NEAL CONAN, host:
This is Talk of the Nation. I'm Neal Conan in Washington. For high school seniors about to graduate and students already in college, the recession has changed the already difficult financial calculus of higher education. Tuition is up; student loans are harder to get; many - maybe most - colleges will not be able to offer as much financial aid. Mom and dad may be struggling themselves. And the situation is just as grim from the educators' point of view. Charitable contributions are down, endowments dwindle, state and county support will be cut, costs are up.
Later, we'll take you inside a rehabilitation program for Islamic militants based in Saudi Arabia. Over 20 graduates of that program rejoined terrorist groups, including al-Qaeda. But first, your colleges in a recession. If you're on the staff or the faculty at a university or community college, how is your college adjusting? Tell us your story: 800-989-8255. Email us, firstname.lastname@example.org. You can also join the conversation on our blog at npr.org/blogofthenation.
We begin with Ronald Liebowitz. He's president of Middlebury College in Vermont and joins us from a studio there. Nice to have you on the program today.
Dr. RONALD LIEBOWITZ (President, Middlebury College, Vermont): Hi, Neal.
CONAN: And I know that you've had to announce some unfortunate effects from, well, I guess it's loss of charitable contributions, it's the endowment as the Dow Jones Industrial Average dwindles?
Dr. LIEBOWITZ: It's that. It's those two things, and it's also comprehensive fee as well - not being able to raise the comprehensive fee. All three of our major revenue streams appear to be down from our financial model, and so we have to make adjustments.
CONAN: And how much are you projecting you're going to be down this year?
Dr. LIEBOWITZ: Well, we're looking at an overall budget deficit over the next two to three years of $20 million, and of course, the sooner we address the budget shortfalls, the less it compounds over the next two years. So, we have a goal over the next year, 15 months, to reduce the budget by about $11 million, and then another $9 million thereafter.
CONAN: And how are you going to do that?
Dr. LIEBOWITZ: Well, we started first by freezing staff positions, by freezing salaries, except for those employees of the college who earn less than $50,000, by stopping all facilities projects and making cuts around program. We began with a 5 percent reduction - not across the board, but an overall 5 percent reduction on non-salary, non-wage, and we've gone from there. We're about $10.5 million, $11 million in.
CONAN: And I understand you took a pay cut, too?
Dr. LIEBOWITZ: I did. My whole presidents' staff volunteered to take a pay cut. The deans took 2 and a half percent, the vice presidents took 5 percent. I took 10 percent. This would be the second year that the vice presidents and presidents froze or took a pay cut.
CONAN: We're talking with Ron Liebowitz, the president of Middlebury College, and at this first part of the conversation, we want to hear from educators, from staff and administrators at colleges and universities, how is your college adjusting? 800-989-8255; email, email@example.com. And Ron Liebowitz, you expecting to make any layoffs?
Dr. LIEBOWITZ: Of course, we're not right now. It's what we're calling the last lever or last opportunity. We're trying to do all we can to prevent that because of course, we value our staff, we value our faculty, and that's the last thing we want to do.
CONAN: But you might have to do it?
Dr. LIEBOWITZ: Well, the reality is, we don't see the bottom of this economic downturn, and I wish I could say that there will be no layoffs, but the truth is, if I saw light at the end of the tunnel and we knew we were coming out of this recession, I'd be more confident about that.
CONAN: Stay with us, if you would. Claudio Sanchez, NPR education reporter, is also with us here in Studio 3A in Washington. Nice to have you back on the program.
CLAUDIO SANCHEZ: Good to be here, Neal.
CONAN: And the problems that Ron Liebowitz is describing at Middlebury College, well, they seem to be, in somewhat varied terms, the problems that an awful lot of colleges and universities are having right now.
SANCHEZ: And actually, other states are faring much, much worse. I'm not saying that Vermont's problems aren't that dire, but if you hear about the shortfalls in California - $42 billion there - and the community college and both the state as well as university system there grappling with really huge cuts down the road. But you're also hearing it in Arizona, Nevada - I mean, in states where - for the last few years anyway - there's been at least some increase in tuition, problems all around, but nothing like this ever.
CONAN: And just as we're coming on the air, news out of Dartmouth College that they're increasing tuition by 2 percent to raise the cost of a year - admittedly, this is an elite institution but nevertheless - $50,000 a year.
