Category Archives: The Market Crash of 2008

Via Business Week (which I don’t normally read), “For-Profit Colleges: Scooping Up the Stimulus.” Here’s a quote from the opening:

President Barack Obama’s stimulus package directs billions in new funding to higher education. Poised to cash in on the largesse are a group of large for-profit universities that specialize in scooping up student aid dollars. Some of the schools, known for aggressive recruiting, are increasing advertising and seeing enrollments rise.

But are these education businesses appropriate beneficiaries of fresh taxpayer generosity? For years skeptics have raised questions about the schools’ marketing tactics, graduation rates, and quality of education

I’m still unclear as to what is going to happen (or not happen) to EMU as far as the budget goes. I thought we were going to get spared because of the way the stimulus money was going to work, but then I thought I heard a radio news item just the other day about how the governor still wants to cut 3% from higher ed. Maybe I misheard that….

An alert EMUTalk.org reader sent me a link this morning to an article that could be an intriguing twist to the budgetary soap operas in higher ed in Michigan: from The Detroit News, Michigan schools spared from cuts: Federal stimulus rules prevent state from slashing funds for colleges, public schools. The opening paragraphs:

Michigan can’t slash aid to public schools and universities, as proposed in Gov. Jennifer Granholm’s budget plan for next year, because federal stimulus package rules won’t allow it, lawmakers were told Wednesday.

Gary Olson, director of the Senate Fiscal Agency, said the legislation adopted by Congress and signed this week by President Barack Obama stipulates that funding for schools and colleges must be kept whole to be eligible for federal recovery money.

That means the 3.2 percent reduction in state spending for the 15 public universities and the $59-per-pupil reduction in public school aid proposed by Granholm for the budget year that begins Oct. 1 can’t happen, Olson said.

Now, before we start popping the champagne corks, it seems that the governor’s office has a potentially different interpretation of the law.

Liz Boyd, spokeswoman for Granholm, said “it is not our interpretation” that federal recovery rules won’t allow the higher ed and per-pupil cuts. But her comments indicate only shades of semantic difference.

“The federal economic recovery money is separate from the budget,” she said. “We can make the budget decisions we need to make to balance our budget going forward, but certainly we will use the stimulus dollars to make them whole. We’re talking about making them whole, not restoring cuts.”

Plus there might be some kind of deal where EMU’s budget (and the other state supported universities) isn’t cut from the state on the condition that EMU doesn’t raise tuition, which could in itself represent a bit of a budget cut because of lost revenue. Or it could actually represent a bit of a budget increase because more students will be able to afford to enroll. Who the heck knows.

In short, this ain’t over by a long-shot.

I just heard a brief piece on Michigan Public Radio, and the “talking head” expert they had on there said that a lot of the funding to states got “stripped out” of this latest bill. This means, in the words of this budget analyst, it might be a lot harder for the Governor to keep her pledge/goal of not impacting the budgets of schools or universities. A lot of dust has to settle of course, but this little blurb wasn’t exactly good news.