WASHINGTON, D.C. -- Leaders of national educational institutions told Penn State leaders last week that the university is not alone in its financial dilemmas.

At the Penn State Board of Trustees meeting on Thursday and Friday, Peter Magrath, president of the National Association of State Universities and Land-Grant Colleges, and Jay Morley, president of the National Association of College and University Business Officers, said decreased funding from states for public universities is among the challenges facing higher education.

"State and federal support, I believe, will continue to be limited, and major 'A-list' research universities are going to have to be even more entrepreneurial and rely increasingly on private support," Magrath told the trustees.

Morley issued what he called a "wakeup call" to the trustees during his presentation Friday afternoon, saying for-profit universities and other institutions are rising as competition. He said Penn State needs to deal with the future of education as a business.

"Higher education has become an industry," he said. "We do not like to hear this, but it's true."

NACUBO, Morley's organization, advocates for the financial sectors of a variety of colleges and universities, including more than 2,100 private and public institutions. He said the growing industry of higher education will follow the same path as any other industry: Competition will develop rapidly.

Morley used a lily pad analogy, saying that if lilies in a pond double every day, on the 29th day the proverbial pond is half full and on the 30th day it is completely full of lilies.

"All of that be-comes this accumulated lily pad, and by the time you wake up and realize that, you're surrounded by competition," he said.

Because of its size and scope, Morley said, Penn State is confronted by every issue that affects other colleges and universities in the country.

Morley referred to what he called "the current crisis in faculty salary" as just one of the many problems that public universities face. Penn State President Graham Spanier recently said he aims to increase faculty salaries despite cuts in state appropriations.

After Morley's remarks, Spanier stood and addressed the trustees. Like Morley, Spanier said lowering state funding without lowering state expectations or state mandates makes things even harder for Penn State. He said if the university is ever forced to make strictly financial decisions, its land-grant mission would be lost.

"What we could eventually be faced with is a phenomenon where undergraduate (education costs) $10,000 a year and tuition is $12,000, but a portion of that goes to the land-grant mission," Spanier said.

Students would be unable to make sense of paying for the land-grant mission plus regular tuition, he said.

In response to Morley's self-titled "wakeup call," trustee William Weiss told the board he thinks it should spend less time on formalities and more time discussing issues of significance to the future of the university.

"Our time here ought to be spent on these broad issues," Weiss said. "Otherwise, we don't serve a purpose to the university."