SANCHEZ: Exactly. And of course, the problem right now is two-pronged. On the one hand, you have families and students scrambling for money because lenders have pulled out, because it's much harder to get credit or student loans, even those that are federally subsidized. But now you have colleges and universities scrambling to deal with the surge of students while staving off budget cuts.
CONAN: And I wanted to ask Ron Liebowitz - and I don't know the situation at Middlebury College, but nevertheless, there were an awful lot of institutions that seemed to be doing well 10, 15 years ago. Endowments were providing steady streams of income. Donors were contributing money that enabled people to open new kinds of buildings - performing arts centers, things like that. Nevertheless, in this time, as it comes around, those are fixed costs, and are your operating costs up over what you've done in the past 10 or 15 years?
Dr. LIEBOWITZ: Yes. We've been one of those colleges that have improved our infrastructure quite dramatically. I would say we were lucky in that we started this earlier than other institutions, so that we more or less finished our infrastructure build-out about three or four or five years ago. We haven't done major, major construction since then. At the same time, our debt is there, and so we have debt to pay off. And that looms as an ongoing cost each year.
CONAN: And that's something you've got to calculate in. There's no way to escape it.
Dr. LIEBOWITZ: It certainly is. It's about $14 or $15 million a year for Middlebury.
CONAN: Let's see if we get some callers in on the conversation - 800-989-8255; email us, firstname.lastname@example.org. Jenna's on the line from Fort Collins in Colorado.
JENNA (Caller): Hi. I just wanted to make a comment about how, you know, what's going on with the colleges impacts the economy in general and me personally. I'm an adjunct professor at Colorado State, and I've been an adjunct at universities in Colorado for 10 years and have always been able to make ends meet and find classes to teach.
CONAN: Adjunct means you're not on the tenure track?
JENNA: Correct. You're a temporary employee from semester to semester. However, I've been continuously employed for the last 10 years. And I just had a discussion with our department chair, and he said that he's been asked to cut his budget, and the only thing he has left to cut is temporary faculty. So, I'm looking at my fall semester, you know, anticipating the classes that I would typically teach but also having to anticipate being unemployed, and so therefore, all of my economic decisions are based on being unemployed in the fall.
CONAN: And is this affecting other people in similar kinds of situations that you know, Jenna?
JENNA: Yes, all of the adjunct faculty that I teach with - which, if you're in the university system, you understand is the majority of the college instructors on the books - are being told that they may or may not have employment come fall semester. And those decisions won't be made until June or July with the fiscal year.
CONAN: So, it's a little hard to plan your future, isn't it?
(Soundbite of laughter)
CONAN: Jenna, good luck to you.
JENNA: Thank you.
CONAN: Bye-bye. Let's see if we can talk now with Jennifer, Jennifer with us from American Falls in Idaho.
JENNIFER (Caller): Hello.
CONAN: Hi, Jennifer.
JENNIFER: I'm in the same situation as the former caller. I was an adjunct lecturer at Idaho State University part time, and not all of our adjunct lecturers have been let go. We've kept all the full-timers, but everyone who was working part time has now been let go.
CONAN: And does that include you?
CONAN: And what are you doing now?
JENNIFER: I am working with a federal grant in our school district actually - the GEAR UP grant - helping students go to college.
(Soundbite of laughter)
CONAN: Helping students go to college. Well, good luck with that. As you look ahead to the future, what do you think, Jennifer, is going to be the effect of the fact that people like you and like Jenna, who just called us a moment ago, aren't going to be there?
JENNIFER: Well, that's what I'm wondering. We'll all have to find other employment and someday, I think there will be a vacuum and a need for adjunct lecturers again. So, maybe some people will wait it out, or maybe the students I'm sending to college will take those positions.
CONAN: Thanks very much, Jennifer. We wish you the best of luck.
JENNIFER: Thank you.
CONAN: And Ron Liebowitz, what - as you look at the reductions that you're going to have to be making on your campus, what do you think is going to be the overall effect on the quality of education and the quality of life for students there?
