Is Greater Financial Independence Ahead for Universities?

"Unpredented pressure" on current financial models for public institutions is expected by Moody's Investors Services: 

The financial effects of recessions are typically not felt immediately by leading global public universities because tough fiscal policy decisions often must funnel through a lengthy government budget process before impacting university funding. The government budgeting process, therefore, often renders university financial performance a lagging indicator of economic activity. This delayed impact is even more pronounced in the current recession due to the prevalence of short-term government stimulus spending, which often may postpone or soften funding reductions for universities. However, when stimulus spending expires and governments seek to achieve better budget balance, many universities are likely to experience substantial funding reductions or, at best, an extended period of limited funding growth. At the same time, universities face demand to enroll additional students as alternatives to education (i.e., employment) are weakened by economic contraction, forcing many people to seek opportunities in higher education to enhance skills and credentials. With policies of limiting enrollment places and tuition fees, market pressure to add capacity, and government funding unlikely to increase, Moody’s expects unprecedented pressure on the current financial model of public universities.