This issue of Trusteeship focuses on the human side on the current economic crisis. David Breneman's cover article explores how hard times may influence the behavior of students, staff, and faculty. Student aid and access and risk assessment during the recession are also. In addition, the topics of moving away from printed board materials and legal pitfalls in overseas ventures are examined.
By now, rivers of ink have been spilled documenting the financial and economic crisis afflicting the United States and much of the globe. While the causes are still being debated, and attempted cures applied experimentally, no one at this writing can be certain when things will get back to "normal," whatever that elusive concept means. While numerous articles have examined the impact on higher-education finance of credit and liquidity problems, falling endowment values, and reduced state appropriations, what these economic events mean for students, staff, and faculty has not been traced as thoroughly. Administrators and boards of trustees should find it useful to consider how hard times may influence the behavior of those within higher education in the coming months and possibly years. While necessarily speculative, this essay explores the human side of this economic whirlwind.
Sandy Baum and Michael McPherson
Most economists expect the current economic downturn to be one of the most severe since World War II. It is certainly big enough to have changed dramatically the operation of the nation's financial institutions and to have had significant effects on the behavior of consumers, businesses, and governments. It would be remarkable if it did not have a substantial impact on the operations of colleges and universities as well.
The lessons Tulane University learned from Hurricane Katrina almost four years ago are proving valuable as we--like other universities around the country--cope with the current U.S. economic downturn.
"The fish," a proverb says, "is the last to see the water." Universities in this country are hardly novices in international initiatives, yet overseas projects today, although enticing, often seem novel to them, long experience notwithstanding.
Marc Schaeffer and Merrill Schwartz
See if this sounds remotely familiar. As a board member of a university and as a business executive, balancing your work, board responsibilities, and other business obligations is an ongoing high-wire act. You feel strongly about your commitment as a trustee to be fully prepared for each board and committee meeting, but getting the necessary materials in a timely and efficient fashion has become a growing problem. The university staff does its best to time the arrival of these materials to the right city, but sometimes things just don't happen as intended. Even when they do, you are forced to lug that big binder that won't fit in your luggage or briefcase through the airport and onto the plane.
Let's take stock of where things stand. The now-recognized recession, which is already deep and will quite likely be lengthy, is ravaging endowments, negatively affecting available assets, creating uncertainties about enrollment, tightening available credit, and affecting annual fund-raising efforts. Although many institutional leaders may have experienced the severe recessions of the early 1980s and 1990s, they and their institutions are being challenged today in ways that weren't contemplated during those earlier downturns.
The mantra for good boards is to get every trustee as involved as possible, to tap their particular talents and willingness to serve in ways that benefit the college and breed commitment. From commitment comes the work, wisdom, and wealth a college needs.
Most institutions already have policies, processes, and regular training programs to address student and other types of sexual harassment. Recent court decisions, however, signal an expansion of expectations regarding the institution's role in anticipating and responding to sexual harassment. An institution is at even greater risk when its internal process for handling complaints is unclear or sluggish. In an article just published by the National Association of College and University Attorneys, Professor Barbara Lee, an expert on college law at Rutgers University, correctly urges more attention to these issues.
Before the enactment of the Student Loan Reform Act (SLRA) in 1993, the main financing mechanism for federal educational loans was government- guaranteed private lending. Under the guaranteed student loan program--renamed the Federal Family Education Loan Program (FFELP) in 1992--the federal government facilitated private lending by assuming the risk of orrower-default, guaranteeing a minimum yield to lenders and protecting them from interest-rate fluctuations. Because of changes in federal accounting procedures in 1990, an apples-to-apples comparison of direct versus guaranteed student loans was possible in 1993 and revealed federal direct lending to be vastly less expensive than the complex, inefficient, and over-subsidized FFELP.
Are the days gone when private-sector involvement in the student-loan industry is either needed or of benefit to anyone? The government should make and service student loans, some say, and the system would be simpler, more ethical, and cheaper.
These are the most troubling and challenging times that today's higher education leaders have ever seen. Families feel that they cannot afford the cost of higher education. Endowments are down and fundraising, too. Students and institutions are finding it difficult to borrow money.
In today's competitive world of higher education, in which seemingly no state budgets are at the levels appropriate for a nation that prides itself on valuing higher education, governing boards increasingly are seeking "entrepreneurial" presidents to diversify revenue streams and otherwise shake up traditional ways of doing business.
The Post-9/11 Veterans Educational Assistance Act of 2008 may provide up to 2 million men and women who have served on active duty since September 2001 the opportunity of a college education.
