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Twenty-eight of these institutions estimate a deficit for the current year but only 7 expect deficits of over 10 percent; 7 of the 28 are in one State, indicating that appropriations in this particular State were not increased sufficiently to offset probable losses.

Many more, if not most, institutions of this type would show serious deficits were it not for the fact that 89 of them have benefited from increased appropriations from public funds for the current year. For those institutions which received additional appropriations, the range is from 1 to 204 percent increase with an average for the group of 26 percent over the 1939–40 figure. Follow-up study.

A follow-up survey was made of 150 colleges and universities in January 1945. With the 1944-45 academic year then well under way and with a clearer picture of changes in various war programs affecting colleges and universities, college officials could make more accurate estimates of their financial condition for 1944-45 than they could make in September 1944. Also, the knowledge of the fact that military programs will be curtailed in some institutions and eliminated in most, made it possible for the officials to estimate their financial prospects for 1945--46.

From the data received in this supplementary sampling survey the following conclusions can be drawn:

1. The estimates made in September 1944, at a time of considerable optimism as to the early ending of the war with Germany, have already proved too large in regard to enrollments and hence too large in regard to income. The financial situation in most of the institutions surveved will be worse by the end of the present academic year than was estimated last September

2. Institutions expecting deficits for 1944-45 will all have deficits again in 1945-46 and in three-fourths of them the expected deficits for the later year will be larger than those for 1944–45.

3. The total number of colleges and universities expecting

deficits for 1945-46 is increasing markedly. Summary and conclusion.

It is evident, through à comparison of summary data with a breakdown analysis of the financial statements of individual institutions, that the former do not afford a full portrayal of the situation faced by colleges and universities. Too much emphasis cannot be placed upon the fact that the rather favorable financial statements of the total figures for all colleges and universities for 1943-44 were made possible by large Army, Navy, and other Government contracts operated on a cost basis for military and research programs. Other factors which are not revealed in a summary figure, because their effect is unevenly distributed among the institutions include the degree of success of emergency drives for funds; the extent of loans; withdrawal to the operational budget of unrestricted endowment and cash reserves that show as income; and the many necessary and, for the most part harmful, curtailments and financial adjustments that will be mentioned in the following section of this report.

The financial situation of many higher educational institutions has become increasingly difficult as the war has continued. Individual institutions are now faced with growing deficits-in some instances already critical. This will be true despite economies and adjustments often made at the expense of the effectiveness of the institution. Unless some action is taken, a larger number of institutions will face serious deficits for the period of the war and these deficits will increase.

Institutions of higher education are to be commended for their earnest efforts to mantain financial solvency, but for many it has been at the sacrifice of present educational effectiveness which tends to jeopardize their future services. Only when such economies and adjustments as these are clearly understood and their significance recognized is it possible to interpret properly the statistics taken from the financial statements. ADJUSTMENTS AND ECONOMIES MADE BY COLLEGES TO MEET THE

SITUATION As indicated above, in order to continue to meet pay rolls and operation costs, and thereby to be able to continue even the minimum essential educational activities, most colleges and universities have been forced to make many economies, financial adjustments, and other arrangements. The result has been that, except for a few fortunate institutions, most of them have taken steps that have led to the accumulation of a variety of deferred needs resulting in serious future bazards to continuous effective operation. Economies and personnel adjustments.

1. Many faculty members have been granted leaves of absence, frequently encouraged and arranged by college officials, for service in the armed forces, Government, and war industries. Large numbers of these bave not been replaced at all. Some who have left the institutions will remain in Government work and in private business, and others will follow new pursuits discovered under the pressure of war.

2. To retain instruction in required courses and to meet the need for accelerated programs, it has been necessary to fill vacancies on college faculties by part-time instructors and temporary appointment of persons of lesser training and teaching experience than usually required.

3. To avoid the necessity of hiring instructors to replace others that have left, many faculty members have been overburdened with assignments to teaching fields other than and in addition to their own fields of specialization.

4. In some institutions courses and curricula have been reduced to the point that opportunities for students to choose their courses or fields of study have been dangerously curtailed. Appropriations for library and health services have been reduced in many instances at a time when there is great evidence of need. Expenditures for the replacement and repair of permanent equipment and physical plaut have been reduced greatly, where not necessary for the operation of military programs, and to a point where unprecedented deferred needs have piled up.

One illustration of some of the economies referred to above is that which occurred in a large university. After carrying on two annual emergency campaigns among alumni and making other economies, such as redution of clerical staff and cutting library funds, the institution was forced to resort to an increase of 25 percent in the number of hours of teaching of all members of the faculty, to increasing the number of students in classes carried on in more than one section, and to the releasing of faculty members not on tenure whose work could be absorbed by the remaining instructors. Financial adjustments and other arrangements.

1. Reports from individual institutions show that special drives for funds from alumni and friends have been made to meet the losses incurred by the decline in enrollments owing to the war. Not all such drives can be repeated and a number of presidents raise serious questions as to how that part of the difference between income and expenditures will be met next year.

2. Unrestricted endowment funds intended either as sources of future income or to meet specific plant or equipment needs have been drawn upon in some instances directly, in many, used as collateral for loans.

3. Funds set aside over a period of years for buildings and other special needs have been used to meet current needs.

4. Some of our best-known institutions of higher education, as well as others, large and small, have been forced to borrow from banks and other sources in order to meet pay rolls as well as other costs of operation.

