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In the light of these inescapable increases in the costs of operation, it is inevitable that, as shown in table XII (appendix), the total expenditure for educational and general purposes of the 713 reporting institutions for 1943-44 and 1944-45 (estimated) were 126 percent and 115 percent of the base year, 1939–40. Increases for these years are also shown when the total number of reporting institutions is broken down into five major types, as appear in table XII (appendix). The same is true when these institutions are classified by size, race, or sex (tables XIII and XIV, appendix). Higher educational institutions with military programs show a greater increase for 1943-44 over 1939–40 than those without such programs. In 1944-45 the estimated increase in expenditures over those for institutions both with and without military programs was approximately the same (table XIV).
The figures showing expenditures for instruction only (table XV, appendix) reveal changes similar to those for educational and general expenditures, but less in amount and degree. For all institutions of all types, the average increases in expenditures for instruction for the years 1943-44 and estimated 1944-45 were 110 and 104 percent, respectively, as compared with those for 1939–40. Analyzed by types of institution, teachers colleges, normal schools, and junior colleges depart slightly from this general trend. These three groups reduced instructional costs a little below 1939–40. If the data for all institutions reporting are broken down according to size and further subdivided as between (a) civilian only and (b) civilian and military students (table XVI, appendix), the data are more significant. All groups of colleges and universities, with the exception of the institutions with enrollments of less than 300 and one institution with an enrollment over 5,000, that had no military programs reduced their instructional costs for 1943–44 below the 1939-40 expenditure. With the exception of the one institution noted above, there was a slight increase in the estimated amount for 1944-45 over the actual instructional cost for 1943-44. On the other hand, in the case of institutions which had military programs the average expenditures for instruction in all sizes of institutions increased substantially for the year 1943-44 as compared with 1939-40. Instructional costs for 1944-45 (estimated) then declined to a level somewhat above 1939–40.
The statistics covering expenditures for operation and maintenance of plant (table XVII, appendix) in institutions of higher education also indicate that such costs tended to increase markedly for 1943-44 over the pre-war year, but the estimates for all institutions show a slight decline (2 percent) for 1944-45 from those for 1943-44. For the reasons already mentioned, it is obvious that it is possible to make reductions in expenditures for operation and maintenance of plant neither as quickly nor as extensively as was possible in connection with expenditures for instruction. Conclusion.
This analysis of expenditures clearly shows that costs of operation of higher educational institutions have risen from 1939–40 to 1944-45. This is true of all types of expenditures whether classified as educational and general, instructional or for operation and maintenance of plant. On the other hand, owing to the striking decline in student enrollment, income from student fees has dropped precipitously. The inevitable consequence of rising costs and declining income is continuously increasing deficits. At the present time there is no indication that these trends will be modified except by legislative action by the Congress in providing a source of income through contracts. Analysis by individual institutions.
As stated above, all of the tables on the financial situation of colleges and universities (tables VIII to XVII, appendix) are total figures. Even when broken down by type, size, or sex, significant deficits in several institutions are balanced by a surplus in one large, favorably situated institution. For example, the total of the operating budgets of seven large private universities is greater than the combined budgets of all of the men's colleges that did not have a military program.
The following analysis of individual institutions is based upon a comparison of total income and total expenditures as reported by individual colleges and universities. (This analysis is supplemented by returns from a follow-up study, described later in this report.)
Table XVIII (appendix) is representative of the data on which the following analysis is based. Institutions were classified by type and the data were listed separately for each institution. Even such an analysis cannot be complete as it does not take into account the sources of operating income. The detailed reports show that many institutions temporarily supplemented their income by borrowing or by seriously depleting financial reserves.
Such an analysis does, however, show the estimated operational budget as given in a confidential report to the Advisory Committee. It is more than an indication of trends; it is a statement of the financial situation faced by each individual institution. For purposes of comparison the colleges are grouped into seven types:
1. Colleges for women.
7. Junior colleges, both public and private. 1. Colleges jor women.-The total number of women enrolled in all colleges and universities declined slightly. This was due primarily to the sharp decrease in the enrollment of teachers' colleges and normal schools. However, loss of enrollment in most senior and junior colleges for women has been negligible. Many of them have larger enrollments in 1944-45 than ever before and, with a few individual exceptions, the financial condition of these institutions has not been adversely affected by the war.