Dr. LIEBOWITZ: Well, our goal, of course, is to maintain the quality of the academic program, and to really cut on programs that have grown over the good times - the good financial times of the last 10 or 15 years - that really don't hit at the academic core mission of this liberal arts college. So, we're hoping that the overall impact will not be great. We're looking at reducing hours for some of the services. And when I meet with students and they ask, what is it that they can do most to help the situation, I'm quite honest in saying that they have to reduce their expectations, in terms of some of the services that we offer them in this 24/7 environment of a residential, liberal arts college. So, we're hoping that the overall impact on the academic quality is really not noticeable.
CONAN: Not their expectations of their comparative literature courses, but expectations about stuff around the dorms, that sort of thing?
Dr. LIEBOWITZ: Exactly. The academic program thus far has been protected, and that's what we seek to do. And so therefore, we're not talking about changing, for example, our student-faculty ratio right now. That's something that we're very careful about. The class sizes, we're careful to retain because they're small, and that's what the education here is all about. And so, we're looking more at the outside-the-classroom programs and activities.
CONAN: Claudio, on the broader front, though, you're seeing spiraling tuition costs when people are making less money. Is this - there was a survey out - I think it was published last week - that showed more and more Americans believe that a college education is the ticket to a good job and a good life in this country, and more and more Americans now believe that a college education is beyond their means.
SANCHEZ: That's true, Neal. Although, I've got to say that prior to that, in fact last - late last year - and you can only, you know - I mean, the responsibility for parents to save money for college has always been very important. But there are surveys now that show that more and more parents are saving less, on average, no more than $5,000 per student, which doesn't get you anything, literally. So, there's a lot of blame to go around. In fact, I find that the empathy for professors or students who are really struggling is - can only go so far. Remember that we've gone through a period where, you know, Congress and all kinds of folks have said that, you know, higher education is wasteful, that there isn't enough efficiency in the system, that you're paying administrators too much money.
I mean, there's a backdrop to this gloom and doom that we're hearing about our education that doesn't help higher education make its case here in Washington. There's billions of dollars, for example, in the stimulus bill that is stuck in Congress, especially in the Senate because, you know, some people feel that colleges could do a better job with less money. And so, there's this groundswell of opposition to, well, should we give colleges that $7 billion that they want for infrastructure and for, you know, green technology on their campuses? Yes, many people think that's a good investment. But at what point are we going to start really saving or becoming more efficient in higher education, is the lingering question out there.
CONAN: We're talking with NPR education correspondent Claudio Sanchez and with Ron Liebowitz, who's the president of Middlebury College, about your college on a recession, 800-989-8255, email email@example.com. Stay with us. I'm Neal Conan. Talk of the Nation, NPR News.
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CONAN: This is Talk of the Nation. I'm Neal Conan in Washington. Just like much of the corporate world, many colleges and universities are being hammered by the recession. If you're staff or faculty at a university or community college, how is your school adjusting? Part of our occasional series on life in a recession: your college in a recession - give us a call, 800-989-8255; email us, firstname.lastname@example.org. You can comment on our blog at npr.org/blogofthenation. Our guests are Claudio Sanchez, NPR national educational correspondent, and Ron Liebowitz, the president of Middlebury College, a liberal arts college in Vermont. Let's see if we can get another caller on the line. And this is Chris, Chris with us from Saint Louis.
CHRIS (Caller): Hey, thanks for taking my call.
CONAN: Go ahead, please.
CHRIS: I'm a professor, and I worry that this current economic crisis is going to lead to some so-called educational leaders taking steps to kind of hasten the process that has been happening for the last couple decades of making the educational system more like a kind of cheap labor model, like you would see at a Wal-Mart or something like that, with more online classes, fewer contact hours, more expendable faculty members, as we just heard from a couple callers ago. And, you know, these are goals that certain people have had in higher education for a long time, and I worry that this current crisis will be used by these folks as an opportunity. And Gordon Gee, the president of Ohio State, had a couple interesting thoughts on this subject, I guess, within the last few days. So, I'd just like to hear what the president and your other guest there think of this.
CONAN: Claudio, why don't we start with you?
SANCHEZ: Well, you know, Gordon Gee, who in fact - I recall several years ago, when he showed up to Congress to ask for more federal aid for colleges, he was blasted the way the bankers were because he had flown in on a Learjet of some sort. But, you know, I think the point is well taken. The Chronicle of Higher Ed had some interesting pieces about how, in fact, some universities, some colleges, are lowering tuition on the condition that students study or take online courses with little or no advice from professors. In other words, you know, just a stripped-down degree program that takes out professors or, you know, quality education out of the formula.