These various economies and adjustments that have been forced upon our institutions of higher education have built up many deferred needs and have created situations that have not only decreased greatly the capacity and ability of the colleges and universities to meet prewar levels of educational needs; but years will be required before the operating efficiency of these institutions is back to the level of effectiveness it had achieved prior to the war. Colleges and universities are seriously concerned as to where they will get the funds to enable them to take back members of their faculties granted leaves of absence to help with the war effort. Since reconversion of industry and government will probably release faculty members on leave prior to the time when any considerable number of students will return to the campus, college administrators recognize that income from student fees will prove inadequate to bring their physical plant and equipment back to pre-war levels and also to meet the commitments they have made to faculty personnel on leave. In view of these circumstances, and (1) the prospect of eventually larger demands on institutions of higher education when demobilization is well under way; (2) the rapidly growing shortage of qualified teachers, especially in the technical and scientific fields, despite the return of some now on leave; (3) the demand that will be made by government, industry, and institutions of higher education for highly trained research workers in the natural and social sciences; and, (4) the greatly increased responsibility that is expected of colleges and universities by local and regional areas as well as society as a whole to provide a far greater measure of adult education in many forms, college officials wonder whether their institutions will be even reasonably well equipped from the point of view of personnel, plant, and equipment to meet the postwar educational needs of the country.

Colleges and universities must be ready to meet the unprecedented demand made by the increase in the number of students. Existing facilities for higher education will prove inadequate for the task. The number of veterans and war workers who will go to colleges and universities will remain small during the period of high war production. When reconversion begins, and progressively in proportion to the resulting unemployment, the numbers will increase. Institutions of higher education should be maintained in such condition that they may meet financial and other contingencies.

But colleges and universities must do more than meet the need of increased numbers; they must also meet the expanding demands of our national life. Veterans and war workers whose education has been interrupted or delayed should be able to continue their education. The needs of industry, of business, and of government continuously require a larger number of college-trained men and women, persons educated not only in abstract principles, but through close contact with actual performance on the job. The expanding role of management and organized labor must be recognized. The community will more and more look to the college and university for leadership in health, recreation, and other community services. The return to the 40-hour week will make it increasingly necessary to give leadership to all groups within the community in the arts, such as, literature, music, painting, and many more, both for appreciation and for performance. The complexity of our national life and of world organization will create a demand for courses in economics, government, international relations, and many other fields.

Colleges and universities must meet these expanding needs, which are as inevitable as the increase in numbers. They must be freed from the unusual financial burdens imposed on them by the war and begin now to rebuild their faculty as well as to restore their physical facilities.

THE WAR PROGRAMS IN COLLEGES AND UNIVERSITIES

On January 3 and 4, 1942, approximately 4 weeks after Pearl Harbor was attacked, more than 1,000 college and university presidents met in conference at Baltimore and offered the services of their institutions to the Government. They urged that a unified program be developed through which their personnel and physical plants could be utilized to the full in the national interest.

Active participation in the war had already begun, and under the circumstances no unified plan was formulated despite earnest effort to develop such a program. Instead the programs that were developed were fragmentary and they were concentrated, for the most part, in the larger institutions. Very few of the 600 junior colleges and 225 teachers colleges were utilized in any of the special programs; a small number of other institutions, which were allotted training and research programs, had a student body and income larger than ever before in their history. As previously pointed out, the war has thus affected the colleges and universities in varying degree due, largely, to the unequal allotment of war programs and to their concentration in a relatively small number of institutions. Many of the programs, due to the exigencies of war and the nature of the training required by the armed forces, were in such a state of constant flux that few institutions, even those with large military assignments, could plan with assurance or have a sense of security through service. Another factor was the unequal effect, depending upon the proportion of male students to the total enrollment, of selective service.

The following analysis of the war programs in colleges and universities is based upon official data and statements from Government agencies of file with the House Committee on Education. Student deferment.

The Selective Service and Training Act of 1940 included provision for deferment to July 1, 1941, of all students then in college. În anticipation of the expiration of this provision, Selective Service, on March 7, 1941, issued regulations providing consideration for deferment of individuals who were engaged in essential occupations and those in training or preparation therefor. On March 16, 1942, a definite policy was announced by National Headquarters Selective Service whereby students preparing for essential fields were to be considered for deferment by local boards. As the quotas for induction increased, these regulations were changed and a decreasing number of students were deferred. On July 1, 1943, all student deferment, with a few exceptions, was abolished. These exceptions included those who had “entered upon instruction” by this date in schools of medicine, dentistry, veterinary medicine, and osteopathy such deferment to continue until graduation. Theological students will continue to be deferred as provided in the original act and special arrangements have been made for deferment of certain pretheological students. The total number of students now in colleges through deferment is approximately 16,000 and this number will decrease with each graduating class.

Quotas for induction declined from their peak of more than 200,000 per month in the summer of 1943 to a low of 60,000 in December 1944 when Selective Service announced new quotas of 120,000 per month effective immediately. This is more than the number of physically qualified males who reach the age of 18 each month. Under present policies, colleges and universities, therefore, cannot anticipate any relaxation of present deferment policies or any consequent increase from this source in their student enrollment, at least until after final victory and the total cessation of hostilities. If peacetime conscription of 18-year-olds is initiated prior to the end of the war, it will extend for another calendar year the time during which such men will be unable to enroll in college.

Current discussion of "national-service legislation" is already causing young men classified as physically disqualified for military service to leave colleges and universities for work in war industries. Should such legislation be passed few male students will be left in higher educational institutions. Army and navy college training programs.

Soon after Pearl Harbor was attacked, both the War and Navy Departments announced the establishment of an Enlisted Reserve Corps for students in colleges and universities. Those enrolling in the Corps were placed on inactive duty to complete their college education but were subject to call if the exigencies of war made it necessary. In September 1942 the demand for men was so acute that within the next 3 months the War Department ordered all, with very few exceptions, of those in the Reserve Corps to active duty. The Navy continued their reservists on inactive duty until they were transferred to the “V” college programs.

The Army college training programs were initiated in the spring of 1943 and reached their peak in December of that year. At that time

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