Posted February 05, 2024
By Matt Insley
Crisis On Campus
We’re back on the subject of student-loan forgiveness, with Susan R. writing: “Like many others, I believe it is morally wrong to pay off student loans as some students worked through college and lived at home, others already paid off their loans and others chose not to go to college because of the cost.
“If Biden really cared about education and not just buying votes, he would come up with ways to reduce the cost of college such as subsidized community college. In the UK, the government limits the amount colleges can charge up to approx. $11,500 per year and still receive government subsidies. So, of course, all universities charge this maximum – from medical and law schools, Oxford and Cambridge to the lowest-rated local colleges. Anyone could pay off student debt if it was this low.
“I also wonder how many students did what several of my daughter’s friends did. They were from well to do families and had no student debt when Biden got elected in 2020. So they went out and got themselves $10,000-20,000 in loans as they figured there was a chance Biden would pay them off.
“Thanks to the COVID student-loan pause, they have not even had to pay interest on these loans! If others were going to get free money, so were they. And why not? If the government is giving away money to some people, it makes sense to make sure you are one of those people!”
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Your Rundown for Monday, February 5, 2024...
Tightening the Belt
Several major public universities recently announced significant budget cuts for the 2024-2025 academic year and beyond. These universities cite declining enrollments and other financial pressures as reasons for the cuts.
- Penn State University plans to reduce spending by $94 million starting in July 2025
- University of Connecticut — anticipating a $70 million budget deficit — will make 15% cuts to operating budgets across the board over the next five years
- And the University of New Hampshire aims to cut $14 million in expenses.
Although the COVID-19 pandemic brought temporary relief funds, that support is ending. Now administrators must make difficult decisions to balance budgets.
However, not all cuts are equal.
Diversity initiatives, for example, remain protected from cuts at many schools even though they are non-essential. UNH, for example, will trim its Center for Equity, Justice and Freedom but maintains over $1 million in diversity staff salaries.
Understandably, university leaders want to avoid cuts and have asked state legislatures for more funds, but permanently increasing state subsidies enables overspending.
Not only that, past state funding decreases do not fully explain skyrocketing tuition rates.
“As for increasing tuition, a National Association of Scholars report found that even as state funding per student decreased by nearly $4,000, public universities increased tuition by almost $14,000 per student,” says an article at Reason.
“State funding decreases alone do not come close to explaining tuition increases. What does explain the increase in tuition is the rapid increase in university expenditures. This is why implementing budget cuts is crucial.”
What do you think, reader?
Do you believe responsible budget cuts could refocus universities on their core mission: affordable, high-quality education?
With thoughtful fiscal discipline, could higher education get back on stable footing?
Market Rundown for Monday, Feb. 5, 2024
The S&P 500 is down 0.20% to 4,950.
Oil is barely in the green; a barrel of WTI is priced at $72.30.
Gold down 1% to $2,018 per ounce.
But Bitcoin is up 1.5% to $43,365 at the time of writing.
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