New England's Education Industry Adjusts to a Decade of Hard Knocks

FORTY-EIGHT years ago, New England College in Henniker, N.H., opened its doors to a brand-new class of 68 students. Created basically because of the GI Bill, the three-year college offered only two majors: business administration and engineering. As time went on, New England College became co-educational and expanded into a four-year liberal arts college including a campus in England.

But hard times hit. Like colleges and universities throughout the region, New England College is feeling the effects of the recent recession. Enrollment is down and financial problems forced the college to lay off 30 percent of its faculty this year, says Paul Daum, New England College history professor.

``We have fared terribly,'' Mr. Daum says. ``Enrollments are down across the board. There are real problems.''

Education plays a major role in New England's regional economy, which boasts 178 independent and 83 public institutions of higher education.

But like other industries in the region, the education industry has struggled through six years of recession. Though the economy shows signs of recovery, colleges and universities are still coping with budget gaps, shrinking federal financial aid money, declining enrollments, and a choosier student market.

Some independent schools are restructuring. Early in June, Bennington College in Bennington, Vt., announced plans to reduce tuition, cut staff, and eliminate tenure to help bridge a $1 million deficit. Massachusetts Institute of Technology in Cambridge, Mass., announced a three-year program last fall to cut $40 million from expenses. By 1997, university staff will be reduced by 400, says Ken Campbell, director of MIT's news office.

Harvard, Yale, and several other independent universities have had to deal with financial difficulties as well.

One problem has been declining enrollments. While public universities have attracted more older, nontraditional students to make up for a decreased population of 18-year-olds, smaller private colleges have not been as successful. Smaller schools are also having trouble meeting increased demand for financial aid packages for students, especially in wake of federal grant cuts.

``I would say there are a number of institutions that are living close to the edge,'' says Charles Cook, who works on higher education issues for the New England Association of Schools and Colleges. ``They continue to offer good programs but they have storms to weather.''

Public education has taken the worst hits. After cutbacks in state education funds during the 1980s and '90s, public universities and colleges raised tuitions rapidly. Some universities in Massachusetts raised tuitions 10 percent to 12 percent a year.

But for the first time in several years, states are increasing public education funds this year, says John Hoy, president of the New England Board of Higher Education.

``It looks as if there will be a modest increase in investment [this year] in each of the New England states following a year when the cuts were quite brutal,'' Mr. Hoy says.

In Massachusetts, the improved economic climate prompted a Legislature-appointed task force to propose a new funding scheme. The proposal would reduce students' share of tuition costs and increase the state's share. David Breneman, a Harvard University professor who also chaired the task force, says many students have been driven away from college because of the high tuition prices.

``It has been like a roller coaster throughout the '80s and early '90s and now there is widespread desire to try to introduce a degree of stability in the system,'' Mr. Breneman says.

Meanwhile, tuition hikes at private and public colleges will slow down in the coming years while students are also becoming more selective, Hoy says.

``Despite the fact that we might be seeing an uptick in the economy ... people will want value for that which they are investing in - the cost of their undergraduate education,'' he says.