So, I think that that trend, I would agree, is happening. Whether it's going to accelerate under the current situation, though, is unclear in my view, because I think the bottom line is that parents who are sending their - or are paying a lot to send their kids to college - at some point, are going to raise or become a political pebble in people's feet because these are the folks who are paying through the nose for a good college education, and they'll be damned if they're going to be shortchanged on that. And I think we're beginning to hear the rumblings of that, which is unheard of, because, you know, we don't hear about college parents being organized the way the PTA is, for example.
But ultimately, I also think that parents are going to - or students are going to vote with their feet. You know, we're seeing an enormous surge in community colleges of students who would've otherwise gone to four-year institutions, but they just couldn't make ends meet. Now, that surge is creating an enormous amount of pressure on community colleges, which are also being cut. State budget cuts are targeting them, in many cases. But I think we're going to begin to see a much larger conversation about what a quality education is, who's about to - who can or should deliver it, and whether or not institutions can and should be held accountable for the kind of services they're providing.
CONAN: And Ron Liebowitz, ask you to weigh in on that, too.
Dr. LIEBOWITZ: Well, I think the kind of changes that the caller was mentioning would not happen so easily or quickly at a place like Middlebury, where, of course, the close student-faculty collaboration and small classes and so forth - that model is really central to our existence. What I do think, however, is that we have to recognize that the so-called business model - pardon the expression - of how we've operated over the course of the last three, four, five decades is certainly in question. And I believe that institutions that have the ability and advantage need to perhaps find new revenue streams - and again, apologies for the business analogy there.
But in any case, I see relying upon comprehensive fee - that's $50,000 for private institutions like Middlebury - relying on endowment growth that we seen in the last 10, 15 years is unreasonable, and relying upon gifts from folks who might not have the resources any longer really suggests that we have to find alternative ways. And so, while I don't believe that an education at Middlebury is going to start looking as the caller suggested, I think we have to be smart and have to look for alternative revenue streams to, of course, supplement our traditional revenue streams.
SANCHEZ: I think there's also another issue here, which is when we look at higher education as a business, this whole question of endowments and where they're headed is the other big shoe that is about to drop in higher education, I think. I mean, last year, we saw, according to some studies that were done, a 24-percent decrease in college endowments, namely for two reasons -because these institutions were caught, just like all other investors, you know, with having invested in Wall Street and the bottom falling out. And also because philanthropy or, you know, people who give to their institutions, has just also almost stopped to a screeching halt. And I think that the repercussions of that are going to be seen later in the year and beyond. We're going to, I think, see a wholesale change in who gives to colleges and universities. And remember that on average, the typical university or college public, especially private institutions that rely on endowments more, use about 5 percent of those endowments for operating expenses. And that's a good piece of money.
CONAN: Chris, let's get back to you in Saint Louis. At the school where you are a professor, do you see that business model taking hold?
CHRIS: Well, I used to be in the California state system, and that was a real thing motivating, I think, the leaders out there. It's - you know, I think it's everywhere, to an extent. I mean, even at a place like Middlebury, which does have such a good reputation for, you know, the close student-faculty contact and so on, that, you know, there's these incentives. The president talked about a new revenue source, and I agree. But what's that revenue source going to be? I mean, you kind of have private philanthropy. You have public aid. You have tuition. I'm not sure, you know, what the other pot of money is.
So, if you can't find that other pot of money, I think it comes down to, you're going to have to probably - or at least, this is what it - seems to be happening - you're going to have to make some cuts, is how people are viewing it. And that is going to mean - I mean, it's a labor-intensive field, and the way to that - the biggest cost is labor. And you know, online courses aren't bad in all circumstances but, you know, for the vast majority of undergraduate courses and students, I think that they're not anywhere near as effective as, you know, classroom instruction.
So, I just - I'm really concerned at that - you know, because there's not another pot of money just kind of out there waiting to be found, that what's going to happen is there's going to be more and more of a desire to cut costs, you know, in terms of the faculty teaching the students because, you know, that's where the costs are at an undergraduate university, for sure.
