It Couldn’t Happen Here? Budget Cuts, Accreditation and Cautionary Tales in Kentucky and Illinois

UPDATE 2/12/16: It happened here, or at least we got our version of The Warning Letter I warned about below. h/t Louisiana Voice

Just in time for Lent, Louisiana is being treated to an appropriately massive amount of gloom and doom, and I don’t see any way out of fiscal fasting. The late C.B. Forgotston warned us that Bobby Jindal and his enablers only funded Louisiana through the end of his term, and boy was he right. Plus, as anyone who works in (or has been laid off from) the oil and gas industry knows, our state is in an economic downturn creating a double whammy on our state budget – both in reduced oil and gas revenues and in corporate revenues.

I was raised Irish Catholic, and am not a native South Louisianian, which means my default mindset is Lent without Carnival. I’ll try to stay positive and not feel like we’re screwed, but I can’t help but feel like we in higher ed are screwed.

Or that we’ve been screwed.

But in case any legislators see my blog (I am happy to say that our current Governor follows me on Twitter), let’s look at similar situations in other states, just for a preview of what we might be staring down in a few short months or even weeks.

What will happen if we cut higher education more than it has been?

All our state higher education institutions are either regionally or nationally accredited. Accreditation is required in order to receive Title IV funds, or in laymen’s terms, federal financial aid. Instead of being directly overseen by the Department of Education, we instead voluntarily submit to oversight by our regional accreditors, who ensure that we are in compliance with federal higher education regulations. The Southern Association of Colleges and Schools Commission on Colleges (SACSCOC) is the accrediting agency for nearly all our institutions except for a small handful of technical and community colleges who are accredited instead by the Commission of Occupational Education (COE).

Anyone who has had anything to do with their institution’s accreditation knows that there are a whole slew of accreditation requirements, policies, and standards that institutions have to comply with. If you know one of these people, thank them, because they along with your admissions and financial aid folks shoulder a huge amount of often thankless responsibility for keeping your institution open and viable.

But there is one accreditation requirement that more than any other, threatens or even leads to loss of accreditation.

The core requirement that higher education institutions have a solid financial base and sufficient fiscal stability to support their missions and services.

Usually, the ones we hear are losing or at risk of losing their accreditation due to finances are for-profit institutions or small liberal arts colleges. But lately, state budget cuts have taken their toll, and regional accreditors are on notice.

Last week, the Higher Learning Commission, the regional accrediting body for the Midwest, put all of Illinois on notice that higher education budget cuts there threaten all their state institutions’ accreditation status. This was after Chicago State University declared financial exigency (the higher ed equivalent of bankruptcy) to prepare for these cuts. I’m block quoting the entire letter because it is really important to know what could have happened if we really did cut higher education in Louisiana by 82% like we came within minutes of avoiding last year… or what could happen if we are about to do the same this year.

February 4, 2016
To: The Honorable Governor Rauner
Senate President Cullerton
Senate Minority Leader Radogno
House Speaker Madigan
House Minority Leader Durkin
Members of the General Assembly

I am writing on behalf of the Higher Learning Commission (HLC), the regional accrediting agency for nineteen states, including Illinois. HLC is recognized by the United States Department of Education to assure quality in higher education and to serve as the gatekeeper to federal financial aid for students in our region.

As your role in Illinois includes consequential decisions regarding the governance and funding for colleges and universities, I am notifying you of the potential accreditation outcomes that may result from not approving a budget that will provide funding to Illinois colleges and universities and their students.

A criterion for accreditation is demonstration of the availability of financial, physical, and human resources necessary to provide quality higher education. HLC is aware that the colleges and universities in Illinois may need to suspend operations because financial resources from the state are not available. HLC is obligated to move swiftly to protect Illinois students and to ensure the quality of the colleges and universities they attend.

Following federal regulations, HLC has notified all Illinois colleges and universities that if they believe they will have to suspend operations or close in the next several months, they must provide HLC with a plan for how students can continue at another college or university to avoid eliminating their access to higher education. For students to continue at another institution, it could mean having to transfer to private universities or leave the state. It is also probable some students may drop out of college. The plan also must explain how students will be informed about this urgent situation, including how they access transcripts if operations have been suspended due to lack of state funding.

HLC’s analysis of that plan about the college or university’s viability in the weeks ahead could result in 1) a review of the college or university’s compliance with HLC’s Criteria for Accreditation, 2) a sanction – in which the college or university would have two years or fewer to demonstrate corrective action, or 3) withdrawal of accreditation. After such a withdrawal, there is a multi-year process for institutions to regain status with an accrediting agency. Students attending institutions that do not have status with an accrediting agency recognized by the federal government cannot access federal financial aid.

I served as a college president at two institutions in Ohio and know it is critical for state leadership to have every fact and potential outcome available. The lack of state funding is putting Illinois colleges and universities at serious risk and jeopardizing the future of students. I recognize the pain of budget shortfalls, especially in our home state of Illinois. The economic challenges the state faces are significant, and difficult decisions undoubtedly must be made. I am writing because I believe it is important for you to have all the relevant information before making the tough decisions that fall to your positions.

As you struggle with these difficult and life-changing decisions, if you have questions about the role of accreditation, please contact me.

Barbara Gellman-Danley, Ph.D.
President, Higher Learning Commission

I don’t think Governor Edwards, House Speaker Barras or Senate President Alario want to get a similar letter from Dr. Belle Wheelan, President of SACSCOC. Or at least I hope not.

And this week, the president of Kentucky State University (a SACSCOC accredited state institution) notified Kentucky’s governor that similar budget cuts there could lead to a loss of their institution’s accreditation.

No accreditation – no federal financial aid – if not rectified almost always leads to closure.

And the potential displacement of thousands of students.

This couldn’t happen here? Of the list of potential impacts in the UL System, accreditation risk is near the top. Among LSU institutions, LSUA stated they too would risk losing accreditation if they suffer the budget cuts currently being planned. Really, if Illinois is any indicator, none of us can say that we’re safe especially if we have to shoulder our constitutional burden for the now almost $1 billion shortfall between now and the end of the fiscal year. All the funding that was supposedly SAVEd in the waning moments of last legislative session would be gone, since the impact will be compounded by the amount of the year remaining to cut those funds. So while in actual dollars it would be about $450-500 million, the impact would be far worse since major cuts, even beyond what institutions have already planned for (including programs and even institutions forced to “effectively close”), would be the only way to save that amount of money with only a few months left in the budget year.

Hopefully our governor and legislators understand how high the stakes are if we cut higher education much more than it already has been. We’ve talked about fiscal cliffs but this is another kind of cliff we don’t want to be anywhere near, trust me.

2/10/16 PM UPDATE: Responding to the Revenue Estimating Conference’s updated projections, LSU President F. King Alexander stated, “There is no way to implement such immediate and far-reaching reductions without dramatically impacting the services we provide to our students and our state.” More ominously, ULS President Dan Reneau warned, “If it becomes reality, it would lead to consequences no one wants to consider.”

And yes, the consequences would include what I wrote about above.


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