College Students Majoring In Debt

Although most of them don’t know what it’s for, Georgia’s college students are paying a “special institutional fee” that can exceed $1,000 a year.

The fee was supposed to end this summer, but University System Chancellor Hank Huckaby told the AJC last week that it will continue next year and probably beyond. The reason: It brings in $210 million a year.

The story of the special institutional fee is the continuing story of the University System of Georgia: The economy may be in a downturn, but the state’s colleges are on an upswing, and students are paying for much of it.

Spending has gone from $5.4 billion in 2007 to a projected $7 billion this year, and is expected to continue to climb next year. Tuition and fees at many schools have doubled since the fall of 2005, hitting close to $10,000 a year at the University of Georgia and Georgia Tech.

Since taking office in July, Huckaby has been seeking ways to control spending amid cuts to the HOPE scholarship, an outcry from students that they can no longer afford a college education, and open frustration voiced by lawmakers.

Those same lawmakers, who have griped for years about excessive college spending, are nonetheless set to increase University System funding by $120 million and double what the state borrows for campus construction.

It all has parents and students worried about how they will afford college.

Gwinnett County parent Laurine Eidson said that even though her daughter, Lindsey, will receive the HOPE scholarship at Georgia Tech this fall, they still will need to come up with thousands of dollars a year.

“I have a great fear about how we’re going to pay for it,” Eidson said. “I expect we’ll have to take loans. I’ll sell the paintings on my wall if I have to.”

For their part, college presidents said they have increased class sizes, reduced the number of course sections offered, eliminated open positions and held off on maintenance and new technology to absorb cuts in state spending. They note that they’ve made these cuts while teaching record numbers of students.

A decade ago, the state paid 75 percent of the cost of educating a student. Today it covers 54 percent, with students and their parents picking up most of the rest.

Even Huckaby concedes that the task of controlling costs in the sometimes unruly University System — 35 schools, 318,000 students and 42,000 employees — is enormous.

“I think costs will go up,” he said. “I think what we are trying to do our very best is moderate the rate of increase.”

Even as legislators have publicly criticized spending by the University System, the system has publicly complained about deep cuts by the Legislature. While overall university spending has gone up, state support has dropped from $2.1 billion in 2008 to $1.7 billion this year. It will increase to more than $1.8 billion under the budget being considered by lawmakers.

Unlike most other agencies in state government, however, universities have other ways to raise money. Much of the system’s money now comes from tuition, fees and grants.

In a six-part series last year, the AJC tracked the higher costs of higher education, finding that, despite the poor economy, University System spending was rapidly rising: more money for more deans, vice presidents and other administrators, plus skyrocketing student fees and campus construction. Those trends continued during fiscal 2011, according to University System data analyzed by the AJC.

For example, the amount spent on deans and vice presidents — from the year before the recession through June 2011 — jumped by more than a third, the analysis found. The number of deans listed in the state’s Open Georgia website increased from 278 to 397 during that period, and vice presidents went from 130 to 217.

In addition, while most of the system’s 42,000 employees haven’t received a raise since shortly after the start of the Great Recession, the AJC found that top administrators are getting top pay. UGA President Michael Adams, for example, saw his pay package jump $50,000, to $660,318, this school year. Two other presidents — Albany State’s Everette Freeman and Fort Valley State’s Larry Rivers — also got raises so that their total compensation increased from $198,456 to $225,000.


Among Huckaby’s plans for saving money: he slowed the approval of costly new academic programs; announced plans to merge eight colleges into four; called for a review of how the system uses existing classroom space; and continues to take part in an overhaul of how the state funds colleges. The aim of the latter effort is to create incentives based on how students perform rather than simply providing money based on enrollment.

While Huckaby said he’s pleased with the progress, he acknowledges it’s just a start.

“This is a complicated system with a lot of moving parts, some not moving as well as we would like,” Huckaby said.

The chancellor also wants to slow campus construction, a rapidly rising expense in the past decade. The state borrows over 20 years to pay for new academic buildings, and Huckaby said $400 million in projects already are designed and ready to build.

But cutting back won’t happen this year. Gov. Nathan Deal recommended $235.6 million in construction for next fiscal year — including a $59 million biosystems building at Georgia Tech and a $52.3 million vet school center at UGA. The state House already has added another $50 million worth of projects, and the Senate likely will tack on a few more.

In addition, the House will be taking up a bill already approved by the Senate that would raise the cap on borrowing for so-called private-public projects — such as dorms and student centers — from $300 million to $500 million.

