Many students graduating from the University of Wisconsin this week leave campus with potentially crushing levels of student loans.
Nearly three-quarters of in-state students attending Wisconsin’s public universities take out loans, totaling an average of more than $27,000 of debt, according to the most recent figures. The average amount for University of Wisconsin students taking on debt has climbed 35 percent since 2002, even after being adjusted for inflation.
That increase in debt for new UW graduates is caused in part by tuition hikes and decreases in state support for the state’s university system. The state budget passed last year increases in-state tuition for undergraduates by 5.5 percent for two years in a row, and freezes financial aid.
But the tuition increases in the most recent budget are nothing new. Over the last 20 years, tuition at UW-Madison has risen at an average rate of 4.9 percent per year, not counting increases due to inflation. Read more
Seldom has there been stronger public support for the notion that higher education is a critically important route for achieving the American Dream. A recent study by the Pew Center on the States reports that Americans believe access to a quality education is the most important way the government can help people get ahead.
Despite that public support, the future of federal subsidies for student loans is at risk, and the student loan interest rate could soon double to 6.8 percent – compounding the problems caused by state-level cuts in funding for higher education and student financial aid. Although both parties in Congress have said they want to maintain the lower interest rate, they remain very far apart on how to find the $6 billion annually to continue the loan subsidies.
The Joint Finance Committee (JFC) met yesterday and voted 12-4, along party lines, to approve $123 million of cuts from agency budgets recommended in late December by the Administration (DOA). Unfortunately, this is just the latest chapter in an ongoing series of cuts recommended by the Walker Administration and then okayed by the JFC, without public debate or a vote in the full Legislature.
As we noted in a previous blog post, the funding that is being cut and lapsed to the General Fund adversely affects a wide range of agencies, and some of the cuts are shifted onto local governments – such as the substantial hit to county juvenile justice programs through the cut in Youth Aids. Also lapsed to the General Fund is the federal performance bonus funding awarded to the state for the success of BadgerCare. That $24.5 million will now be used to offset the General Fund deficit, rather than being used to help close the Medicaid shortfall, and thereby avoid some of the proposed policy changes that are expected to sharply reduce participation in BadgerCare. Read more
University of Wisconsin students will take longer to graduate, run up more debt, and have less access to high-need programs, University officials say. The reason: A state budget that requires the UW System to shoulder a disproportionately large share of the cuts.
The state’s two-year budget that passed last summer cut state support for the UW System by about nine percent, much larger than cuts made to other areas of the budget. In comparison, state support for prisons and other correctional services was cut by only about two percent. The state budget also paved the way for a 5.5 percent UW System tuition increase in each of the next two years, and froze the amount of tuition assistance available.
Now the state is once again making deep cuts to the UW System. The budget directed the state to find new, unspecified savings (also called funding lapses), on top of the specific cuts included in the budget. Read more
UW System and Children’s Programs Hit Hard by Lapses Announced Today
This afternoon the Walker Administration announced its plans for lapsing $123 million to the General Fund. (I wonder why news like this so often comes out late on a Friday before a big holiday?) The biennial budget requires the Department of Administration to allocate $174 million of lapses, and today’s announcement covers just the first fiscal year – meaning that there will be at least $51 million in additional lapses sometime during the next 18 months.
The biggest hit is to the UW System, which has to give back $46 million. Several programs for children and youths are also absorbing substantial blows. The lapses include almost $18.6 million from federal bonus funding for children’s health care, $8.3 million from the Department of Children and Families (DCF), and about $4.7 million from juvenile corrections (primarily Youth Aids).
In a press release this afternoon, Rep. Read more
In 2011, the Legislature made many ill-advised budgeting decisions, decisions that will have long-term negative effects on Wisconsin’s ability to create family-supporting jobs. The Wisconsin Budget Project takes a look back at 2011 to identify the five worst budgeting ideas of the year.
#5: Shortchanging our economic future
A well-educated workforce is critical to laying the groundwork for the state’s economic future. We should be committing resources to building our educational system, to ensure that the children of today will be productive workers in tomorrow’s economy. Instead, the Legislature made very deep cuts to K-12 education, so deep that Wisconsin has the unfortunate distinction of cutting more education dollars per student than almost any other state in 2012. That’s no way to build future prosperity.
#4: Tax cuts that primarily benefit corporations and the well-off
The Legislature prioritized tax cuts over investing in Wisconsin public education, transportation, and safe communities. Read more