At Community Colleges, Great Expectations Don't Come With Dollars

Photo by Bill Pugliano, Getty Images
"Community colleges are an essential part of our recovery in the present, and our prosperity in the future," President Obama said in a speech at Macomb Community College in Michigan. Obama is one of the first presidents to put community colleges on the national agenda.

When President Obama visited Michigan's Macomb Community College last summer to announce his American Graduation Initiative, he raised hopes on the campuses of community colleges around the country. Community colleges, he said, would be the key to both increasing college graduation rates and training workers for occupations that would help bring the economy back to its feet. Obama pledged $12 billion over the next decade to improve job training programs, upgrade community college facilities and develop online courses.

Those ambitions have been significantly scaled back. In Congress, the graduation initiative fell out of a bill to remake the student loan industry. What ultimately passed for community colleges — $2 billion in federal funds to go out in the form of competitive grants between 2011 and 2014 — was seen by many as something of a consolation prize.

For community colleges, it was only the latest bit of bad fiscal news. The lousy economy has wedged community colleges between two sides of a vise: On one side, financial support from state and local governments is declining, and on the other side, enrollments are soaring as more middle-class families find they can't afford four-year tuition and laid-off workers go back to school to retrain. Jim Jacobs, the president of Macomb Community College who hosted Obama last summer, now says that the community college financial model is broken.

And that's in Michigan, where the state hasn't cut community college budgets the way other states have. In California, home of the nation's largest community college system, an 8 percent budget cut for this academic year amounted to the equivalent of the cost of educating 200,000 students. With enrollments growing, some 140,000 students were turned away; at some colleges students have had to camp out overnight in order to get into certain classes, and already there are wait lists in the thousands for the fall semester. Likewise, in Texas, legislators have asked community colleges to submit budget cuts of 10 percent for the next two years, on top of 5 percent cuts enacted last year. At the same time, community colleges in Texas have seen enrollments shoot up by 12 percent.

At a time when unemployment remains at stubbornly high levels, nobody doubts that community colleges are crucial to the nation's economic future. Their role in rebooting the workforce, especially in economically tumultuous times, is well understood. In Pennsylvania, community colleges retrained laid-off steel workers for jobs in the education and health care industries. And community colleges helped lead parts of North Carolina out from an economy based on tobacco and textiles to one grounded in biotechnology. The question is whether community colleges will have the resources to make a similar kind of impact this time around.

Tuition's toll

In most states, community colleges are funded from three main sources. Tuition is one source the colleges usually have some control over. Property tax revenue and state appropriations they do not. Lately, with real estate values plummeting and state budgets reeling, many schools are seeing their funding vanish at rates that tuition hikes alone could never cover.

So the colleges have had to lengthen their list of coping strategies. Some are reducing the number of courses they offer, cutting summer sessions, eliminating programs and capping enrollment. While these measures help balance budgets, they also make it harder for students to get into the classes they need and to graduate on time. Since on-time graduation already is one of the biggest challenges for community colleges — only one-third of students get a degree within six years — the chances of graduation rates increasing anytime soon looks pretty slim.

Yet as Obama pointed out in Michigan, upping graduation rates is more crucial than ever. According to the U.S. Bureau of Labor Statistics, almost half of the new jobs in the coming years will require mid-level skills — more than a high-school education but less than a four-year degree. Many of these jobs are in the health care and green energy industries, areas where community colleges already are churning out degrees. But those job-training programs also happen to be among the most expensive to run and suffer from the most limited capacity, making it impossible for community colleges to accommodate the growing demand. In Michigan, every community college offers a nursing program — but every program also has a waiting list at least three years long.

Macomb Community College outside of Detroit has seen a 17.1 percent increase in enrollment since 2005 while the major public schools in Michigan had more modest gains just above 4 percent.

Michigan, with an unemployment rate of 14 percent, has become emblematic of the fight to put community colleges at the heart of the fight to put people back to work. A grant program called "No Worker Left Behind" helps displaced workers, including many from the auto industry, to retrain at community colleges for jobs that are in higher demand. Of the students who have participated in the program, 40 percent have found jobs in their field of study — a success rate that may be considered pretty good in light of the current economic situation.

So far in this economic slump, Michigan has managed to avoid cuts for community colleges. (The rest of the higher education budget, by contrast, has taken huge cuts.) That is partly due to the Legislature's recognition of community colleges' role in transforming the workforce. But it's also a sign of how small the state's $300 million annual appropriation for community colleges is within a $44 billion state budget. "Basically, it's not really worth it to cut community colleges," says Michael Hansen, president of the Michigan Community College Association. "We're such a small piece of the budget, but we have such a huge impact."

Still, the state budget situation in Michigan has gotten so bad that community colleges are anticipating an across-the-board budget cut of 3 percent for next year. At Macomb Community College, located north of Detroit in the heart of the imploding auto industry, a simultaneous 20 percent increase in enrollment means that the college has had to raise tuition by 11 percent for the 2011 academic year. The school also has eliminated 17 staff positions and cut 1 percent from the non-personnel budget.

"In terms of the percent of the revenues that support us, we're down to 22 percent of our funding coming from the state," says Jacobs. "Ten years ago, it was near 35 percent. What's mitigated that impact in the past is a reliance on increasing revenues through property taxes. But given the housing market, we're in a freefall."


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