Limited higher education subsidies may hurt many students financially

Students attending Kent State have been paying a fixed tuition amount for the past three semesters, thanks to the state-mandated tuition freeze. That could all change after this academic year.

The current condition of the economy may force the hand of state officials to limit its higher education subsidies, potentially resulting in the added financial burden of increased tuition.

Curtis Reynolds, assistant professor of economics, said the current credit crisis is a factor trickling down to students who are trying to get loans to pay for college.

“Banks are now much less-willing to lend to students who are paying for college, or at least they are not lending at favorable rates,” Reynolds said. “They are unsure whether the loans will be paid back, and with the shaky economy, the probability that students are going to find gainful employment to pay back their loans is looking more and more doubtful.”

The imminent end of the tuition freeze has moved an increasing fear of rising prices from the back burner to the front. Reynolds said the recession has caused tuition prices to rapidly skyrocket across the country, except in Ohio.

“Having a tuition freeze is a pretty big deal,” Reynolds said. “It’s not the recession itself that causes pressure on that, it’s that the state has to keep financing the tuition freeze. We might think that tuition is high, but it actually costs three, sometimes four times as much to educate a student for a year at a public university than the student is actually paying. So if you’re paying $10, 000 a year, it’s costing the state $30,000 a year, so they’re subsidizing you dramatically.”

He said students can help themselves by considering federal loans instead of increasingly restricted private loans. He urges students to consider working and saving to stay enrolled in college.

“On average, tuition has been rising anywhere from 5 to 6 percent over the last decade at four-year institutions,” Reynolds said. “Stay in school because the returns on a college degree are extremely high, and the annual return on a college education is between 8 to 15 percent.”

Democratic political philosophy may help

Despite the economic crisis, a stronger Democratic influence at both the state and national level may help students.

“Because of a Democratic president, there may be more support for helping students,” said Christopher Banks, associate professor of political science. “Generally, Republicans move toward stricter accountability in the classroom, with an emphasis on grades K-12.

“As for higher education, there hasn’t been a solid Republican initiative to increase funding. Democrats have initiatives built into the party platform, advocating educational funding for colleges.”

President-elect Barack Obama has plans to reform the nation’s educational infrastructure by placing an emphasis on post-secondary education. His plans to create an American Opportunity Tax Credit, which guarantees to pay for the first $4,000 of college tuition, is supposed to cover two-thirds of the cost of attending a four-year public institution and most of the cost of attending community college. This plan depends on a student’s completion of 100 hours of community service.

While Obama’s plan is appealing to higher education administrators, Banks said he will still face many challenges.

As far as Ohio goes, Banks said the Democratic political influence might improve upon the shape of higher education.

“Governor Strickland’s governorship is staked on educational reform,” Banks said. “The governor has to work with the new majority House in Ohio to push for legislation that will allow more funding. Having a Democratic governor, House Assembly in Ohio and president increases the likelihood of greater funding opportunities for education.”

The university’s initiative

Pete Goldsmith, vice president for enrollment, management and student affairs, said Chancellor Eric Fingerhut has emphasized that in order to assist those students with the greatest need, financial aid would have to increase with tuition.

“Our director of financial aid, Mark Evans, reports that some of the federal programs have increased their levels of support for the first time in years and that we do have borrowers who will make loans to students,” Goldsmith said. “What I fear the most is that students and their families will not believe that a higher education is possible in the current economic environment.

“We are doing all we can to show students and their families how this can happen,” he said, adding that tuition will still be affordable and, of course, a good investment.

Gregg Floyd, vice president for finance and administration, said administrators remain sensitive to the difficulties associated with rising tuition and recognize the sacrifices students and their families are making to invest in an education. The university is making cost-conscious decisions, he said, but not at the expense of the students.

“The president (Lester Lefton) has remained very committed to quality, and so the investment made in an education needs to be of the highest quality,” Floyd said. “An effort to save money in an area that will impact the quality of education is not a good decision, and we’re resisting any temptation to do that.”

Contact student affairs reporter Shantae Rollins at [email protected].