Almost a third of the nation’s colleges and universities are experiencing financial shortfalls from decreasing enrollment and regional institutions are among the most vulnerable, according to one recent report.
The Moody’s Investors Service analysis found that 17 percent of colleges and universities will see a decline in tuition revenue and 16 percent will see tuition revenue growth at less than the rate of inflation this year, according to published reports. Reflecting the national trend, JSU’s bottom line took a hit from declining enrollment this fall and in response the university reduced its budget by $650,000. Officials hope, however, enrollment will rebound next year.
“We’re taking everything into consideration,” said Angie Finley, a JSU spokeswoman. “We don’t know what the future holds.”
Experts say state flagship and land-grant institutions, among the oldest and most established universities in any state, are less likely to experience financial setbacks from the trend. Those universities have more revenue sources, including funding for research and donations collected in large-scale capital campaigns.
In contrast, regional universities such as JSU have fewer revenue sources and are particularly likely to lose money when enrollment goes down because they are more dependant upon tuition revenue.
“It’s impacting them less,” said Darrell Morrison, president of the Southern Association of College and University Business officers. Regional institutions, he said, “are much more dependant on the student population.”
Experts who track enrollment and university finance expect the trend to persist.
“We know for a fact that this is going to be a trend,” said Ken Redd, director of research and policy analysis National Association of College and University Business Officers. According to Redd, fewer students are graduating from high school and there will be fewer college-age people in the U.S. in the coming years.
Experts say negative and positive effects of the economy are curbing college enrollment. Recent tuition increases prompted by decreasing state support, and a rising number of job openings as the economy improves, are both prompting people to seek jobs instead of education, said Morrison.
When the economy was in recession, enrollment numbers swelled. Now that it is improving those numbers are dropping, said Morrison.
He added that enrollment numbers are likely to remain lower than they were during the recession.
JSU has long had a goal of reaching an enrollment of 10,000 students. It came close in 2010 with 9,504, an all-time high for JSU.
“We have a plan to get back on track with our goal of 10,000 enrollment, and we hope to achieve that by 2017,” read an emailed statement from Finley.
Since then, the university’s numbers have fallen steadily. In 2012, 9,161 students enrolled at JSU; the year before that figure was 9,410. This year 8,693 students enrolled in JSU classes. Finley said the university is focusing on increasing enrollment by recruiting more community college transfer students, new freshmen, out-of-state students and veterans returning to civilian life after service.
Fewer students are eligible for Pell Grants, which has driven down the number of people who can find money to pay for college. The federal changes will likely affect JSU, where 93 percent of the student body in 2012-13 relied on some form of financial aid, according to the National Center for Education Statistics.
Stephen Katsinas, director of the Education Policy Center, a research group at the University of Alabama that seeks to inform policymakers in education, said in an emailed statement that enrollment declines in Alabama are the direct result of the cuts by Congress in June 2012. He said Pell Grants generated $470 million for low-income students at Alabama’s public two- and four-year colleges in fiscal year 2011.
“If Pell is cut, enrollment cuts necessarily follow,” Katsinas wrote.
At JSU, 48 percent of students received a total of more than $2.9 million in Pell Grants in 2012-13, according to the National Center for Education Statistics.
Katsinas added that enrollment is not likely to improve in Alabama unless Congress restores support to the Pell Grant program or if the state revenue increases so that the state government can add support to the Alabama Student Assistance Program, a need-based grant program funded with federal and state money.
Staff writer Laura Gaddy: 256-235-3544. On Twitter @LGaddy_Star.