Finance

Tech’s increasing tuition could lower federal funding

President Obama’s proposal to keep college affordable could have negative consequences for Tech.

The proposal directly links a college’s eligibility for federal aid programs with its tuitions affordability. The plan will impact $3 billion in federal aid money known as campus-based aid that is used for programs like Work Study.

Under Obama’s proposal, campus-based aid would be raised to $10 billion. This money would then be distributed to colleges and universities, rewarding the schools that maintain tuition costs.

“We are now on the low end of the tuition scale, but it’s based on a percentage,” Claire Stinson, Tech’s Business and Planning vice president, said. “If you have a product and charge a dollar for it, then the price goes up another dollar, that’s a 100 percent increase.”

Tech’s tuition costs have been increasing steadily over the last few years. Under this proposal, Tech’s increasing tuition could cost the university federal aid money.

“We are tied closely with federal aid,” Stinson said. “The STEM building was built entirely with donations and federal funding.”

Obama first made reference to the plan during the State of the Union Address by putting colleges and universities.

“If you can’t stop tuition from going up, the funding you get from taxpayers will go down,” Obama said during the address.

Obama began revealing the details of his proposal to the public when he spoke at the University of Michigan three days after the State of the Union Address.

The proposal comes at a time when student loan debt is at an all time high, increasing the tensions between students and schools.

“I feel like a broke college kid,” Lindsay Moore, a Tech accounting major, said. “It is just too expensive.”

The proposal also comes at a time when many colleges and universities are faced with large state budget cuts.

“We’ve seen a 31percent cut in state funding that we have to partially replace with tuition,” Stinson said. “It worries me when the federal government gets into the business of influencing tuition rates.”

Obama made several other proposals related to colleges and universities. He proposed lower interest rates for federal subsidized loans and a permanent extension of a tuition tax credit.

He also called on colleges and universities to offer a list to potential students comparing financial aid packages and statistics on graduates, like how much they are earning and where they are currently employed. According to Obama, all of this is designed to give students a better value.

“Once the nose is under the tent, the whole body will soon follow,” Stinson said. “We got people in Washington trying to manage universities nationwide who do not know all the variables.”

All of Obama’s proposals will require congressional approval.