LSU drafting 'academic bankruptcy' plan in response to state budget crisis

http://www.nola.com/politics/index.ssf/2015/04/lsu_academic_bankruptcy.html#incart_river

LSU and many other public colleges in Louisiana might be forced to file for financial exigency, essentially academic bankruptcy, if state higher education funding doesn't soon take a turn for the better.

Louisiana's flagship university began putting together the paperwork for declaring financial exigency this week when the Legislature appeared to make little progress on finding a state budget solution, according to F. King Alexander, president and chancellor of LSU. 

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Moody's Investors Service also announced this month that it was lowering LSU's credit outlook from positive to stable based on concerns about the university's overall financial support. The lowering of LSU's credit rating makes it more likely the university will have to pay more for its building projects in the future.  

Being in a state of financial exigency means a university's funding situation is so difficult that the viability of the entire institution is threatened. The status makes it easier for public colleges to shut down programs and lay off tenured faculty, but it also tarnishes the school's reputation, making it harder to recruit faculty and students. 

"You'll never get any more faculty," said Alexander, if LSU pursues financial exigency. 

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The rest of the article details the disaster that the Republicans are creating for Louisiana. Large companies don't like relocating to states with crappy higher education.