When All Else Fails

Austerity Sledgehammer: At Least Half a Million College Students On Waiting Lists as Loans Dry Up; Colleges Face Mass Layoffs

by Mac Slavo, SHTFplan

Austerity measures, though unpopular and not discussed by government officials and media pundits, are in full effect across a broad spectrum of services and industries.

In many parts of the country local governments are being forced to layoff or cut the salaries of thousands of emergency personnel. Education spending cuts across debt behemoths like California, Illionois and Michigan are forcing elementary and high school classrooms to capacities exceeding thirty or forty students at a time and removing subjects like art, music and physical education from school schedules.  Towns and cities all over America are declaring bankruptcy on an almost weekly basis. Government sponsored health care systems are feeling the pressure with majorcuts in access to key prescription medications quickly becoming the norm.

Just two years ago the idea that austerity cuts would hit America like an 8-pound sledgehammer was inconceivable.

Today it’s become quite apparent, especially for those just entering college or returning to higher education in an effort to learn new skills for a dying or dead jobs market.

In addition to nearly $1 billion in state funding cuts for college students, the progressive State of California and others are now facing massive jobs cuts and salary reductions across the board.

This is only going to get worse – it can be no other way:

More than 470,000 community college students are beginning the fall semester on waiting lists, unable to get into the courses they need, according to a survey of California’s two-year colleges that captures a system struggling amid severe budget cuts.

California’s community college system, the nation’s largest, has sufferedabout $809 million in state funding cuts since 2008. It faces another $338-million hit midyear if voters reject a tax measure on the November ballot supported by Gov. Jerry Brown.

Although they hope for the best, many campuses are planning for the worst. They are taking steps, for example, to negotiate union contracts that include reductions in compensation and employee working hours pending further spending cuts.

There is no question that the system is shrinking in terms of the number of students we’re serving but not shrinking in terms of demand,” Chancellor Jack Scott said in an interview Tuesday. “The real problem is we don’t have the financial resources to offer the courses that we could fill. In the long run, it’s going to be hurtful to the economy. These are the individuals who are going to make up the future workforce of California.”

These students also tend to be among the neediest: They typically require remedial classes, financial aid, tutoring and counseling. And many are juggling school with jobs.

Yet 70% of colleges in the survey report having reduced hours for such support services, and 87% have reduced staff. In addition, 82% said they planned to offer no winter session this year.

The colleges predicted a grim year if further cuts are required in January. Administrators said they would need to further reduce class offerings, lay off full-time faculty, postpone building and classroom maintenance, and borrow to manage cash-flow needs.

Already, budget cuts have had a deep effect. Overall enrollment dropped about 17%, from about 2.9 million in the 2008-09 academic year to 2.4 million in 2011-12, and officials have estimated a further decline this year. The number of class sections decreased 24% from 522,727 in 2008-09 to 399,540 in 2011-12.

Despite their best hopes for change, it’s not a question of “if further cuts are required,” but rather, “when” those cuts will take place.

In fact, those cuts are taking place now, as evidenced by the half a million California college students sitting on the sidelines. As this college tuition bubble detonates, so too will the thousands of jobs it supports. As we noted in the summer of 2010, we can expect local and state governments to lay off at least 2 million people, which will further accelerate the depressionary feedback loop.

Americans are broke and going hungry, states have no money or credit left to fund the deluge of services they’ve committed to over the last three decades, and the Federal government is running unprecedented deficits and debt.

There is no help coming, regardless of how loud Occupy Wallstreet Protestors scream for free education, healthcare and more jobs.

We are seeing massive cuts – to the tune of tens of billions of dollars – in services that have become essential to stable functioning of the nation’s economy. In due time austerity will rear it’s ugly head in government safety nets that include federal retirement distributions, pensions, food and nutritional assistance and essential medical services.

They’ll protest when they can’t fund their college educations or homes. They’ll scream loudly when they can’t find jobs. But when they can’t feed their families or provide life saving medical care they’ll riot in the streets.

The force of the sledgehammer is starting to hit and the pain is going to be brutal and without mercy.