The University of Illinois may be very, very short on cash this year. According to an article by Kerry Lester in the Daily Herald:
Illinois’ premier public university may be owed as much as $700 million from the state by year’s end, threatening its “entire financial underpinning,” its president told a group of regional business leaders Monday.
[University of Illinois Interim President Stanley] Ikenberry said the university expects to finish the fiscal year at the end of June with $335 million in missing payments from the state – roughly 55 percent of its total appropriation.
Illinois, like most U.S. states, has been providing less money to its state universities over time. But this year, facing a $13 billion deficit due to the recession, the state wouldn’t even pay the universities the money specifically appropriated for education by the Legislature.
As Ikemberry pointed out, because his university was now forced to run itself on its existing money, “in effect we’re making an interest-free loan to the state.” Soon the school is going to exhaust its funds.
The situation at the state’s flagship university is not nearly as bad as that at the state’s 13 smaller public schools, however. Their small size makes them much more dependent on state appropriations for day-to-day operations. Illinois recently allowed state colleges to borrow up to 75 percent of the money the legislature owes them, at an interest rate ceiling of 9 percent. [Image via]