Though Illinois Gov. Pat Quinn has authorized universities to borrow millions, not every university will resort to loans.
The state of Illinois owes the nine state universities more than $600 million for fiscal year 2010. University of Illinois alone is owed more than $350 million. According to the Illinois statehouse news website FY10 ends Wednesday but the appropriation deadline, which was originally set in August, has since been moved to January.
The bill — Senate Bill 642 — was signed by Gov. Pat Quinn on June 8 and allows state universities to borrow up to 75 percent of payroll and other expenses owed to them through state appropriations for FY10.
SIU President Glenn Poshard said SIU could borrow as much as $75 million of the $96 million still owed to it.
Eastern Illinois University President Bill Perry told the Chicago Tribune his university would borrow up to $7 million of the $19 million owed to it by the state.
But not every university is set on loans to replace state appropriations.
Northern Illinois University spokesman Brad Hoey said the university, which is owed more than $39 million, would only borrow money “as a last resort” and would continue to wait for money owed by the state.
Illinois State University spokesman Jay Groves said his university, which is owed $30 million, does not see a reason to borrow at this time. However, he said the university’s Board of Trustees has approved to use the measure.
“We got the authority just in case we needed it,” Groves said. “We don’t believe at this day we will need it, but it’s nice to know we have it there just in case.”
Groves said ISU is in a better situation than other universities in the state because of its approach to budget preparation.
“We have less debt than many other universities,” he said. “We been very frugal when it has come to getting our budgets ready for the upcoming year. I think we’ll be OK.”
Paul McCann, director of business services at Western Illinois University, said his university has also approved the authority to borrow money, but does not expect to have to use it.
“We think it’s going to be very close,” he said. “We think we’re going to make it through until tuition starts coming in. We’d just as soon not do any borrowing.”
McCann said the university, which is owed more than $19 million, would look into establishing a line of credit just in case.
SIUC officials have said the school’s tuition rates will not increase in fall 2010, though it is owed the second most of all state universities. Both U of I and NIU will raise tuition 9.5 percent in the fall, while EIU, WIU and ISU will increase tuition by 6 percent.
But that is not the only measure other universities are taking to cut costs.
Hoey said besides the tuition rise, NIU would also implement a salary and hiring freeze, reduce its budget and begin a four-day business week in the fall, which he said the university has done in the summer semester since 2000.
Groves said ISU would continue its salary freeze implemented last fall, and also halt planned construction of new facilities.
Hoey said NIU’s philosophy would be to wait for the money it is owed and to avoid the worry involved with loans.
“It is the philosophy of our president (of the university) and everybody else that we will not put ourselves more into possible debt with borrowing, but rather get the money which the state owes us.”