Once unheard of on college campuses, cost reduction initiatives increasingly commonplace The growing burden of student debt in the U.S. is prompting many universities to scrutinize cost savings initiatives and spending projects, The New York Times reports.

The financial and housing crises that sparked the most recent recession underscored how bubbles can impose far-reaching economic consequences. The U.S. has experienced only tepid economic growth in the wake of the worst economic contraction since the Great Depression, and cash-strapped states are still struggling to remain solvent as they contend with a drop in tax revenue and moderate GDP expansion.

Federal and state lawmakers have therefore championed an array of cost reduction initiatives in an effort to reign in what some officials have dubbed "runaway spending." Runaway or not – and there are most certainly examples of fiscal mismanagement at the government level throughout the U.S. – some of those campaigns have affected publicly funded universities.

E. Gordon Gee, the president of the Ohio State University, is a veteran of academia, and he is warning about the potential dangers associated with the precipitous uptick in higher education costs. Certain state governments have cut funding to their flagship universities by more than 20 percent over the past few years. While they often reduced money tp nearly all government-backed organizations, the effects of such cutbacks could be dire to the nation's education system, experts warn.

U.S. student debt has jumped to more than $1 trillion, and that has prompted a number of economists to study whether such an exceedingly high debt burden could potentially hamper a sustained recovery. While many schools contend they have little choice but to offset the reduction in funding onto prospective and current students, Gee noted such a strategy is doomed to fail.

"The notion that universities can do business the very same way has to stop," he said.

Gee has a unique perspective on the subject, owing to his long career as a school administrator. He currently chairs a commission studying the growing burden of student debt.

Universities and nonprofit schools are increasingly behaving like businesses as they look toward a future where their ability to simply raise tuition no longer exists. Even now, experts contend, mounting debt loads are preventing many students from pursuing a college degree at certain institutions, especially if they could potentially get a better deal at another school.

Universities are mulling layoffs, privatizing certain divisions and increasing private fundraising, among other solutions, but some experts warn unless they move quickly, the next major bubble in the U.S. could be higher education.

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