by Kim Clark

Illinois, Michigan, and Ohio have run out of scholarship money and are turning down thousands of qualified applicants. Public universities in Georgia, Virginia, and Washington have all raised their tuition by about $1,000 for the fall semester. Public colleges in Florida, Louisiana, and Nevada are canceling hundreds of classes for lack of state funding. California has simply shut the door on hundreds of thousands of its high school graduates and workers hoping for new skills.

College officials in troubled states such as Louisiana are girding for further cuts that will be "difficult, painful, and destructive," John Lombardi, president of the Louisiana State University System, warned recently. Students have no choice but to pack into the crowded courses that remain, where overloaded instructors are replacing essay assignments with easier-to-grade (but less educationally rigorous) multiple-choice tests.

The Great Recession has had a devastating effect on higher education, forcing many students across the country to pay more for colleges that offer less. Yet the downturn has also penalized individuals who don't spend the time and money to get a college degree. Even in today's weak job market, the unemployment rate for college graduates is less than 5 percent, about half the rate for those with only a high school diploma. "It's a grim situation," says Lindsay McCluskey, vice president of the United States Student Association. "But what choice do young people have?"

Because of the dramatic budget cuts and tuition increases, she says, today's college students have to work harder to earn degrees than did their older brothers or sisters. Many students are succeeding, but only by borrowing more, finding cheaper or better courses elsewhere, and using their social networking skills to raise money. Perhaps most significantly, they are "being part of the fight" to keep college affordable, McCluskey says, lobbying for change or to block further budget cuts. College students in this more difficult era will find the going tough. "It is not going to be easy," McCluskey says. "But there are ways to make it happen."

A growing number of students are voting with their feet.

Enrollment at the nation's lowest-cost institutions, public community colleges, jumped an average 16 percent last year and is expected to rise by double digits again in the 2010-11 academic year. One reason: "reverse transfers." Students at expensive four-year universities are switching to lower-cost two-year schools to get their basics completed inexpensively. Many other students are signing up for summer or night community college courses to pack in cheap credits and graduate sooner.

These swamped classrooms have spurred community colleges to become more creative in their course offerings, from promoting online classes to scheduling classes at nontraditional times. A 20 percent jump in enrollment at Bunker Hill Community College in Boston last year, for example, prompted the school to start offering classes in the middle of the night. The 11:45 p.m. to 2:45 a.m. classes were such a success that the school has increased its midnight offerings from two courses to five in 2010.

Other students are bidding goodbye to crowded classes and overburdened professors.

The University of Oregon , for example, has seen the number of applicants from budget-crunched California jump from 4,600 to 7,000. Typical of the new Oregonians is Nate Gartrell, who lost his enthusiasm for studying journalism at San Francisco State University last year when he got shut out of his first-choice courses. He says he sometimes had to sit on the steps in second- and third-choice classes. "The state budget cuts were getting ridiculous," he says. One final straw: "I wrote something hastily 45 minutes before class. I knew it was terrible and was full of typos. I was expecting a D and still got an A minus" from a professor he says was too busy to thoughtfully critique his work.

So Gartrell persuaded his parents to pony up the extra money needed to switch to the University of Oregon. Now, though he is grateful for what he feels are better classes and advisers, he admits to suffering from survivor's guilt. "A lot of people don't have the opportunity to go out of state" because they don't have the grades or the ability to scrape together an extra $15,000 a year for tuition, he says.

Given the higher tuitions and dwindling scholarship coffers, students and parents have little choice but to take out more loans. In the first semester of the 2009-10 academic year, college students took out $35 billion in federal Stafford student loans, up nearly $6 billion from the fall 2008 semester. And the amount borrowed by parents through the federal PLUS loan program jumped 50 percent to $3.6 billion. Financial aid officers say they expect the federal student loan binge to continue. The upshot: While today's graduates with loans typically join the workforce owing about $20,000, students who are currently maxing out their federal student loans will graduate owing more than $27,000.

