HIGHER ED GETS HIT:
In the past few months what started as a banking crisis has spread through a wide array of disparate social sectors, and funding for higher education has not been immune. State budgets and school endowments have felt the effects, and the government has recently taken drastic action to ensure continued access to student loans.
On November 20 the
announced it would shortly begin buying $500 million per week of publicly guaranteed private student loans to supply liquidity to a faltering market. According to experts, unguaranteed private loans will shrink this year by roughly one-third, from $19 billion last academic year to between $12 billion and $13 bil- lion this year. To stem the collapse, Congress recently increased federal loan limits by $2,000, and with applications for federal aid up 20 percent in the first six months of this year, the move may have come just in time.
Talk of legislating a mandatory 5 per- cent endowment payout is circulating in Congress, but endowments are not what they once were.
Moody’s Investors Service
estimates they may devalue by as much as 30 percent this fiscal year.
‘s massive endowment, the largest in higher ed, has already diminished by 22 percent since the end of June, a loss of about $8 billion–and this doesn’t include losses in Harvard’s private equity or real estate holdings.
Smaller institutions are not faring any better.
, a private Iowa liberal arts school, has watched its endowment shrink by 25 percent, from $1.47 billion to around $1 billion, and tuition hikes may be in the offing. With this in mind, students have been turning to state schools, with applications at
, a New York public institution, up 50 percent.
But many of these schools are facing budget cuts. In California, Governor
has proposed cutting $65.5 million from the University of California system and $66.3 million from the California State University system. In his speech he quoted
, saying, “The things that we refuse to meet today always come back at you later on.” Given recent events, a shrinking education sector will surely be a case in point. COLE ROBERTSON
THE BLAME GAME:
It’s true–our favorite Diva of Derision,
, has her jaw wired shut for the next few weeks. But don’t worry, there are still plenty of voices out there letting us know who is to blame for this year’s economic crises, from the mortgage meltdown to Detroit’s malaise. Let’s play the blame game!
on subprime mortgages: “The real problem, we’ve been told, lay with Fannie Mae and Freddie Mac. In fact, however, ACORN is at the base of the whole mess. ACORN used CRA and Democratic sympathizers to entangle Fannie and Freddie and the entire financial system in a disastrous disregard of the most basic financial standards. And Barack Obama cut his teeth as an organizer and politician backing up ACORN’s economic madness every step of the way.” (National Review Online, October 7)