2: Prirately administered 4-year colleges for men.--A study of 49 men's colleges for which adequate records are available reveals that 12 currently show balanced budgets; of the 37 which estimate deficits for the year 1944-45, two-thirds have deficits of 10 percent or more.
The 12 institutions which currently show balanced budgets are, with 4 exceptions, administered by religious orders and their instructional cost is much less because of a high ratio of nonsalaried to salaried instructors. These institutions have all effected important, and in some cases drastic, economies. Two report that special gifts will total over one-fourth of the income for the current year, and 3 have reduced the faculty one-third or more. These, and other adjustments, make possible a balanced budget but they clearly demonstrate a weakening of institutional effectiveness. Half of these institutions still have military programs, hardly any of which are likely to continue beyond the current academic year. These institutions will then be faced with the necessity of further curtailments, and 3 report that they will face heavy deficits.
The 37 men's colleges with an estimated deficit for 1944-45 face a critical situation now. The number of civilian students in these institutions has dropped to an average of 21 percent of the 1939–40 enrollment and in some it has dropped to 10 percent. The number of faculty members has been cut one-third on the average, as high as one-half in certain cases. Significant financial adjustments have been made in all of them, and still they estimate an average deficit of 13 percent. The range of estimated deficits is from 3 to 73 percent with 27 out of the 37 having deficits exceeding 10 percent. Balances and reserves, exclusive of restricted endowment, in many cases have been wiped out. Gifts, while abnormally high, are insufficient to offset deficits.
All of this takes on added significance when it is remembered that military units are still operating in 26 of these institutions and very few, if any, of these will continue beyond the present college year. One of these institutions, for example, currently receives three-fourths of its income from a Navy contract and still shows an estimated 10 percent deficit. The present year is a very serious period for these colleges and with drastic curtailment or elimination of training programs already well on the way, critical conditions face them in the ensuing year.
3. Privately administered 4-year coeducational colleges.- Many of these colleges did not have the privilege of participating in Army or Navy training programs at any time. A study of 78 such institutions reveals that 43, or over half, expect a deficit for 1944-45; 7 of these will have deficits between 10 and 25 percent and 7 others will have deficits between 25 and 38 percent. These institutions have had a difficult financial struggle since the beginning of the war and only by enrolling additional women students, reducing faculty personnel, making strenuous efforts to secure abnormally high gifts, and effecting every known economy have they been able to weather the storm thus far. Many of them cannot long continue to render effective educational service on the present basis.
An analysis of the reports of another group, made up of 85 coedutional colleges which have had, or still have, military training p:0grams, indicates that 40 are operating on a balanced budget for the current year while 45 estimate a deficit, even though numerous adjustments have been made in the attempt to offset the loss from student fees.
Of the 40 institutions which are currently operating on a balanced budget, 25 have done so because of income from Navy V-12 units, and several others because of income from A. S. T. P. and other programs relating to the war effort. More than half of these institutions have little or no hope of continuing the military programs beyond the dir rent year. In most cases the estimated budgets show greater income than is likely because institutions were not, at that time, fully appraised of the gradual elimination of military programs. The result will be that many of them will show deficits by the end of the current college year which they did not anticipate in September 1944. In the following year they will be in a situation similar to that of the other coeducational colleges now actually experiencing serious deficits.
Seventeen of the institutions have taken more or less drastic action to secure a balanced budget. The following are illustrations: 1 has cut its faculty from 99 to 22; another has received gifts totaling more than one-fifth of its total budget; another has become an exclusively V-12 institution, eliminating entirely its civilian students and now may lose its students in uniform. Others have eaten into reserves or bank balances or borrowed money to make up the difference. Although these financial adjustments permit the showing of a balanced budget, they indicate a weakening of the institutions. They may be, therefore, really in no better condition than the 45 institutions with a deficit, and in certain cases may not be in as stable condition.
