State funding is not coming back. Federal funding is here one day and gone the next. Student loan debt is currently at $1.3 trillion. The average student loan debt for a 2015 graduate was $35,000.
What does this all mean for HBCUs? Business as usual is dead and it is time to adapt to a new environment never seen before.
The 2008 financial crisis sent the world into a tailspin and higher education was one of its permanent victims. States had to add thousands, even millions to their payrolls when the crisis hit because people lost their jobs and needed unemployment and other government aid. As a result, these individuals were not paying the usual taxes to the state government that funded yearly budgets. This led to budget shortfalls across the country and, if there is a shortfall, you best believe one of the funding cuts will come to higher education.
Some may see this as harsh and an attack on education, but stop to think of where the cuts could have come from: K-12, Medicaid, early childhood programs, foster care improvements or mental health programs. States see higher education as a place that students, if they want to attend and do not have the money, can borrow it in the form of loans. The state can then take the money that they cut from higher education and put it toward the other programs in the budget that are lacking.
How does the lack of state funding separate higher education institutions? The institutions, HBCU or not, that do not have a substantial endowment will suffer greatly if state funding is decreased, because the institution does not have the money to cover their own budget shortfall. An institution that depends on state funding to make up the majority of the funding each year is on a path to closure.
Think of it this way. If my monthly expenses for me to live equals $3,000 and my job pays me $3,000 a month, then I am fine. What if the company I work for starts to run into financial trouble and has to reduce my pay to $2,800 a month? Then I am going to start to struggle. If the company continues the decrease in pay, then eventually I am not going to be able to pay for the necessities in life and will have to find a new job.
I use that illustration to note that HBCUs have to find new and untapped funding. To the disbelief of many college presidents, that untapped funding is walking across your campus everyday and has already walked across your graduation stage!
