Thursday, June 2, 2016

Ky. cuts to higher ed budgets will lead to hikes in student debt - JOHN ROBERTS, Lexington Herald Leader

Normally, a budget cut by the state would lead to colleges and universities cutting spending and programs, but in the era of student loans, this is not completely necessary. Student loans are freely available and will be for the foreseeable future, which means that anyone who wants to go to college can “afford” it. When an institution of higher education is faced with budget cuts, they have perverse incentives to raise tuition instead of making cuts. The loans ensure payment to the institution is guaranteed by the federal government. Colleges and universities get their money either way. Meanwhile, students are saddled with an ever-increasing burden of debt. As tuition rises, students are forced to take out ever larger loans. This is the real danger of Bevin’s cuts. They make college more expensive without giving students the incentive to seek another, less expensive path.

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