Colleges, Universities to Face New Financial Challenges Despite High Hispanic Enrollment
While several business sectors are still recovering from the financial crisis of 2008, colleges and universities are reportedly set to face further "substantial" economic challenges.
According to a new report from Moody's Investor Service and Standard & Poor's, the next 12 to 18 months will be "negative" for U.S. higher education institutions. Moody's stated future tuition revenue growth for colleges and universities will remain "meager," partly because of families struggling to afford higher education. Insufficient state funding and limitations by the government have also led to the "negative" outlook rating.
The "severe competition" to attract students was considered another critical challenge for higher education institutions. While families struggle to afford college or university tuition, the National Association of College and University Business Officers noted grants and scholarships for first-year students have reached its "highest recorded" levels, notably from private institutions.
"The data indicate that private institutions are continuing to respond to a dynamic student recruitment environment. Changing student demographics, increased competition and cost sensitivity are factors which drive the trend in tuition discounting," said NACUBO President and CEO John Walda, in a statement.
The Moody's report disclosed approximately 40 percent of public and private universities will see less than 2 percent growth from student-generated revenue. Moody's stated about 10 percent of public and private universities are undergoing some type of financial concerns due to declining revenue and anemic operating performance.
The government has "modestly" increased funding to public education institutions by three-to-four percent, according to Moody's. One out of four states, however, have reduced or stopped the funding, or are set to do so. In some cases, public universities have stopped increasing tuition prices in order to receive more state support.
According to the Education Trust, the Hispanic college enrollment rate at four-year institutions increased by 22 percent between 2009 and 2011. In comparison to non-Hispanic white students during the same time period, it increased by 2.7 percent. Graduation rates have also increased by 4.7 percent while non-Hispanic whites saw a 2 percent spike. While the U.S. Census Bureau reported college enrollment slipped between 2011 and 2012, the rate among Hispanics increased. Pew Research Center reported the number of 18-to-24-year-old Hispanics enrolled in college reached new highs with 2.4 million by 2012. The Pew data revealed Hispanics comprise of 19 percent of the overall college students between the ages of 18 and 24.
The U.S. Department of Education has also published a guide specifically for Hispanics to understand methods of receiving financial aid. The guide, titled "¡GRADÚATE!: A Financial Aid Guide to Success," also provided resources for undocumented students, from what they can receive and limitations set on the state level.
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For the latest updates, follow Latin Post's Michael Oleaga on Twitter: @EditorMikeO or contact via email: m.oleaga@latinpost.com.
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