UW System campuses face a defining crisis
The pandemic is making a difficult challenge even harder
After a decade of falling behind in enrollment and funding levels compared to other states, Wisconsin’s public colleges and universities now confront a crisis that could define them – for better or worse – for years to come.
Even before the pandemic, the state’s public higher education institutions faced tougher financial trends than their peers nationally due to stagnant state funding, a tuition freeze, and demographic challenges that have led to fewer high school graduates.
From two-year technical colleges to the flagship University of Wisconsin-Madison and the urban campus of UW-Milwaukee, COVID-19 threatens further harm, raising the possibility of additional faculty cuts, reduced programs, or additional debt. These institutions also are governed by a highly centralized structure and system that may complicate their response to the pandemic.
A comprehensive report released by the non-partisan Wisconsin Policy Forum in December found the UW System and Wisconsin Technical College System (WTCS) face the following headwinds:
For its public colleges and uni
versities, the state's ranking for revenues per full-time student fell from 24thhighest nationally in 2000 to 41st-lowest in 2019. Wisconsin's ranking also plummeted from middle of the pack in the Midwest to dead last during the same time frame. Arguably, these national data omit some technical college revenues for Wisconsin but even after accounting for that funding here is still below the national average.
From 2011 to 2019, net enrollments at public colleges and universities in Wisconsin fell by 13%, or more than twice the national average. UW-Madison increased enrollments over these years but still lagged a group of peer universities.
As recently as 2010, tax dollars from the state's main fund were the largest source of UW System revenue but they have since been overtaken by both tuition and federal revenues. The UW has fallen from the state's second-largest general fund program in 1992 to its fifthlargest today. State aid to technical colleges is also down since 2000 after netting out funds for property tax relief.
Tuition rose rapidly during the 2000s but for the past eight years in-state undergraduate tuition costs at UW campuses have been largely frozen at 2013 prices. Among 35 peer public research institutions nationally, UW-Madison has had the third-smallest increase since that time when combining both tuition and fees. Some other peers with similar controls on tuition received substantial increases in state funding to offset the impacts. UW-Madison did not.
The reserves of tuition dollars carried by the UW System grew during the Great Recession – a controversial increase that was enabled by a rise in tuition. Yet since 2013 tuition balances have fallen 58.8% and left the state's universities with fewer of these reserves to help weather the current pandemic.
That's a worrisome development given that the UW System estimated a negative impact of $258 million just through Sept. 30 after factoring in higher costs, lost revenues, and an early round of federal aid that was approved in March 2020.
The latest federal relief legislation approved last month should help to staunch some of the immediate bleeding. UW officials estimate it could provide $101 million in assistance to their campuses and $49 million more for student support and financial aid.
Public colleges and universities have also achieved some gains despite these troubling financial and enrollment trends. Graduation rates at public fouryear institutions have improved for students overall and for underrepresented minorities. Students now require fewer credits and less time to graduate, lowering both tuition costs and lost earnings. After adjusting for inflation, debt levels for those earning bachelor's degrees have fallen since 2014.
Challenges remain, however, and in some areas they are great. While minority students have made gains, Wisconsin still has the nation's largest six-year completion gap between black and white university students at public four-year institutions, according to National Student Clearinghouse data.
Faculty trends to some extent reflect these recent financial challenges. Between 2000 and 2019 – a period of rising enrollment – UW System faculty fell from 6,103 to 5,675, or 7%. At UW-Madison, faculty numbers remain essentially flat despite an increase in enrollment; and at UW-Milwaukee, faculty numbers rose during the 2000s but fell 16.9% between 2010 and 2017, nearly erasing the previous gains. Faculty salaries at UWMadison have also lagged – particularly for full professors.
These faculty impacts may have limited the ability of both universities to attract research dollars. The most recent figures available show that UW-Madison's rank on R&D spending fell from third-highest in the nation in 2010 to eighth-highest in 2018, as most other top research universities increased spending more quickly. UW-Milwaukee has done even worse, with research expenditures actually falling over that period.
Wisconsin's universities must meet these challenges while working within a highly centralized system, which may limit their ability to respond quickly to challenges or tailor solutions to individual campuses. UW-Madison answers to one statewide governing board, the Board of Regents, with no constitutional authority and one statewide system that includes all public universities in the state. Almost none of its peers is governed that way. Wisconsin is also unusual in not delegating any authority to issue debt or manage construction projects to its public universities or related entities.
Policymakers and higher education leaders already have taken some steps to respond to these troubling trends, including the merger of two-year UW campuses with larger institutions, expanded online learning, and cuts to programming and staff at some four-year universities. However, while the Wisconsin Policy Forum doesn't advocate for specific policies, our analysis suggests additional steps may be needed.
For example, to ease the financial pain, state lawmakers might consider ways to minimize and eventually reverse state funding cuts or allow tuition to rise subject to some benchmark such as inflation or the increases adopted by other Big Ten schools. Tuition increases could also be considered for certain campuses or for select in-demand programs. To offset the impacts on students and families, legislators could explore ways to expand financial aid initiatives.
To boost enrollment, higher education leaders could look to expand online instruction, further improve transfers between two-year and four-year institutions, and support students of color more effectively.
Finally, to enhance the ability of public higher education institutions to manage their challenges, policymakers could consider additional flexibility for UWMadison or the UW System in areas such as budgeting, procurement, capital projects, borrowing, tuition setting, or establishment of campus-specific boards. As a potential last resort, they also could consider reducing the number of campuses through the closure of one or more of them. However, our report shows closing a small campus might not save as much as some might expect.
While no one would have invited the current crisis, its impact on Wisconsin's economy and finances may provide the strongest impetus yet for state policymakers, higher education leaders, and other stakeholders to chart a better course for our public colleges and universities. Doing so boldly and quickly could help ensure a return to prosperity in the years ahead.
Jason Stein is research director of Wisconsin Policy Forum.