Education

State universities’ financial woes burden students, taxpayers

 
By Vimbai Chikomoa
for ILLINOIS NEWS NETWORK

(First of four parts)

As college students across Illinois’ nine public universities make their way to their respective campuses in the days ahead, few may realize just how little of their tuition is going directly toward instructional spending for the 2016-17 academic year.
 
A 2014 analysis of higher education funding by the Illinois Department of Insurance revealed significant amounts of the state funds public universities receive are directed toward funding university retiree pensions.
 
The report went on to state that $6.9 billion in tax-based funding has subsidized university pensions over the past decade, with $1.51 billion spent in 2014 alone. Because state universities received $1.24 billion in general state aid that year, student tuition payments covered the $270 million pension subsidy shortfall.
 
Equally alarming is the fact state universities’ administrative costs have skyrocketed.
 
State Rep. Dan Brady, R-Bloomington, said one of the driving forces behind this increase is state universities trying to be competitive in the higher education field to retain faculty and staff, which has become difficult to do given the state’s well-documented financial troubles.
 
Nonetheless, the board of trustees at each state university has a responsibility to taxpayers, he said.
 
“It’s the fiduciary responsibility of trustees to speak for the taxpayers when it comes to the operations of the university, salaries and staff,” said Brady, who sits on the House Appropriations-Higher Education Committee.
 
According to the 2015 Senate Democratic Caucus Investigative Report on Executive Compensation at Illinois Higher Education Institutions, the number of employees hired by state colleges and universities to manage or administer people, programs and regulations, “has continued unabated in recent years, increasing 50 percent faster than the number of instructors between 2001 and 2011,” based on data collected by the U.S. Department of Education.
 
To pay salaries and provide benefits for all administrators, universities have raised tuition rates, forcing students to dig even deeper into their pockets to absorb the costs. This, in turn, increases pressure for some students to take on student loans and service that debt as they begin their careers.
 
According to the report, the growth in revenue from increased tuition rates, “has been used to support an increasingly larger bureaucracy and excessive administrative salaries,” evidenced by the need for increased state contributions to cover the pension and health care costs of administrative growth.
 
“But as colleges and universities have had more money to spend, spending for instructional resources – that is, paying faculty – has not kept pace with the dramatic increase in spending on administrative and staff resources,” according to the report.
 
Highlighted in the Senate report was a comprehensive study by the Delta Cost Project in 2010 that found that, between 1998 and 2008, spending on administration and staff support in the nation’s higher education institutions increased by almost 36 percent, while instructional spending increased only 22 percent.
 
Trying to maintain that level of spending has landed some universities in financial quicksand.
 
The Chicago Tribune recently reported that, since the beginning of the year, Chicago State University has laid off nearly 400 employees and paid $2.2 million in severance pay, because of a long-standing school policy mandating one year's notice before termination of an employee or a payout for the time.
 
Although required, the amount is considered generous when compared to severance packages the majority of schools provide in other states.
 
When taxpayer dollars aren’t enough to cover universities’ spending, the financial responsibility shifts to students.
 
Between 2005 and 2015, tuition increased 71 percent at the University of Illinois Urbana-Champaign campus, partially due to decreased state-government funding. The University of Illinois system saw a $36 million (5.2 percent) reduction in state funding during that time period.
 
According to the Senate report, in 2011, the University of Illinois employed 4,301 full-time faculty and 2,549 administrators – the most among Illinois’ public universities.
 
By 2015, a university brochure placed the number of University of Illinois faculty at 6,068, and administrative staff and academic professionals at 7,632 – three times higher than the number of administrative staff four years earlier.
 
“We’ve combatted (tuition hikes) by having, for two years in a row, tuition freezes for in-state residents,” said Tom Hardy, executive director of the University of Illinois' Office for University Relations. “And (University of Illinois President Timothy Killeen) recently talked about doing that again next year.”
 
University of Illinois' tuition and fees in 2015-16 for Illinois residents were $15,630 to $20,634, according to the university's website.
 
“The time is upon us to have discussions of consolidation in higher education much like has occurred over the years in K-12,” Brady said.

Tomorrow: Competitive neighboring states poach Illinois college students

About the Author