Community Colleges Face Financial Challenges

By Staff

The financial outlook for community colleges is improving, but the two-year college systems in many states remain under significant stress, according to a survey released this month. The study is based on a survey of state directors of community colleges, and is conducted annually by the Education Policy Center of the University of Alabama at Tuscaloosa.

Since the economic downturn started in 2008, community colleges (and the rest of public higher education) have been hit by many rounds of mid-year budget cuts, followed by flat or decreasing budgets, and the new survey suggests that this trend may be changing in many states. Only directors in five states — Connecticut, Georgia, Hawaii, Louisiana and Wyoming — reported mid-year budget cuts in 2012-13. In 2008-9, two-thirds of states were reporting such cuts.

Looking ahead, most state directors are predicting increases for this year for community colleges, with the average increase projected to be 4 percent. Only five states — Georgia, Louisiana, Missouri, North Carolina and West Virginia — are projecting decreases in 2013-14. The state directors report considerable worry about the ability of students to pay for college. Most states are projecting tuition increases, and a majority expect state student aid programs to either be cut or to increase at less than the rate of inflation for higher education. Many of the state community college directors surveyed are expecting increased enrollment pressure as four-year institutions impose enrollment caps, and community colleges become the sole option for many students.

Generally, the survey suggests more pressures at rural community colleges, compared to urban or suburban institutions. Stephen G. Katsinas, director of the Education Policy Center, said that in states that rely on state and local support, many have pulled back on state funds. This has led some suburban and urban community colleges to find funds to replace some of the state losses. But that doesn’t happen for all community colleges, he said.

“Some urban and wealthy suburban areas can make up the difference, but you can’t raise the funds in rural poor areas,” he said.