Declining state aid, hobbled endowments, and rising debt are hurting the balance sheets of colleges across America. Unfortunately the economies of their surrounding towns, which rely on schools for jobs, customers, and more, are far from immune.
The recession meant budget cuts, tuition hikes, and job cuts at colleges across the United States, but the effects go beyond the campus gates and into the local communities, reports Douglas Belkin.
He cites the example of Washington State University in Pullman, Washington. In addition to cutting 581 jobs over the past four years, state aid fell by $240 million and undergraduate tuition bumped up from $6,290 to $10,874.
As a result, "Housing prices declined and housing starts fell to a 20-year low, in part because laid-off workers moved away. Students spent less and the city's sales-tax revenue fell by 15%. In response, the city this year slashed its budget by 6%."
To overcome the financial hurdles, Bain & Co. advised: "consolidate, outsource and focus on core strengths." John Burkhardt, director of the National Forum on Higher Education for the Public Good, suggested bringing in more foreign students. With this in mind, tuition hikes might be reigned in and jobs could be saved.
FULL STORY: Tough Times for Colleges--and College Towns

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