CONAN: Chris, thanks very much to for the call. Appreciate it.
CHRIS: OK. Thank you.
CONAN: Email from Patty in Merced, California. It's important to note that faculty at research universities are in a nearly perfect storm for the past several years - the major government funding agencies that had budget problems, so that grant success is now only near 10 percent. Meanwhile, as you note, funding from all other sources, including endowments, has also been hard hit. People need to realize that faculty at research universities train one of our most precious resources - the next generation of scientists. And that training does not happen in the classroom. It happens in a fully equipped lab. There are fewer and fewer of those in the U.S. these days. At our university, the hiring of staff has been frozen, and the hiring of faculty severely restricted. The morale of scientists is, indeed, quite low these days. Let's go now to Anne, Anne with us from Oakland, California.
ANNE (Caller): Hi. I'm in a unique position because I'm an instructor on staff at Stanford. But I'm also doing additional graduate work in teaching at San Francisco State, where I'm a student. And I just wanted to point out the difference between the burdens being placed upon the students at both institutions. At Stanford, we are having to make some cuts and do projections to reduce each department by a certain percent each year, but it's not necessarily going to happen that those cuts will go into place.
And the administration has been very transparent about saying that they themselves are taking 10-percent pay cuts, and that financial aide will not be impacted, and research will continue to be funded. But at San Francisco State, where I'm a student, they capped enrollment, they've cut 500 classes. Students who are freshmen are unable to get the classes they need. They'll have to go to college for a longer time in order to get the requirements that they need to graduate. And so, yes, it is a burden. I'm a parent, and I'm saving for my own son's education and, you know, paying $50,000 a year is terrifying. But, at the same point, I feel that if students at private research institutions, I think, are still getting the better end of the stick than the students who are most in need of a college degree. And those are the ones at the community college and the state schools.
CONAN: Claudio, you were talking about the dire situation in California a moment ago.
SANCHEZ: That call from Anne jibes exactly with what the College Board has said in - more recently, that low-income families have been hit particularly hard, with college costing families - low-income families 55 percent of their earnings. That's over half of their earnings, up from 39 percent in the year 2000. I mean, that gives us a sense of just how big of a chunk of money it requires families, you know, low-income families.
But I think the other issue here is - as well is, you know, even though much of the - or at least some of the federal aid for low-income students is up historically high, it only pays for a fraction of what it costs to go a San Francisco State or even to a community college. I mean, the average tuition at a state college - a state school these days is about $7,000. That doesn't include room and board, that's just tuition and fees. If you're looking at room and board, we're looking at that twice that. So, you know, this is money - and what I find in reporting about, you know, students that are really struggling to pay for college and their families, I find that sometimes they're on - they're teetering almost. I mean, it's only a few hundred dollars that makes a difference between the kind of school they go to, whether it's a four-year state institution or a two-year college, or not going to school at all. There's just that slow or smallest margin…
CONAN: Tiny margin. Yeah.
CONAN: Anne, thanks very much for the call, and we wish you and your son the best of luck.
ANNE: Thank you very much.
CONAN: Bye-bye. And Claudio, another part of this is every time people are running for elective office - this last presidential campaign - you hear people saying, and we should make it possible for every student who wants to, to go get a college education. Any indication that - well, there's a financial crisis going on, but any indication that with the health-care problem, the financial problem and all these other things, that there's going to be any follow-through on that?
SANCHEZ: It's all lip service at this point. I mean, I don't see, and I certainly don't hear, in this whole discussion of the stimulus bill any real thrust to at least preserve that promise that the federal government made 35 years ago or more, where it said, any eligible student and its family should be able to go to college, should be able to pay for college. We're going to make it happen. We're going to make up for the money that that family can't spend out of pocket.
Well, that promise has been, you know, dwindling for the last 10, 15 years. And although, you know, way before this economic crisis hit, Congress was always debating, you know, how much more to raise the Pell grant, how much more money they should make available for subsidized loans and unsubsidized loans for parents to be able to borrow. Now, under these circumstances, I mean, parents, even if they have reasonably good credit, are not getting any money whatsoever. That amount - I mean, there are 145 private lenders that have pulled out since last summer - entirely. And in the meantime, it's getting a lot harder to borrow for college. If you have even a little glitch in your credit history, you're out. You're not even considered for a loan these days. And again, that's unheard of. That's never happened before.
