Last week, Bill Schackner, a reporter for the Pittsburgh Post-Gazette, wrote the first article in a two part series, entitled, “The Other College Debt: Upgrades put Pennsylvania schools in a bind,” which takes a serious look at State System universities and their spending priorities.
The focus of the article is not academic buildings, instructional costs, or salaries for faculty and staff. Instead, Schackner explores the mounting debt assumed by university affiliates and paid for by students and their families.
The article points out that while tuition has increased 50 percent since 2000, student fees have increased almost 120 percent. The reason? Universities are using revenue from student fees to pay for upscale residential suites, dining halls, and student centers. To fully fund these projects, the university affiliates have taken on a combined debt of almost a billion dollars.
Most of the debt is placed squarely on the shoulders of the students, who in turn take on additional student loans and go deeper into debt to pay for amenities. And when affiliates can’t pay for these projects, the university itself and the State System must use Educational and General Fund dollars – the money that should be going to student instruction – to pay the debt service.
The collective total debt for PASSHE schools now sits at $2 billion.
It all prompts the reporter to pose the question on all of our minds: “Where’s the oversight?” Why does the State System allow the individual universities to take on debt that they may not be able to afford?
The State System says that the universities are autonomous, limiting the ability for PASSHE to oversee spending by the individual institutions, but shouldn’t there be a balance between university autonomy and State System control? Especially when Moody’s considers the debt assumed by the university auxiliaries to be part of PASSHE’s debt obligation, shouldn’t the Chancellor have some knowledge of what projects campuses are financing, and how they are financing them?
As the head of a state agency, the Chancellor has an obligation to the citizens of the Commonwealth to understand how the universities under his authority are financing campus projects.
The universities are not taking on new debt for classrooms and labs, but for attractive amenities meant to draw prospective students. Most of the projects cited in the article – dining halls, dorms, and student rec centers – are not essential to PASSHE’s core mission of providing a quality education at an affordable cost to students. The Chancellor should take responsibility to ensure that debt obligations assumed by the universities under his watch – and their affiliates – meet the State System’s mission.
Instead, we’re all left wondering: where is the oversight? Where is the Chancellor?