Private colleges and universities contribute $3.5B to state economy

May 23, 2017 | Education, Politics

A report released by the state’s 14 independent colleges and universities suggests the private institutions pump some $3.5 billion into the state’s economy and award degrees in sought after fields like STEM at a higher rate than public institutions, despite getting a fraction of the state aid.  The Association of Independent Colleges and Universities Vice President David Rousseau and Bloomfield College President Richard Levao joins correspondent David Cruz to discuss higher education.

Cruz: I guess the biggest question that people will have they hear this conversation is the fact that you guys get any public funding. Why is that, what does it do this public funding?

Levao: New Jersey is one of those states that is blessed to have a diversity of different kinds of institutions and we’ve discussed this at some length with Tom Kean when he did his blueprint for excellence for higher education in New Jersey. You look at many states in the Midwest, they don’t have small private colleges that survived, only very large state university campuses. In New Jersey that has a number of institutions that are 150, 200 and older there is an opportunity for students to choose different kinds of institutions they can attend. And so the Legislature, quite a number of years ago, decided that as they were investing in creating state colleges, they did not want that to eliminate the traditional, what was then called, private colleges and universities. So, a series of funds were set up to help us survive because clearly most of the private colleges can’t survive with schools that are getting heavily subsidized by the state. They did offer that kind of support for the independent colleges. Now we call ourselves the independent colleges, back then it was private colleges.

Cruz: David, there are 14 schools in this organization, Princeton being one of them. You’ve gone all the way from Princeton to Bloomfield in terms of the history and the amount of money that these colleges receive and charge, what would you say is the general health of private universities and colleges?

Rousseau: Well, I think it’s as it is all over the country, it’s a struggle for small, independent universities. But the key thing, and this report shows, is that we are returning a major investment back to the taxpayers. What little investment we get from this from the taxpayers, most of the investment we get from taxpayers is in student aid. And that student aid, the student chooses to attend one of our colleges or universities. We only get a million dollars of operating aid, as compared to about $1.4 billion of operating aid for the state colleges. And that aid that we get between operating aid and student assistance has generated, this report shows, $3.5 billion in economic activity. For every dollar, we return $35 to the economy.

Levao: If you throw all of the money together, student aid, direct aid and all of that, you look at the gross numbers and the independent colleges produce 25 percent of all the bachelor’s degrees in the state, 37 percent of all the doctoral degrees, 25 percent of all the STEM degrees and we take six percent of all the resources for higher education, so we are a terrific bargain for the state.

Cruz: This study talks about how you graduate a good percentage of students who are in higher demand industries and professions, right?

Rousseau: In the STEM areas we are 37 percent. STEM is Science, Technology, Engineering and Mathematics. We are 32 percent of the overall degrees, both advanced and undergraduate. We’re 26 percent of the degrees for our teachers in the state and we are 31 percent of the nursing to help keep our health care system moving forward.

Cruz: I was at a hearing of, I think it was the Assembly of Higher Education Committee where I think both of you testified, yes?

Levao: My memory does, allow me to deny that question.

Cruz: How do you feel coming out of that? I know there were a lot of public universities talking there but how did you feel coming out of that? Supported?

Levao: We felt supported and we think that the state has to grapple with some very serious issues in higher education going forward. The state has certain budgetary imperatives: pension, benefits and the like, transportation and also restrictions on income, on revenue, and there is no really comprehensive strategic plan for higher education going forward. Leaving aside the Rutgers of the world, which take care of themselves and they have their own strategic plan, they have a unique mission as a national research university, but there is no strategic plan for the rest of higher education and that is not only short sided, but it’s the most expensive way to run a business.

Cruz: David in 30 seconds, is it simply a need for cash from the state to stabilize the private institutions?

Rousseau: Yes, and I think it’s making sure that what we currently are having, mainly student aid, continues to be the choice of the student and there isn’t a diminution of that aid over the next couple of years. I think that’s the key thing right now and it shows that we are a part of educating the workforce, educating the next leaders and again as the report showed, we are also a major part of the economy of this state employing over 18,000 people directly, another 15,000 indirectly. Like I keep on going back to, put my old treasurer hat back on, for every dollar the state is investing, $35 is being returned back to the economy. That in my mind is a good deal overall.

Cruz: Alright, David Rousseau, Richard Levao, thank you both for being with us today.