State colleges and universities are facing serious challenges as two forces collide: an increase in enrollment prompted in large part by the economy and a sharp decline in state aid.

Stimulus money helped many stay on track this year, but that safety net is unlikely to be there for 2011. Since the mission of state schools is to provide accessible and affordable education, officials are combing their budgets in an attempt to ensure they can provide quality education without having to lay off staff or cut classes, which would shortchange students.

The gravity of the situation was revealed in a letter sent by UMass Amherst Chancellor Robert Holub to the university community. In it, he relayed a warning from the Obama administration that state and local agencies will face a “funding cliff” in 2010.

“Here at UMass Amherst we are no different,” Holub wrote. “We estimate that our state allocation will be reduced by $50 million or more in the coming fiscal year — an enormous and potentially devastating cut.”

As the new year begins, BusinessWest takes a look at how four area public colleges are managing the challenge, why they remain optimistic as they face deficits of up to $50 million, and how those losses will affect students.

UMass Amherst

UMass Amherst Executive Director of News and Media Relations Ed Blaguszewski said many adults are currently seeking additional education to enhance their net value or put themselves in line for a promotion. This has translated into a real surge this year in the university’s Division of Continuing and Professional Education, which saw a 5% to 8% increase in enrollment.

Many students who had never completed their four-year degree enrolled in the University Without Walls program, he said, which handled the increase by adding courses to its online program, which has grown steadily over the past five years.

Their university’s master’s programs in Business Administration and Public Health have grown, and an increasing number of nurses with associate’s degrees are pursuing an advanced nursing degree online. “It’s significant, compared to the national trend,” said Michael Grabscheid, director of Outreach Marketing and Technology. “Other colleges are seeing these type of enrollments hold steady, or they are dropping off. This growth is not pervasive across the country.”

He attributes it to local job losses and people’s need to make themselves valuable to the workplace. “It’s an incremental cost to add these programs as they don’t need physical space,” he said. “They contribute to the college’s economy as a whole and are a net gain.”

So far, the school has not had many layoffs. “We are in better shape than many other colleges,” Blaguszewski said. “Even private colleges have had major declines in their endowments.”

But that doesn’t mean anticipated budgets won’t affect students or staff.

Holub recently outlined the budget strategy via his online statement. “In this current fiscal year, the infusion of federal stimulus funds has enabled us to avoid the kinds of drastic cuts that would have resulted from the enormous reduction in our state allocation. We have, however, reduced our base budget by more than $10 million, much of it from administrative areas,” he said. “But because of stimulus funding we have not yet felt the pain of the major reduction in state support.”

The FY 2010 budget for the Amherst campus is $824 million, and Holub said the loss of state funding is being handled by the Budget Planning Task Force, which has created a number of new initiatives. “The ideas range from new and innovative master’s degree programs, student-recruitment strategies, and summer initiatives to budget-reduction priorities and fee increases,” he said. “We will continue to work closely with all constituencies on ideas to generate revenues in new and inventive ways, cognizant of the fact that every new dollar we raise is one less dollar we must cut.”

Administrators are also working to secure government funding. “We have worked to engage our students, alumni, and other supporters in an institutional-advocacy network to make the case in both Washington and Boston that support for UMass Amherst is a critical investment,” Holub said.

Westfield State College

Westfield State has seen a steady rise in applications for its day school for about three years. Two years ago, it received approximately 1,500 applications, while that number soared to 2,100 this year, and applications from high-school students are still arriving. However, the continuing-education enrollment, split between evening school and graduate school, has remained flat for three years.

The state college had 4,300 full-time students in 2008, 4,500 in 2009, and expects to serve 4,700 undergraduates in the coming year.

“We attribute our increase to the fact that we have the reputation of being a quality school with the feel of a private school at a public cost,” said Janet Garcia, director of Marketing.

Vice President of Administration and Finance Gerald Hayes said Westfield State expects to see its population continue to grow. “Affordability is an issue for Massachusetts families, which has accelerated student interest in our school,” he said. “Westfield State is an attractively priced alternative to private higher education.”

WSC’s annual operating budget is $72 million, and the state appropriation for 2009 was initially $23 million. But that amount declined to $19.4 million and is only expected to be $18 million in FY 2011, which begins July 1, 2010.

This year’s budget decline was mitigated by federal stimulus dollars and employees have been asked to be more conservative about spending, Garcia said, adding that the board of directors is searching for methods to enhance revenues.

Still, officials are also hoping more stimulus money will become available. “Last week, the Department of Education in Washington unleashed $50 billion for state and local governments to distribute to maintain employment levels,” Hayes said. “But that still has to go through the legislative process.”

In the meantime, officials are focusing on ways to grow revenue while tightening their belts. “Continuing education and online education are good examples of where we might be able to grow,” Hayes said. “We may also look at a reduction in travel and the use of consultants.”

Student fees have risen in the past few years, but Hayes said further increases would be a last resort. “Accessibility and affordability are two key issues,” he said. “But it’s too early to tell if we will have to raise fees in the next fiscal year. These are challenging times.”

Adjunct faculty has been hired, but Hayes, like others we spoke with, said this is not a long-term solution. “At some point, something is going to have to give.”

