Money, honey -- Where does it go?

 

At a recent Livingston Campus Center teach-in, Joel Salvino did not mince words about the politicians who have slashed education funding through times of boom as well as bust. “These are the same people who . . . call us lazy, or entitled, then bore us with their stories of how they paid for school," said Salvino, a Senator of the Rutgers University Student Assembly (RUSA)

"I have been lectured many times -- and they are wrong. When they were in school, government paid for education. School was heavily subsidized because it was seen as an investment in the future.”

As education budgets across the nation are put on the chopping block, members of the RUSA members partnered with the Rutgers Student Union (RSU) and university staff, unions, and administration on November 15th, to deliver their message outlining the impending national crisis in education and student debt burden.

RUSA members outlined the effects dwindling state funding has had on the cost and quality of education at Rutgers University. Government funding, which used to be 60% of the public university’s budget now accounts for less than 20%.

 

The shortfall is covered by tuition and private donations, giving outside donors more power to direct university spending.

 

John Aspray, the Busch Campus Council Legislative Affairs Chair, pointed to the new football stadium (finished tens of millions of dollars over-budget) and the Busch Visitor Center as examples of multi-million dollar projects unrelated to the University’s academic mission, paid for in small part by outside donors.

At the same time, federal and private loans have kept pace with the lost state funding and rising tuition, and with it has grown student debt.

One presentation likened the student-debt bubble to the recent housing mortgage bubble, “where in the latter there are unethical private entities preying upon deficiencies in the system, in the former the system itself is entirely geared against students. The problem is not a deficient system but a ‘wrong’ system.”

The Bankruptcy Reform Act (1978) is one example of how the rules have gradually changed to make college debt a lifelong burden. In its original form, the law precluded graduates from discharging their debt through bankruptcy during the five years following the first loan payment,

But the timeline was increased to seven years in the early '90s; followed by a 1998 expansion of the restriction, so that federal student loan debt can no longer be discharged by bankruptcy. In 2005 the same  ‘protections’ were extended to private student lenders, making all student loan debt impossible to discharge via bankruptcy.

Students have since lost the protection of a Statue of Limitations on collections, the Right to Refinance, and are not guaranteed the Fair Debt Collection Practices Act nor Truth in Lending, according to the same RUSA presentation.

“The essential point is that Congress has legally declared open season for private lending institutions to prey on students,” said RUSA Senator Bhav Patel.

 

“Student-debt is inescapable and permanent. Moreover, the system is such that private entities are guaranteed returns without risk: if a student does default on loans then the federal government assumes the debt and pays that institution what the student owed it, and then holds the loans almost as a lien against the student. The student remains a debtor, the bank makes a profit, (and) the cycle continues.”

 

The young education advocates connected these growing private loan trends and mounting student debt to lost opportunities. Debt acquired early in life means less money for car and home purchases, for pursuing a rewarding career, or for continuing education. In a survey distributed by the Rutgers governing body, fully 80% of responding students said they were planning to move back home after graduation for economic reasons.

The Teach-In has been the biggest RUSA event since campus progressives from RSU and Tent State University swept university elections in the Spring and Fall of this year on the Rutgers United slate. But the Student Assembly and Senate plans to hold more events to educate their peers on the true cost of Higher Education.

“The goal is to motivate new people to join an active movement to make college affordable for the future” says RUSA Vice-President, Matt Cordiero.