A study of current financial conditions and resources in private liberal arts institutions in the State of Indiana
AbstractThe purpose of the study was twofold: 1) to describe the current financial conditions of the private liberal arts colleges and universities in the State of Indiana; and 2) to determine resources available to such institutions of higher education. Current financial conditions were defined as current (1973-74) operating income and expenses, including capital income and expenses.The 1973-74 issue of the Educational Directory listed twenty-nine private liberal arts colleges and universities in the State of Indiana. Twenty of the twenty-nine institutions participated in the study.The data were obtained from a review of literature, questionnaires completed by selected representatives on each of the twenty campuses, and by on-campus interviews with the academic deans of six of the participating institutions. The questionnaire and interview guide were developed from research in questionnaire techniques and a review of recent research studies dealing with financial conditions of institutions of higher education.All of the participating institutions in the study had participated in the 1972-73 state-wide study of the private sector of higher education conducted by William Jellema. Each institution appointed an on-campus coordinator for the Jellema study.The questionnaires for the study were sent to the Jellema study on-campus coordinators with the assumption that they (coordinators) would have readily available pertinent data for their respective institution. The study involved data for the academic years 1970-71 and 1973-74, whereas the Jellema study involved the academic years 1968-69 through 1972-73.The data obtained from the questionnaires and interviews were analyzed for two purposes: 1) to determine the current financial conditions of the participating institutions; and 2) to determine resource utilization.The findings are based on a review of related literature and the data presented in Chapter III:1. American higher education has had a deeply rooted commitment to a dual system of private and public colleges and universities.2. Institutions of higher education, public and private, dispense services that meet individual and societal needs. The secular nature of many of the services provided by private colleges and universities are not discernable from such services provided by state institutions.3. No United States Supreme Court case was concerned directly with the issue of governmental aid, federal or state, to private colleges and universities prior to the 1971 case of Tilton v. Richardson. The Supreme Court ruled in favor of participation of private colleges and universities in the Higher Education Act of 1963.4. Considerable evidence exists that the private sector of higher education in the United States does receive direct and indirect financial assistance from both the federal and state levels of government.5. Concern is not whether the federal and state government can give financial assistance to the private sector of higher education, but rather the concern centers on how such government assistance programs developed, the need for such programs, and the future of government funding.6. As a whole, the private colleges and universities in Indiana that participated in the study appeared to be following a national trend of declining enrollments in the private sector of higher education. The predictions are that enrollments for the private sector will continue to decline. It was predicted that by 1980, 77 per cent of the national enrollment will be in public colleges and universities.7. Tuition and fees was the greatest source of income for all twenty participating private colleges and universities in Indiana. All studies reviewed for the study reported an identical finding.8. A growing disparity between tuition and fees charged by the public and the private sectors of higher education is becoming more evident.9. Endowment is not a significant source of income for current operations for the majority of participating private colleges and universities in Indiana. 10. Eighty-one per cent of the participating private liberal arts colleges and universities in Indiana reported having an affiliation with a specific religious denomination. Over 50 per cent of the reporting Indiana institutions received no income from the church for either academic year. The church was the second smallest source of income for both academic years for the population as a whole. 11. A variety of systems are used by colleges and universities to gather and analyze data concerning their financial operations. 12. Many ways of defining resources and resource utilization in higher education exist. 13. Private colleges and universities in Indiana are involved, to various degrees, in measures recommended to increase resource utilization. 14. A surplus of revenue from current operating budgets has been replaced by deficit spending in more private colleges and universities in the 1970's than in the 1960's. More private colleges-and universities are experiencing deficits for current operations. Such deficits are larger than in previous years. 15. Forty per cent of the participating private liberal arts colleges and universities in Indiana were reported to be possibly headed for, or headed for, or actually in financial difficulty.The findings of the study support the following conclusions:1. Some of the traditional sources of income for private colleges and universities are at, or are nearing, the point of maximum ability to produce the amount of needed revenue for current operations.2. The private sector of higher education is enrolling a smaller percentage of the national enrollment of students in four-year degree granting institutions. Projections are that the decline will continue.3. The plight of the private sector of higher education has a direct bearing on public colleges and universities, and on the state and federal government.4. No nationally accepted system of data collection and analysis pertaining to the financing of colleges and universities exists. 5. There are a variety of methods through which governmental agencies, state and federal, provide direct and indirect financial support to the private sector of higher education.6. Private colleges and universities provide services of a secular nature that benefit the individual and society.The following recommendations are based on the findings and conclusions of the study.1. The private sector of higher education should realistically assess the role it is to play in the dual system of higher education in the United States. Preparation must be made for a projected decreasing percentage of students enrolled in four-year degree granting institutions.2. A comprehensive system of governmental financial assistance to the private and public sectors of higher education should be developed.3. A nationally accepted and uniform system of data collection and analysis should be developed and implemented.4. A nationally accepted definition of resources and resource utilization in higher education should be developed.5. Better utilization of existing resources in the private and the public sectors of higher education must be implemented.