COMMENTARY | California State University announced yesterday its plans to freeze enrollment next spring and wait-list all students the following fall due to budget uncertainties. They are receiving criticism for this decision partly because it appears to be a ploy to force voters to pass the next tax increase on the November ballot. (Read article here). The university is trying to deal with $750 million in funding cuts that went into effect this year, and is preparing for another $200 million cut next year if the ballot doesn’t pass.
As a college student myself, I feel for the students denied enrollment into a university that has campuses all over California. Once an individual is ready for that step, any postponement can cost someone a dream and permanently derail their goals.
That being said, I have also seen certain things on campus that concern me. I feel like the universities and/or community colleges are riding the wave of an enrollment bubble that is going to burst just like the housing bubble did in recent years. Enrollment has exploded in my local community college and I get the feeling a large number of people are in it only for the money they receive through student loans. The first week of term, seats and classes are at a premium; once the checks come out class numbers decline until the term ends with only a third of the class it began with. I have seen this frustrate people who get turned away by over-filled classes, knowing in another week a place will open up once the checks arrive.
Many of the people I see taking classes and receiving assistance are not the run-of-the-mill college students and their attendance and participation indicate an inability to be driven enough to pay back a sizeable student loan. Sadly, I predict many of these people will default on their loans. What happens to the colleges and universities when the lending institutions can no longer lend? I know there are certain protective mechanisms in place to protect student loans (i.e. they cannot be written off due to bankruptcy), but if someone just cannot, or will not, pay I perceive a disastrous slide for colleges.
A new federal report has found that 1 in 4 borrowers are likely to default on their loan. The current amount owed in student loans is $870 billion, which is more than American credit card debt or car loan debt (reuters). As we get reminded of on a fairly regular basis, the federal government can’t afford to pay its own bills, let alone ours.
So, what are my feelings regarding California State Universities decision to freeze enrollment? I think it may be a good idea. The banks received a lot of criticism for not reigning in their mortgage loans before they got in over their heads. Perhaps the University has learned its lesson from recent casualties and is trying to ensure they survive the next burst bubble. At any rate, their proposed freeze is a year away; a lot can happen in a year.
Source:
http://latimesblogs.latimes.com/lanow/2012/03/csu-enrollment-freeze-tell-us-what-you-think.html
http://www.reuters.com/article/2012/03/08/tagblogsfindlawcom2012-lawandlife-idUS11429201120120308
