William and Mary has delayed the implementation of a 3 per cent pay rise for all staff, for example, and has cancelled some journal subscriptions.

But the sector's financial leaders warn that this downturn will affect higher education in ways that require far more drastic action than trimming at the margins or asking Washington for a handout.

"The nature of this challenge is so much greater than any of us have seen in higher education," said Stephen Golding, vice-president for finance at Cornell University.

"If we're going to continue to teach, if we're going to continue to do research, if we're going to continue to provide students access to our institutions, we have to stop doing other things that don't support the core mission."