Special Report: Higher Ed and the Economy: It's Definitely Not Business as Usual for Colleges and Universities. Here's What Campus Leaders Are Doing to Help Keep Their Institutions on Top of the Hill

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WHEN BILL CLINTON'S 1992 PRESIDENTIAL campaign strategists came up with "It's the economy, stupid," which underscored that Clinton had a better understanding of issues facing the country at the time and therefore was a better choice than George H.W. Bush, the phrase quickly became popular in American political culture.

These days, intellectual capacities aside, just about everybody, certainly including the nation's higher education leaders, understands that the current economic crisis is having a severe impact. Less clear is what to do about it.

It will be largely up to President Barack Obama and the new Congress to determine how best to respond to the pleas of the higher ed community, particularly public colleges and universities, and all the other sectors of the economy that are experiencing financial difficulties and seeking aid. The way they've responded so far may be an indication of the course the new administration will take on postsecondary issues overall in the months and years ahead.

In his campaign statements, Obama indicated strong sup port for improving postsecondary education, including expanding the use of community colleges and boosting financial aid and tuition tax credits. But at least at the start, higher education probably will have low priority on an overwhelming presidential agenda that includes U.S. involvement in two wars, a flare-up of Middle East fighting, urgent health care needs, and failing banks, automakers, and other large sectors of the U.S. industrial economy.

Most of the attention the new administration can give to education will be focused on the K-12 level, particularly on the future of the No Child Left Behind Act. Obama signaled that in his choice of Chicago Public Schools Superintendent Arne Duncan as the new secretary of education.

Facing stark economic realities, colleges and universities of all types--public and private, large and small, two-year and four-year--are taking it upon themselves to do what they can to maintain operations and survive. From cutting costs to searching for new revenue sources and new ways to sustain their enrollments, they are digging in while waiting for the government to offer them a helping hand. For example:

* In a letter to staff and faculty members in December, Stanford University Provost John Etchemendy said he, President John Hennessy, and several other top administrators would take immediate 10 percent salary cuts as part of a plan that probably will include layoffs as well.

* After state officials cut $30 million from its budget, The University of Georgia announced in November moves including a hiring freeze, shorter hours at a student learning center, less overtime by campus police, and the cancellation of 20 percent of its library subscriptions.

* Dartmouth College, where "revenue is down significantly because of declining endowment performance," will have to make sustainable adjustments in projected expenses by up to 10 percent, or $40 million over the next two fiscal years, President James Wright told members of the Dartmouth community in a letter in November.

* Even as Arizona and the rest of the nation face a critical shortage of nurses, Arizona State University announced in October that it would cut enrollment at its nursing school because of an anticipated drop in state funding.

* The California State University system announced plans in November to reduce enrollment, and one of its 23 campuses, Fresno State, suddenly stopped taking applications three weeks before its initial February I deadline.

"We've been through recessions before, but I think this one is deeper and probably has more consequences than any one prior to this, and universities are feeling the brunt of it. It's almost a 'perfect storm,' with state appropriations being cut back while people are losing their jobs and investment portfolios are dwindling," says Sal Rinella, vice president of the STRATUS division of Adanta-based Heery International. …