While massive state- and city-pension debts across the country have gotten anxious scrutiny from lawmakers and the public, their effect on public universities and colleges has gone largely unnoticed. But an independent board that oversees state and local accounting standards nationwide has recently put into effect new rules, requiring more disclosure of how much the government owes to universities’ retirees. And these requirements are likely to draw back the curtain on huge liabilities that could drag colleges’ balance sheets—which have been slowly improving since the recession—back into the red.
Experts warn that the pension problem could foil the institutions’ promises to contain their costs, and instead result in continued upswings in tuition despite the fewer courses, programs, and services offered—especially at public universities. It also partially explains why such institutions are increasingly turning toward adjuncts.
“We’re no longer really funding students,” said Jane Wellman, a university-financing expert and senior advisor to the College Futures Foundation, a California-based advocacy group aimed at removing barriers to higher education. “We’re funding benefits.”