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VSC system faces financial issues

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A ratings agency recently dropped the Vermont State Colleges' rating from A+ to A.

Chancellor Tim Donovan says that's a result of relatively state-funding not the health of the system's finances, but that's only one of many factors weighing on the schools.

Financial pressures are squeezing the VSC system. Part of the problem is a shrinking rather than growing number of students.

During the next few weeks, about 5,400 of Vermont's 5,800 high school seniors will graduate.

Just less than 60 percent of the graduates will go to college according to 2012 stats from the Vermont Student Assistance Corporation

There are potentially 3,140 VSC students.

If only half stay in-state for college that drops the number to 1,570 VSC students and about 20 percent of that figure continue to go to the University of Vermont with another 15 percent attending private schools within Vermont.

Now, the potential number of VSC students has dropped to 1,050.

Does the remaining 65 percent or about 1,000 freshmen a year leave the five school state college system with enough students to survive?

"We're the institutions where Vermonters who are staying in Vermont go to college and so I'm bullish quite frankly in our ability to continue to serve that segment of the market even as it stagnates," said Chancellor Donovan.

Eighty-four percent of those who attend Castleton, Lyndon, and Johnson State Colleges or Vermont Tech and the Community College of Vermont system are in-staters.

Chancellor Donovan says tapping more out-of-staters is unlikely to be a winning strategy as is the case for research universities.

Instead, he wants to draw in some of the 70,000 Vermonters who began college but never finished.

"The new norm across the country is people come in and go out, start one place, transfer to another and we have to make it easy for that to happen," said Chancellor Donovan.

The 12-school Community College of Vermont network finds success with that model.

Chancellor Donovan says enrollment at Castleton State College and Lyndon is also quite healthy.

He argues struggling Johnson State and Vermont Tech are poised for a turnaround.

"Has to be a turnaround at the other two and I've been in the system long enough to have seen those things cycle," said Chancellor Donovan.

One of the greatest pressures comes from under the Statehouse's dome, as over the last three decades lawmakers consistently cut the proportion of student costs covered by the state.

"I think the state has to find a way to step up the same time I've been in the system for 38 years, we've been saying that for a very long time," said Chancellor Donovan.

Vermont ranks 49th in assistance given to those who attend the state's university and colleges.

In the 80's, the state covered about half the cost of educating a student.

Currently, that figure sits at 18 percent.

"Typically Vermont likes to look down at states like Mississippi and Alabama who are always 49th and 50th in all the metrics and in this case we find ourselves in that position," said Sen. Tim Ashe, D/P-Chittenden County.

Sen. Ashe Chairs the Finance committee and helps write the state's budget.

He says the various colleges may need to streamline offerings reducing the number of similar courses offered across the system.

The Senator says K-12 education dominated recent state house discussion.

"Higher ed has been the focus of much less attention in the broader political dialogue and I think it's time to revisit that," said Sen. Ashe.

But Ashe notes the public also wants it all. Cheaper tuition, more assistance, and lower taxes, an expectation that is not realistic in the current environment.

Employee costs are also stressing the state college system, which has an unfunded post-retirement healthcare obligation that exceeds $150 million.

Chancellor Donovan says they're working to address that issue with their workforce but also noted almost every public institution and government faces a similar situation.

He plans to step-down in January and the next chancellor will need to pick up wherever he leaves off.

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Credit rating downgraded at Vermont State Colleges

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