It may be that higher education is in greater demand during economic downturns but - after years of insidious cutbacks - American public institutions are struggling to maintain their traditionally high standards. Indeed, the Great Recession seems poised to wreak lasting damage on one of the most successful models of higher education in the world.

Higher Education Budgets and the Global Recession, a report published by the University of California at Berkeley's Center for Studies in Higher Education last month, outlines the discouraging picture. The report's author and a senior research fellow, John Aubrey Douglass, gives a global overview and explores - in particular - the situation in the union's wealthiest and most populous state, California.

The report notes that, while other OECD nations are actually using the recession as an excuse to improve the quality of output in the post-secondary sector and to promote innovation, the US is witnessing uncoordinated cuts in funding at the state level.

This is inevitable given the decentralised structure of higher education where colleges and universities must rely on financially-strapped state legislatures for much of their money. And more than 75% of all higher education students in the US attend publicly-funded institutions.

Explains Douglass: "In short, how state budgets go, so goes US higher education; whereas [for] most national systems of higher education, financing is tied to national budgets with an ability to borrow."

According to the report, 34 states have already been forced to make draconian cuts to spending on their colleges and universities, imposing measures such as furloughs, layoffs and tuition increases. The projected cumulative budget deficit for all 50 states and Washington DC in 2011 alone is US$142 billion.

Several initiatives by President Obama have attempted to mitigate the damage but these have not been sufficient. In particular, last year's stimulus package only succeeded in forestalling that which cannot be guaranteed in the proposed 2011 budget.

Then last week, the administration planned to guarantee the passage of health care legislation in Congress by bundling it with the Student Aid and Fiscal Responsibility Act in a budget reconciliation package.

The long overdue reform to the student loan programme that was overwhelmingly passed in September 2009 appears, on this ticket, as a mere shadow of its original iteration. Without the act not only is college affordability compromised, but the integrity of state institutions further undermined.

Also on the block is the Obama administration's ambitious and highly-touted American Graduation Initiative (originally part of the Student Aid Bill) that promised to restore the US to its position as the world leader of college graduates by 2020. In real numbers, this means a loss of an expected US$12 billion investment in two-year community colleges over the next decade.

Nowhere have the effects of the current recession been seen more devastatingly than in California, which boasts the largest state university system. The 2010 state budget has been pegged at US$20 billion but because the Obama administration's proposed 2010 budget has only earmarked US$1.2 billion - significantly short of the US$7 billion requested by Governor Schwarzenegger - further pay cuts, layoffs and reduced enrolments are expected.

For instance, the University of California Board of Regents was forced to levy a mid-year tuition increase of 15% for most students in January 2010, bringing the annual undergraduate tuition to $8,373. Another 15% hike approved for the autumn will bring it up to $10,302.

The response to this and similar measures at other colleges and universities prompted student protests on 4 March throughout the US. Billed as a "Day of Action for Public Education", the demonstrations were largely peaceful.

The long-term implications of the current situation are worrying, with many fearing this recession will only hasten a process of decline that has had higher education analysts urging policy-makers to re-orient their priorities for nearly a decade. In the 1990s, the US had the highest post-secondary graduation rate among the 30 OECD member countries; today, it ranks 19th.

Recalling the Depression of the 1930s, Douglass observes that the goal of federal investment in higher education must be to "help restructure the US labor market by producing a more skilled labor force".

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