Alaska university system in danger of bankruptcy
High costs, fewer opportunities put students and economy at risk
By: Ian Overton
The statewide University of Alaska system is in trouble. In addition to years of funding shortages, various hiring freezes, trimmed benefits, and increased tuition, basic operation costs are rising due to commodities inflation in petroleum and minerals around the country.
As reported in the UAF Sun Star, the state is expected to benefit from a $1.5 billion ‘high oil prices’ bonus. The Student Board of Regents is hoping to receive $560 million from these funds to pay for what UA President Mark Hamilton calls ‘increasing unavoidable fixed costs’ such as fuel prices, employee salaries, healthcare and retirements, and basic maintenance of facilities. At the same time, all Alaska residents are preparing to be hit by “increasing unavoidable fixed costs” from the same high oil prices.
In his 2003 State of the State address, Governor Frank Murkowski indicated that he would not support expanded State spending. “Alaskans tell me they expect state government to tighten its belt and focus on our basic priorities--education, transportation and public safety….We will be asking all Alaskans to make sacrifices for the mutual long-term good. We simply have to hold the line on state spending.”
Despite Murkowski’s promise of a $10.5 million increase for University of Alaska operating costs, the statewide system only received a net increase of $4.5 million for the 2004 fiscal year. Since then, Murkowski has created about 8,500 jobs in industry. On the other hand, state employees had their retirement funds placed into private investment accounts, a policy the Bush Administration has attempted and which has been abandoned.
Despite the procurement by Senator Lisa Murkowski of $250,000 for distance education courses in January 2004, the new state budget eliminated about twenty-five percent of UAA’s self-support courses. Tuition waiver programs offered by the College of Arts and Sciences were eliminated, without any warning to the students who were receiving them. A university-wide freeze in hiring, faculty travel, and large equipment purchases was enacted by then-Chancellor Edward Gorsuch, who stated, “While we’ve had increasing funding, it hasn’t kept up with inflation or fixed-cost increases.”
During 2003, the Alaska Community College Federation of Teachers nearly went on strike in protest of pay increases that did not rise in step with the cost of living, among other issues. Some of the colleges that would train Alaskans to build and operate the proposed gas pipeline were hit by that budget. Thomas Case of the College of Business and Public Policy said adjusting class size and possibly eliminating some staff positions is required to meet the 2005 budget. Jan Gehlor of the Community and Technical College reported that the Adult Learning Center will be eliminated, and proposed reductions in administrative jobs. Robert Lang of the School of Engineering suggested a cut in the number and frequency of courses, and predicted that recent enrollment increases at UAA indicate that students may have to be turned away.
The University of Alaska is still experiencing shortages. The Social Sciences College at UAA is in the midst of a hiring freeze and tuition waivers for senior citizens have been halved. UAA also signed a sponsorship contract with Wells Fargo, the largest corporate bank in the United States. For a price of $100,000 a year, for a term lasting five years, the Physical Education Facility has been renamed the Wells Fargo Sports Complex. The identity of the sponsor was hidden from students until the change was made.
In addition, student housing is dilapidated, pensions for professors is threatened, and the teacher/student ratio is not improving.
University of Alaska President Mark Hamilton said in 2004 that the emphasis would now be on using “other people’s money, as opposed to state money.”
David Parks, previous Student Regent, pointed out that students “provide dividends unlike that of any other natural resource this country can provide.” Current Student Regent Jacob Gondek concurs, stating, “The average student, when they graduate, every $1 they spend gets $6 back.” While this may be true if graduates stay in Alaska, until that graduation day occurs students are experiencing yearly 9-10% increases in total costs across the nation, manifesting on campus as yearly tuition hikes, adoption of new technology fees, stricter fines, and new parking/housing permits, and manifesting off campus as inflated gas prices, increased heating and electric utilities costs, and higher prices for food.
The cuts in student aid just enacted by the U.S. House of Representatives, if made law, would add another $5 billion a year to students’ costs in servicing their college debts, according to the Congressional Budget Office.
UAA Chancellor Elaine Maimon stated in an interview, “Education is an investment in Alaska’s future… The reality is that rising costs associated with fuel, utilities, healthcare, insurance premiums and retirement are threatening the ability of the University of Alaska to carry out its mission. We have to pay these costs. If the state does not fund UA’s request this year, the university will be forced to take money from existing programs to pay for these unavoidable costs. As a result, the new programs specifically designed to meet Alaska’s workforce needs will be most vulnerable in a cost-cutting environment.” Not only the state of Alaska is also being hit by this reality: so is the nation.
Higher costs of living have extended the time it takes to earn a degree. Only 63% of all fulltime college and university students in America in the twenty-first century graduate from a ‘four year’ undergraduate college within six years or less; more than a third of the students require more than six years to get a degree-if they eventually get it at all- and most require a simultaneous job, or jobs, throughout. Only forty-four percent of fulltime black and Hispanic students get a ‘four year’ degree within six years. One main reason for this is that seventy-two percent of all twelve million fulltime students hold a job or jobs through the school year, up from sixty percent in 1994-1995. But eighty percent of community college students work, and eighty-four percent of students whose family is in the lower third of incomes work.
Forty-two percent of full-time students work twenty hours per week or more-the level at which academic work often is degraded, and graduation chances decline, according to recent studies.
In fact, ten percent of all private college students work more than thirty-five hours per week (i.e., they basically hold a full-time job while fulltime students); eighteen percent of all public four year college students, and thirty percent of all community college students, work more than thirty-five hours per week through the school year.
These are symptoms of a national economic system, of which the University of Alaska is a part, which is in severe financial distress. On November 15, the National Center for Public Policy and Higher Education released a forecast that because of the high and still escalating (six percent per year) cost of higher education, by 2020 the portion of the American workforce with a college education will fall, from 17.1% to 15.4%.
It is up to Gov. Murkowski, the Alaska Legislature, and the Alaskan people to decide whether Alaska’s university system will receive the assets it needs to function.
Contact Ian Overton at