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Editor's Note

A Silver Lining to the Economic Crisis?

University Business, Nov 2008

THESE ARE UNCERTAIN ECONOMIC TIMES, to be sure. When the stock market can both take its largest point plunge and post its largest gain within the space of a week, the term “rollercoaster economy” seems a gross understatement. But there are some industries that are usually seen as recession proof, and education is one of them. That’s not to say that colleges and universities aren’t feeling the effects of the credit crunch, only that higher ed faces a somewhat different set of circumstances.

Colleges don't need to just 'manage,' they need to continue making strategic investments in their future.

Many states were caught off guard by the magnitude of the economic downturn. What is unique this year is the credit crisis. Different institutions are reacting in different ways. Some institutions are postponing large construction projects, or even calling for hiring freezes, but these are often touted as preemptive measures.

The other factor is that, historically, enrollments swell in a poor economy. This year, IHEs are faced with a record number of students graduating from high school, as well as thousands of laid off workers returning to school to learn new skills that will make them more marketable in a new economy.

For example, the Minnesota State Colleges and Universities system is reporting a 3 percent increase in enrollment over the last year. Enrollment at Massachusetts’ public institutions climbed more than 4 percent, while Utah has seen an 8.5 percent increase in students this fall.

Six schools in the 23-campus California State University system have been declared impacted for fall 2009. Across the CSU system, nearly 50,000 applications had been received so far—a 21 percent jump over the same time last year.

In some respects, that’s a good problem to have, said Sonoma State University (Calif.) Director of Admission Gustavo Flores in a news report.

“It’s good because it allows us to plan,” he said. “It’s bad in that you are not able to accommodate every student.”

It also makes carefully considered budget projections a fond memory at a time when some 20 states have announced cuts to public university budgets.

But budget cuts don’t necessarily mean spending cuts; they mean that spending decisions must be more carefully considered.

The laid off workers who return to school to improve their marketability are investing in education because they expect it to help them to a better career down the road. Higher education must keep its end of the bargain by not letting these students down. Colleges and universities don’t need to just “manage,” they need to continue making strategic investments in their future. If there is a silver lining in all this, it is that the institutions that continue to invest—judiciously—in technology and infrastructure improvements during these difficult times will emerge as leaders when the economic picture begins to improve. Those that don’t will be forced to play catch up.


Write to Tim Goral at