Springfield Technical Community College

Springfield Technical Community College has seen an increase in enrollment of 12% in two years. “It is a trend that seems to be continuing and is very significant for us,” Rubenzahl said. “This area hasn’t had a population increase, so these numbers are substantial. It’s hard to absorb that and not be able to hire any new faculty and staff. It makes it really challenging.”

The school has filled the gap with a large number of part-time faculty members, but it’s less than an ideal solution. “Our students deserve a full-time faculty. Every other educational facility from kindergarten to grade 12 has full-time staff members,” Rubenzahl said. “Community colleges are a forgotten segment. More than 50% of the students in public higher education attend community colleges, but we get 25% of state dollars. We were dramatically underfunded before we went into this recession. It has exacerbated a difficult situation.”

STCC has adjusted by renegotiating contracts with vendors, using electronic communication to save money on postage, and downsizing by not replacing people lost through attrition.

These strategies, along with a 6% increase in student fees this year, has allowed the college to maintain its ground. “Our fees are much greater than our tuition,” Rubenzahl said. “At one point, Massachusetts was one of the least expensive places to obtain higher education in the nation. Now we are in the top 10 or 15. But the value we provide to our students and to the community is very high, especially in this economy.”

Many adults have returned to school to get advanced degrees or a degree in a field in which they can establish a new career. STCC’s Nursing program has increased enrollment by 25%, and its Computer Science program is in high demand.

This summer, STCC had to close applications to its Mechanical Engineering Technology program for the first time due to high demand for seats. “It’s a bellwether that’s indicative of what is going on,” Rubenzahl said. “A few years ago, this program didn’t have a strong enrollment.”

The school’s operating budget is $42 million. It lost about $5.6 million last year, but replaced it with federal stimulus money. However, that amount didn’t reflect the increase incurred due to state cuts in employee benefits, which brought the loss to about $7 million.

“We have been able to deal with that, but the bigger problem is next year’s cuts,” Rubenzahl said. “The Board of Education is recommending a 22.5% cut to all colleges.”

They are using that number to plan for the future. “But there’s only so much we can do. We have gotten some grants and are trying to reduce expenses, but all colleges are looking at a very significant increase in student fees,” Rubenzahl said. “We are all in the same situation, and we are very concerned about fiscal year 2011.”

Holyoke Community College

Holyoke Community College also suffered a dramatic decrease in state appropriations last year. But it was able to compensate as its enrollment increased by 14% and it raised fees. Students had paid $6 million in fees at the start of 2009, and today, that amount has risen to $19 million.

“Students are now paying for 47% of our budget,” said HCC President William Messner. “We are operating more and more like a private institution that relies on student revenue and less and less like a state institution. The state is no longer picking up the lion’s share of the cost.”

It is impossible for the college to continue with a growth rate of 14%, he explained. “We don’t have the room, so the growth is not sustainable. And if our students continue to be the major shareholders, we will have to continue with hefty fee increases, which is at odds with our mission. We are supposed to be affordable, and there is a high percentage of people who can’t afford the ever-increasing fee rates.”

Still, HCC is one of the three least expensive community colleges in the state, and it has accommodated its increased population by adding four new faculty positions. “We hope to add four more next fall, and we have also done some very limited hiring in critical areas,” Messner said. “The Financial Aid office has been overwhelmed, so we have added a finanicial-aid officer.”

Part-time faculty have also been hired to teach in the evening and online programs, he continued, “ but we do not want to continue that pattern.”

Class offerings have also expanded, but, again, students have picked up the cost. The school received $3 million in stimulus funds, but Messner said the majority was used for strategic investments in infrastructure. “We installed more-efficient lighting and heating and tried not to backfill, because that money comes to an end this year,” he said. “If all we did was replace state dollars with stimulus dollars, there would be a bigger hole in our budget next year. Our student-support areas — admissions, advisors, and financial aid — are under real stress.”

The enrollment spike is made up of students entering directly from high school. “It’s a pattern we have been seeing for the last three or four years as high-school students increasingly look to community colleges nationwide for their higher-education involvement,” Messner said.

Their numbers have been supplemented by adults seeking more education or additional training. “The two have merged and blown the top off of enrollment,” Messner said, adding that he expects the increase to taper as the economy improves. “What will continue to drive our enrollment is younger students. Private colleges in this area cost $40,000 to $50,000 a year, while HCC costs $4,000,” Messner said.

Although budget cuts have been sharp, HCC has no plans to lay off faculty or personnel in core areas. “We have done some small pruning around periphery operations,” he said.

That includes cutting the World Institute for Economic Research program, which the college subsidized for six years. It sells information to businesses and organizations and has operated within the Kittredge Center for Business and Industry.

It has also relocated staff to better serve students. “Given the circumstances, we have fared pretty well,” Messner said. “There have absolutely been stresses, and our staff has worked long and hard due to the increase in our growth. We have converted our tennis courts into parking lots and invested in parking-lot attendents at a cost of $50,000 to $100,000 a year to keep traffic flowing.’

Although the times demand “extraordinary measures,” Messner believes the future is bright. “We will get through this and may even come out stronger,” he said, if state officials do their duty. “The state needs to take a long, hard look at how it supports higher education. The only real resource Massachusetts has is its people, as we are not rich in natural resources. But we are people-rich, and we need to mine that resource and develop it.”