LIHU‘E — Republicans defied a presidential veto threat and the U.S. House of Representatives voted Friday to prevent federal student loan interest rates from doubling. In the unlikely event that the measure isn’t stillborn, it could lessen the blow for
LIHU‘E — Republicans defied a presidential veto threat and the U.S. House of Representatives voted Friday to prevent federal student loan interest rates from doubling.
In the unlikely event that the measure isn’t stillborn, it could lessen the blow for Hawai‘i college students whose tuition is about to increase.
The Associated Press called the measure’s 215-195 passage “largely symbolic” because the package is going nowhere in the Democratic-dominated Senate. Both parties agree student loan interest rates should not rise, but they are clashing over how to cover the $5.9 billion price of keeping rates at their current level.
Both parties want to show they are trying to help college students and their families cope in today’s unforgiving economy, says AP, and whenever possible, force their opponents to cast votes that might create fodder for TV attack ads.
While Washington engages in party politics as usual, students face both immanent increases in debt and higher tuition levels.
Kaua‘i Community College’s tuition has nearly doubled since the 2005-2006 school year, from $49 to $97 per unit, and will continue to increase another 34 percent to $130 per unit over the next four years.
Administrators at the University of Hawai‘i, which sets KCC’s tuition, said they attributed the increase to deep cuts in public funding.
The federal government reduced state funds for colleges by 23 percent, adjusted for inflation, during the last 10 years and increased federal student loan funding by 57 percent, the AP reported in October. College tuition, meanwhile, has risen nearly 6 percent faster than the standard rate of inflation.
“Since 2009, we’ve lost $86 million in annual state funding, and it’s increasingly clear that public higher education may never be funded at the level it once was with public dollars,” Jodi Leong, UH Director of Communications, said in a Wednesday email.
“We had a stable tuition schedule in place for the past six years that expires at the end of the 2012 academic year, which is this semester,” Leong said. “When approved by the UH Board of Regents in 2005, this tuition schedule was designed to allow the university to address priorities in its strategic plan and mission, including Native Hawaiian initiatives, workforce and economic development needs, infrastructure requirements and enrollment growth.”
KCC’s enrollment has increased by more than 300 students over the last five years, she said.
“The Board of Regents recognized that the tuition increases needed to be modest given the current economic conditions,” said John Morton, UH vice president of Community Colleges, in an email Wednesday.
Pell Grants at KCC increased from $420,000 to $1.5 million per year during the last four years, he said.
“UH scholarships for Kaua‘i CC students grew from $150,000 to $300,000 last year,” he said. “While tuition was doubling, the number of tuition scholarships for Kaua‘i CC students was increasing four-fold. The UH also receives about $100,000 in private scholarships and additional support for Kaua‘i CC students through VA benefits and other third-party supporters of students. Kaua‘i CC students received a total of about $500,000 in loans last year.”
Cammie Matsumoto, KCC Director of community relations, said that in 2011, KCC distributed $1.3 million in financial aid and scholarships to students, the highest amount across the UH system.
Student loan debt last year reached $1 trillion nationally and now outpaces credit card and auto loans in the U.S., as students take on higher levels of financial aid to meet higher tuition costs.
Some economists have expressed concern that the heavy debt burden could cause an economic slump as income-challenged grads put off major purchases such as homes.
Consumer Financial Protection Bureau officials say student debt is rising for several reasons, including a surge in Americans going to college to escape the weak labor market and tuition increases, the Wall Street Journal reports.
Other reports released earlier this year state half of recent college grads are underemployed or jobless, and one in four carry a past-due student loan balance.
In 2005, congress passed a law to prevent students from discharging student loans made through private lenders. Then, interest rates were lowered and student funding levels were increased as the federal government scaled back state funding for colleges. When the recession hit in 2008, special programs were created to encourage displaced workers to enter college for retraining programs, and enrollment levels surged across the country.
Some argue the formula has created an “education bubble.”
However, unlike underwater homeowners, students can’t simply walk away from their debt obligation by mailing their degrees back to the bank or filing for bankruptcy. Students who don’t pay on their loans face severe penalties, aggressive collectors and wage garnishments.
Asked if there is a correlation between increases in lending and increases in tuition, a statement from UH administrators said, “There is no official measurement on this and therefore no connection that we can confirm.”
The Consumer Financial Protection Bureau plans to release a student debt study this summer.
• Vanessa Van Voorhis, staff writer, can be reached at 245-3681, ext. 251, or by emailing vvanvoorhis@thegardenisland.com.