CONAN: Claudio Sanchez, NPR's national education correspondent. Also with us, Ron Liebowitz, the president of Middlebury College. We're talking about your college in a recession. You're listening to Talk of the Nation from NPR News. And let's get Marianna on the line, Marianna with us from Tuscon, Arizona.
MARIANNA (Caller): Hello.
MARIANNA: So, my comment was, you know, as we are the Pima Community College, I'm a full-time professor there. And you know, we do have - we're filling a shortfall of about a million and a half dollars for this fiscal year. But a lot of the money for our community college comes from bonds, from taxes, from homes. And the shortfall that is expected for next year, given the fact that home prices continue to go down - it's going to be enormous. And this year so far, from what we've heard from the chancellor of our college, we are minimizing any impact on students, but you can only do so much without - you know, before the student is directly affected.
CONAN: And so, this is going to be a problem, not so much next semester, but the semester after that?
MARIANNA: That's right, because basically what we're seeing right now with home prices is going to be affecting the 2009-2010 academic year, and 2010-2011. So…
CONAN: And are a lot of community colleges - is their funding sourced this way?
MARIANNA: I believe so.
CONAN: Yeah. Claudio?
SANCHEZ: Well, you know, we know now that 46 states have cut or will have cut - by the spring, will have cut their education budgets, and depending on what state we're talking about - I mean, states fund higher education to varying degrees. I don't know the specific case of Arizona, but if the trend is, you know, budget cuts till the - as far the eye can see, I'm not surprised that you're looking at one and a half million dollar deficits or more.
MARIANNA: Yeah. And that's straight from the budget from the state government. But it is not accounting the money that is not going to come, as it would have normally, from real estate taxes.
SANCHEZ: Yeah, the community college system that lobbies Washington for money and so forth has always been treated as a stepchild of higher education. And ironically, you know, at a time when more and more people are having to settle for - and I don't mean to say that in a disparaging way - but settle for community college two-year programs because they couldn't afford to go to four-year institutions or pay for it, you're beginning to see a real huge squeeze on community colleges. I think California's a good example of that. But I think you're hearing it all around.
MARIANNA: Well, and let me add that community colleges add a whole different spectrum. We offer remedial courses for people that - we attend to the part of the population that might need remedial courses to be able to successfully finish the first two years. And we offer smaller classes that a four-year institution or research institution might have a class of 300, and we can offer a class of 30 to a professor that has a master's degree. So, we actually are the best buck for the money. There has been research that has showed that for every $2 that the government has spent on a community college - sorry, for every $1, $2 is what the community gets back.
SANCHEZ: Yeah. Average tuition is about $2,400 these days at a community college.
CONAN: Marianna, thanks for the call, and good luck to you. We want to get back to Ron Liebowitz at Middlebury College. We just have a few seconds left. And as you look ahead to - you've been hearing a lot of these problems, I'm sure they don't come as a surprise to you, either. Nevertheless, as you look ahead to the future of your school - well, you talked about the next two, three years - five years down the road, do things look bleak for you?
Dr. LIEBOWITZ: No, I don't think they loo k bleak. As I said before, there might be changes - there will be changes, of course, but I'm also optimistic because I think we will find a way for a fourth-wave revenue source. We're strong in the languages, and there are many learners beyond the 18- to 22-year-old cohort. And we might want to start tapping into the older learners and also the younger learners, as we've done - last summer. So, I'm optimistic. There might not be as many luxuries, there might not be as many frills, but I think the academic core of institutions like Middlebury could remain intact.
CONAN: Ron Liebowitz, thank you very much for your time today, and we wish you the best of luck.
Dr. LIEBOWITZ: Thank you.
CONAN: Ronald Liebowitz is president of Middlebury College and he joined us from a studio on the campus there. Our thanks as well to NPR's national education correspondent, Claudio Sanchez, with us here in Studio 3A. Claudio, thanks for your time.
SANCHEZ: You're welcome.
CONAN: When we come back, we're going to be talking about a dozen graduates of a Saudi program to rehabilitate Jihadists, who fell back in with al-Qaeda. Can you really reshape the beliefs of terrorist? Stay with us. It's the Talk of the Nation from NPR News.
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