Governor to Seek ANOTHER 30% funding cut for Penn State (Philly Inqu.)

Colleges and Universities A-Z Penn State
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<p>Correction: Before Corbett’s budget cuts, PA. averaged 39th in the US in funding per public college student. We will soon be in competition with Montana and a couple other states for last place.</p>

<p>The charts in the following document show that even BEFORE Corbett’s cuts, PA had experienced big cuts in average spending per student during the previous five years. Part of the problem is that state funding had stayed the same, while inflation increased and the numbers of students increased, particularly in community colleges. </p>

<p><a href=“http://www.sheeo.org/finance/shef/SHEF_FY10.pdf[/url]”>http://www.sheeo.org/finance/shef/SHEF_FY10.pdf&lt;/a&gt;&lt;/p&gt;

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<p>Just curious-- I don’t see how the average student debt is $33K, not including the parents’ loans. According to CollegeBoard 25% of students do not apply for aid. That would mean the average of those with debt must be considerably higher than $33K. If the maximum Stafford Loan total is $31K, where are these students taking out thousands of dollars in unsecured loans?</p>

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<p>I believe the collegeboard numbers of students who apply for aid is for people seeking Penn State aid. There are probably many people who don’t apply to Penn State for aid who get subsidized or unsubsidized Stafford loans. Many people don’t seek Penn State aid because they know there is so little available.</p>

<p>In addition, with $33,000 of loans, that exceeds the approximately $24,000 of subsidized stafford loans that are available to most students over 4 years. That means they have to take out unsubsidized loans in which the interest starts to accrue and compound immediately while in college.</p>

<p>Some families with good credit and lots of home equity found that could get lower interest rates with home equity loans than stafford loans.</p>

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<p>[Corbett</a> changed business tax rules on his own, costing PA. $200 million in business taxes - Democratic Underground](<a href=“http://www.democraticunderground.com/1074616]Corbett”>http://www.democraticunderground.com/1074616)</p>

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<p>The maximum for all Staffords is $31K. You said your numbers “typically do not include any debt in the parent’s name” so home equity loans would be irrelevant.</p>

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<h2>Good catch, 1moremom.</h2>

<p><a href=“http://pennbpc.org/sites/pennbpc.org/files/Budget-Summit-2012-PBPC.pdf[/url]”>http://pennbpc.org/sites/pennbpc.org/files/Budget-Summit-2012-PBPC.pdf&lt;/a&gt; </p>

<p>The link is to a really informative set of slides about Corbett’s proposed budget and trends, from a budget summit held this week by the PA. Budget and Policy Center.</p>

<p>Some highlights: </p>

<ul>
<li><p>If Corbett’s budget is approved, PA. will be spending twice as much on prisons as on higher education.</p></li>
<li><p>Most sources of tax revenue to PA. have recovered to pre-recession levels - except real estate transfer taxes (because of the weak housing and construction market) and corporate taxes. This reduction in corporate taxes occurred because:</p></li>
</ul>

<ol>
<li>one corporate tax rate has been reduced each year (including this new budget year, which will cost ANOTHER $250 MILLION),

<ol>
<li>corporate loopholes have not been closed, including the loophole that lets PA companies funnel profits through Delaware, and</li>
<li>Corbett, on his own, changed business depreciation rules in 2011 that cost PA. $200 million. Therefore, the reduction in state revenues has really been a “Corbett-inflicted wound.”</li>
</ol></li>
</ol>

<h2>- If Corbett’s budget is approved, funding of public universities will have been cut by one-third in 4 years. I wonder why tuition increases?</h2>

<p>The University Presidents stressed they do not want to become private - but Corbett’s budgets are forcing them in that direction. </p>

<p>Why should they offer a big subsidy in tuition to in-state students if the State is not providing them with funding? They might as well increase the tuition to $26,000 or more per year for everyone. Pitt and Penn State could fill their classes at their main campuses with students paying $26K a year (plus room and board) if they wanted to - especially for high demand majors such as business, sciences, nursing and engineering. However, out of state students will not pay for branch campuses - so if funding is removed, many of them could be shut down. </p>

<p>Corbett and his advisors have said several times that he would like to eliminate all state funding to state-owned and state-related universities, and instead just offer need-based grants to students to attend any college. It is basically a voucher system. However, he is also cutting those need-based grants.</p>