State colleges ponder debt relief as merger vote nears
They were impressive developments if pricey — upscale dorms and a 6,000-seat sports and convocation center at California University of Pennsylvania, and three hours north, an eight-building “neighborhood” of studios, suites and semi-suites at Edinboro University.
Each was part of a decadelong building rush across Pennsylvania’s 14 state-owned universities whose leaders — having been told by the General Assembly to rely less on taxpayer money — turned to private means to finance massive projects needed to compete for students,
often without enough money in hand.
Now, those projects and the debt that drags down campus budgets have surfaced in an increasingly passionate debate over what Pennsylvania state government, long accused by some of “starving” its universities, could do — if it chose — to give the campuses new life, with or without controversial campus mergers.
Plans to combine California, Clarion and Edinboro universities in the west and Bloomsburg, Lock Haven and Mansfield in the northeast have taken tired-sounding, yearly arguments about campus subsidies to a whole different level in Harrisburg, with a final July vote on the controversial mergers just weeks away.
Debt is not nearly the only problem facing the universities, said State System of Higher Education Chancellor Daniel Greenstein. He said course arrays on the six campuses are not sustainable given a decade of enrollment declines and other budget pressures.
But he also said, most recently in a hearing Thursday, that State System redesign and campus consolidation will be merely a BandAid unless Pennsylvania takes a big step away from its historic rank near the bottom of states nationally in higher education support.
Sounding exasperated as he repeated, yet again, the state’s standing at less than half the national average in per- student support to higher education, Mr. Greenstein told a Democratic House Policy Committee hearing:
“I have never wanted to be average,” he said. “I so want to be average.”
Democratic members of the General Assembly, who are in the minority, say targeted construction debt relief would help but so would a major boost in annual appropriation beyond the $477 million that goes to the 94,000student system, a sum well less than a third of what operations cost. Students and families largely pay the rest through tuition and fees.
Mr. Greenstein said, without elaborating, that both forms of aid are on the table with the Legislature and Gov. Tom Wolf.
“We are pursuing these conversations, both with the administration and in the House and in the Senate,” he said.
He intimated that again Wednesday, as the State System board of governors held a workshop and pledged via Zoom call to accommodate and weigh public comment, including four 90-minute virtual hearings slated for morning and late afternoon on both June 9 and 10.
Costs to build new residence halls, student centers with high-end amenities and dining centers fit for demonstration cooking account for nearly two-thirds of the annual $95 million in debt service payments across the system. An updated total debt figure was not available, but at one point, the obligation approached $2 billion.
The State System has faced criticism for lack of oversight and extravagances involved with some of the projects, which proliferated in the decade before enrollment peaked in 2010 at 119,500 students. Over the years, bond debt to pay for the improvements was approved the system’s board of governors, whose members include Democrats and Republicans from the General Assembly as well as the executive branch.
The sprawling Highlands residential development at Edinboro, like the convocation center and new dorms at Cal U, added to the wow factor among prospective students and helped the system reach record enrollments a decade ago. But they are a large part of yearly debt service, which totals $21 million on those two campuses alone, gobbling up budget resources.
During last Thursday’s hearing, state Rep. Jordan Harris, D-Philadelphia, said moves by Cheyney that included paring its budget by $9 million do not fully explain how the historically Black college, long the most beleaguered campus in the system, actually survived.
“I don’t think we’re being real,” he told the chancellor.
The representative pointed to assistance from Harrisburg, including a $45 million infusion of cash in a state not known for generous campus funding. He said it kept Cheyney afloat but is now being glossed over.
“We paint this rosy story of how Cheyney got there, and that story is not the actual story,” he said. “I was there. I was in the room. I had to vote on this stuff.”
He suggested the system ought to be given a similar chance.
Regarding the planned mergers, Mr. Harris asked why students would choose Clarion, Edinboro, Lock Haven and Mansfield — schools he said would become satellite campuses — when they could enroll in California and Bloomsburg for the same price. Both institutions would hold the accreditation for the combined entities.
If his fear comes true, and other system assumptions are wrong, the representative added, “Now you’re killing off universities.”
The elephant in the room, he said, is that the General Assembly does not adequately fund its campuses. Pennsylvania is 47th among states in per-capita funding for higher education, half the national average per student, about half what states including Kentucky spend.
“You starve off the State System for enough years, and now all of a sudden, we have to consolidate and integrate,” Mr. Harris said. “And then you’ll continue to starve the State System until it’s no longer there.”
“That’s where we’re going if we’re not having a real serious, honest, open dialogue.”
Mr. Greenstein himself has faced criticism over details missing from the merger plans and for not pushing more forcefully for a larger boost in yearly state aid in the face of what would be the largest change in the system’s nearly 40-year history.
A survey of faculty shows little support for the mergers’ current iteration, less than 8%. Jamie Martin, president of the Association of Pennsylvania State College and University Faculties, pointed to unanswered questions from course array to prospects of NCAA approval for continued sports at the combined institutions.
“So little detail in a document that is 439 pages in length,” she observed as the twin merger plans gained initial system approval on April 28.
Mr. Greenstein said much of the power to stabilize the system and ensure its future is in lawmakers’ hands.
“These are state-owned universities. They’re owned by the General Assembly, right? The way out of this challenge is let’s be average, I don’t even think we have to make it to average. I think I’ve said $150 million gets us back ... let’s go. Write the check.”
“The challenge,” he added, is that “historically, Pennsylvania has not acted.”
Twenty years of inaction and gridlock among Republicans and Democrats has allowed schools to become financially fragile. He said the obstacles that presents to system redesign are among his biggest regrets about coming to Pennsylvania.
Asked by Rep. Peter Schweyer, D-Lehigh County, if an additional $150 million from the state would negate the need for mergers, the chancellor replied with a hint of sarcasm that it depends.
“What do you want to do?” he shot back.
“If you want to sustain the universities, not have any more job losses?” he asked. “Sure, $150 million.”
“You won’t see an iota of difference in community college transfers, student success,” Mr. Greenstein said. “Things that actually change students’ lives.”
To achieve those goals, and cut attendance costs, he said, that’s a whole different conversation. Reducing costs to each student by $1,000 a year would require an extra $85 million annually. Restoring the $6,500 price advantage that system students enjoyed in 2010 over other public and private institutions would require five times that, in addition to the current $477 million appropriation.
“You’re talking $900 million,” he said.