Sen. Bill Heath, R-Bremen, said he worries the new cap will increase the financial burden of students, who will help repay what’s borrowed. “Costs are skyrocketing,” he said. “It falls on students to pay for all of this.”

Sen. Cecil Staton, R-Macon, who sponsored the new cap, said students are willing to pay for the new facilities.


Dan Papp, president of Kennesaw State University, which is raising money to start a football program, said schools compete for students.

“Students expect more. You need to deliver what the students expect,” he said. “If you don’t provide what they need, they will go somewhere else.”

For example, Kennesaw State broke ground in October on a $26 million residence hall scheduled to be finished in August.

The complex will have 1,282-square-foot apartments with four bedrooms with private bathrooms, a kitchen, living room, washer/dryer, a balcony and, of course, Wi-Fi.

The project is financed by the school’s foundation and the bonds will be repaid with student rent.

Freshman Joshua Beane, who lives on campus, picked KSU because it was cheaper than the University of Georgia. He says he doesn’t mind paying new fees to build a football program and to expand the college’s recreation park and wellness center.

“Those things are OK because they’re fun and when you’re studying and working hard, you need to just have a way to blow off some steam,” Beane said. “We need a football team, so we’re all OK paying for that, too.”

Many states continue to slash college funding. In Florida, for instance, the Legislature has agreed to cut the state’s support for higher ed by $300 million.

But not in Georgia. Here, lawmakers are debating whether to add $120 million to next year’s higher ed budget, largely to pay for growth in enrollment.

That increase, if enacted, still won’t necessarily keep the system from raising tuition and some fees.

The “special institutional fee,” which was approved during the recession to help make up for budget cuts, was supposed to end this year. Huckaby said it won’t, although the Board of Regents eventually would like to do away with it. The fee has skyrocketed. Georgia Tech students paid $100 a semester in January 2009. Now they pay $544 a semester.

The problem, Huckaby said, is that the system can’t give up the millions the fee brings in.

“We can’t afford to take a $210 million hit right now,” he said. “The ultimate goal would be to eliminate that or come close to eliminating that.”

Students may support — or at least tolerate — fees for things they can see, such as campus bus lines, gymnasiums, recreation and health care. But they are frustrated with the special institutional fee, which is not earmarked for any special purpose but flows into a school’s operating budget.

“It’s like the fee is hidden because we really don’t know how it’s being spent,” said Kevin Vantrees, president of the Student Government Association at Abraham Baldwin Agricultural College in Tifton. “We can see how other fees are used around campus, but we just have no idea if this is being spent well and it’s costing us a lot of money.”

Students, struggling to afford college and afraid to take on more debt, are working more hours and looking for second and third jobs, said Ronald Wilson, student government president at Kennesaw State. “How can we succeed when time is used working instead of studying?” Wilson said.

Georgia State University officials said they saw a 116 percent increase in the number of fall students who didn’t return for the spring classes they’d signed up for. The dramatic increase was caused by higher costs and the combined hit of cuts to HOPE and some federal aid programs, said Tim Renick, Georgia State’s associate provost for academic programs.

“This shows just how much these financial decisions are hurting our students,” he said.

Vantrees, who is on a higher education funding commission with Huckaby, said the chancellor acknowledges that many students are barely hanging on.

“I get the impression he wants to do something to help but I think they’re still trying to figure that all out,” he said.

Rep. Bill Hembree, R-Winston, former chairman of the House Higher Education Committee, has long been a critic of University System spending. But like a lot of legislators, he is willing to give Huckaby a chance to fix the system, especially since the chancellor used to be a member of the House and state budget director.

Hembree has little choice, because the system is constitutionally protected and independent, run by a Board of Regents appointed by the governor. There is only so much lawmakers can do.

“I felt as a legislator, sometimes I was not capable of bringing about change,” he said. “I talked about the need to cut back ... but where did it get us? You can cry from the mountaintop all you want, but you really need somebody on the inside to make a change. That’s why it is refreshing that we have somebody on the inside.”

Hembree said he hopes Huckaby will succeed at containing costs where others have failed. “We will hold him accountable as a legislative body, but we have tried and tried and tried to make changes ... and you can’t.”

The AJC has closely tracked public spending on higher education, publishing a ground-breaking series on the “higher cost of higher ed” In July 2011 and following up with in-depth reports, including this one, ever since.

http://www.ajc.com/news/georgia-government/college-students-majoring-in-1380067.html