The 45 institutions with a deficit range from those which currently had resources on which to draw to those which had already used up such reserves as they had been able to establish. Half of them have had, or still have, military programs. The average enrollment in these institutions is approximately half what it was in 1939–40 and the average estimated deficit is 10 percent for the current year. They fall roughly into three groups: (1) 9 institutions, which have a budget showing income up to 10 percent under expenditures. This deficit would be greater were it not for the fact that over half of these institutions have military programs, and practically all have effected economies by a reduction of the faculty, lessened appropriations for maintenance, library, etc. (2) Nineteen institutions, which have a current income from 10 to 20 percent less than expenditures. Only a few of these have military programs; enrollments dropped off from 25 to 50 percent of their enrollment in 1939–40 even though more women were admitted; faculty personnel was cut from 10 to 40 percent; and other economies were effected. (3) Seventeen institutions, with budgets showing income from 20 to 35 percent under expenditures. None of these institutions had military programs of sizable proportion; economics of all sorts were effected; and with depleted enrollments their effectiveness is seriously impaired. All of the institutions in these 3 groups face further deficits, even increasing ones, as the war goes on. At the same time they possess less vitality.
4. Privately administered universities.-Fourteen private universities were segregated for study since their enrollment is ordinarily so large that that of other institutions is dwarfed in comparison. Of this group seven report a balanced budget and seven others estimate deficits up to 15 percent with an average of 5 percent.
Of those which report balanced budgets, the percent of income from military programs is considerably greater than that of most of the other institutions. When those programs are curtailed or eliminated these institutions may also be in as serious financial difficulty as other institutions.
The seven institutions which currently report a deficit also have military programs of sizable proportion yielding an income up to 56
percent of their total income. Any decrease in this source of income will result in larger deficits for these institutions.
5. Publicly administered coeducational 4-year colleges and universities.- These coeducational 4-year colleges and universities have been forced to make numerous adjustments because of the loss of enrollment, but their financial condition as a group is not as critical as is that of privately administered institutions. This condition is due largely to the fact that they are less dependent upon income from student fees than are privately administered institutions, and to the additional fact that supporting State or municipal agencies have increased their appropriations to offset what might otherwise be serious deficits.
Of 74 such institutions for which information was available, 43 show balanced budgets and 18 others have deficits under 10 percent. Fifty-four have received considerably increased appropriations from public sources ranging from 4 to 60 percent over 1939-40, with an average of 24 percent. Only 9 institutions in this category show an estimated deficit of over 10 percent. Even this number means that 1 out of 8 face a serious financial situation. Furthermore, 48 of these institutions are still receiving income from military programs providing up to 10 percent of their current income, indicating that they, too, will face more difficult financial problems when such programs are withdrawn.
6. Junior colleges.-The war has caused a decrease in enrollment in junior colleges comparable to that in 4-year colleges. In addition to the 90 which have already closed their doors, 1 out of every 4 reporting estimates a deficit for 1944-45 of 10 percent or more.
Reports from eight privately administered institutions for men reveal that two of the eight estimate deficits for the year 1944-45 of from 16 to 27 percent, while the other six report balanced budgets. Budgets were balanced partly through reduction in faculty personnel, but the greatest single factor was an increase in the rate of student. fees.
Of 37 privately administered coeducational junior colleges, 27 report balanced budgets and the other 10 deficits. Five of them estimating deficits of 10 percent or over and one as high as 56 percent. Here again, reduction of faculty personnel by as much as 50 percent and increased rate of fees made possible balanced budgets or aided in reducing deficits.
In a study made of 63 publicly administered coeducational junior colleges, 25 of these report deficits from 2 to 40 percent, 17 of the 25 estimating deficits of over 10 percent. Most of the institutions showing balanced budgets could do so only because of income from public funds. Some were unable to balance their budgets even with this support and despite the fact that in many cases State or local appropriations were increased considerably over what they were in 1939–40.
7. Teachers colleges.-A study of 119 teachers colleges indicates that their financial condition is less serious than that of any other category of institution except the women's colleges. Enrollment has decreased comparably in these institutions; but the fact that they are less dependent upon income from student fees plus the fact that appropriations from State funds have increased have made it possible for 91 to show balanced budgets.