Luckily for borrowers, the federal government has continued to lend even as banks collapsed or reined in lending during the credit crunch. And in the last year, the government has launched a far-reaching reform of the student loan system that greatly reduces college debt burdens. Once borrowers leave school, they can consolidate all their federal loans into a single obligation and apply for "income-based repayment," which caps their monthly bills at 15 percent of disposable income. Those who work at public service jobs (such as teachers, social workers, or police officers) and make 10 years' worth of those affordable IBR payments can have the remaining balance of their federal student loans forgiven

Students are also finding creative ways to raise money for their education, and social networking plays a big part.

Using new websites such as,, and, students can post pleas for donations. These electronic appeals are winning financial support from relatives, friends of friends, and a surprising number of strangers.

Dorrian Lewis, a senior at Mission High School in San Francisco, remembers spending months in the fall of 2009 writing essays for scholarship contests. But she won only a few hundred dollars, nowhere near the $3,800 she'd need to cover tuition, books, and transportation to nearby City College of San Francisco. "I panicked for a little bit," she says. So she filled out a profile on ScholarMatch, a website for San Francisco Bay Area students started by Dave Eggers, author of A Heartbreaking Work of Staggering Genius. Within a few weeks, anonymous donors had contributed enough to cover her costs. Managers of the site say that many of the donors don't appear to be connected to the students but simply contribute $20 or $50 to help those who sound deserving. "We are under no impression that this is a silver bullet," says Eggers, who notes that only 11 of about 100 ScholarMatch students have received the full amount requested. "But this is one tool" that can help fill in financial aid holes caused by the recession, he says.

Meanwhile, many students are taking on activist roles to try to ensure that they and their peers get a stellar education. In the last two years, students across the country have taken over buildings, joined rallies, or marched to government offices chanting "Education is under attack, what do we do? Stand up, fight back!" to alert voters and political leaders to the dangers of tuition hikes and the watering down of educational quality.

Stuart Luther, a senior at Arizona State University who has had to borrow more each year as his school raised tuition, decided he had to do something when he heard the state was threatening to cut his school's budget yet again last year. He switched his voter registration from his home state of Arkansas to Arizona and joined a student-led voter education campaign to inform fellow Sun Devils about a referendum that would raise the state sales tax by a penny to stave off the proposed budget cuts. The referendum won overwhelming support in the conservative state.

Most hopeful of all may be the structural reforms instituted by college leaders who believe the current funding crisis is not a result of the economic cycle, but a permanent reality. Cuts that reduce educational access or quality "threaten our viability in the competitive global economy," says William Kirwan, chancellor of the University System of Maryland. But reducing the cost of higher education doesn't have to reduce its quality, he says. "Can higher ed become more effective and efficient? Absolutely," he argues.

Maryland's public universities are coping with a $48 million state budget cut this year by spending down cash reserves, requiring staff to take unpaid furlough days, squeezing athletics budgets, and leaving lots of unfilled jobs vacant. But while the public flagship universities in California, for example, have filled some of their budget holes with $2,500 tuition increases, Maryland is trying to rein in tuition inflation. The flagship University of Maryland?-College Park has raised tuition only about $400, or about 5 percent, since 2006.

In addition, Kirwan is pushing Maryland colleges to invest in promising innovations, such as Frostburg State University 's recent transformation of its Introduction to Psychology class. Students now have one demonstration-heavy lecture once a week, then attend a tutor-filled computer lab where teaching software helps them study and drill. Students are learning the material far better, test results show, and the reduced demand for instructors has cut the university's cost per student for the popular course from $89 to just $26. The students save money, too; instead of a $120 textbook, they buy access to a computer program for $50.

Kirwan, who is also at the forefront of a drive to stop colleges from subsidizing athletics departments with tuition dollars, says economic conditions have convinced him and a handful of other college leaders that it is time to shift focus from empire-building to money-saving reforms. Even during the boom years, most states were reducing the per-student subsidies for public colleges. Now that state tax revenues are diminished, universities often bear a disproportionate share of budget cuts as other spending programs--elementary schools, prisons, and federally required health programs--become more pressing.

Students in many states should prepare for more cuts. Massachusetts, Ohio, South Carolina, Tennessee, and several others have delayed severe layoffs by patching budget holes with federal stimulus funds. That money runs out next year. If the economy doesn't improve significantly by then, today's grim situation at public universities could get a lot grimmer.

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The Great Recession's Toll on Higher Education