“CHEYNEY-Cheyney University the nation’s oldest historically Black college has announced that it will erase unpaid student bills since the start of the COVID pandemic.” The Associated Press
Cheyney University recently announced that it will use its federal COVID stimulus money to wipe out the debt of students from spring 2020, fall 2020, and spring 2021 semesters. Cheyney is one of the numerous colleges and universities using their COVID stimulus money to pay down or off student debt. “A growing number of colleges and universities have announced in recent weeks that they would be canceling student debt for their graduates using funds from President Biden’s recent stimulus bill. Elizabeth City State University in North Carolina announced last week that it would be wiping out $286,500 in student debts owed directly to the school due to the COVID-19 pandemic… Elizabeth City State University is not the only college to cancel student loan debt for its students, and it may not be the last. Wilberforce University, a historically Black university in Ohio, would be doing the same, canceling over $375,000 in student debt for students enrolled in 2020 and 2021. And Delaware State University announced in May that it will be forgiving over $700,000 in student loan debt to at least 200 students facing hardships due to the pandemic.” More Colleges Are Cancelling Student Debt Using Biden Stimulus Funds- Will Others Follow? Adam S Minsky
https://www.forbes.com/sites/adamminsky/2021/06/03/more-colleges-are-cancelling-student-debt-using-biden-stimulus-funds—will-others-follow/?
On the surface, this gesture may appear extremely magnanimous, but it is really quite practical. In fact, it’s a no-brainer. College is a business; colleges need customers, students are the customers who pay tuition, secure grants, scholarships, or loans to pay their academic bills. So college students who can pay or secure funds for their education are a plus. Students who enroll but have no means to or cannot pay are a liability. Tuition revenue is the grease that keeps the engines of higher education running. Using COVID stimulus funds to erase student debt is a win-win for everyone; it keeps students in school, lowers the probability of student loan defaults, and uses the stimulus money in a positive and beneficial fashion.
Most Black colleges and universities, whether they are public or private, are not major research facilities partnering with the government or corporations, which is an untapped source of revenue. Most HBCUs lack large endowments to help tide them over. Most are operating with little surplus to even cover deferred maintenance, the budgetary margin of error, or a financial setback.
Even prior to COVID-19, US higher education was in a precarious situation and HBCUs faced even more daunting challenges. Annual escalating tuitions, fees, and costs during a protracted period of stagflation where workers’ wages flat-lined or declined relative to rising inflation (an expansion of the money in circulation) have hurt working-class folks, putting college beyond the reach of many families.
It has not helped that the state of Pennsylvania has an extensive pattern of underfunding public higher education. Budgets reflect priorities. Evidently providing affordable public higher education is not a top concern for some legislatures.
Governor Tom Wolf ran on a campaign of providing increased funding for education from pre-K through Higher Ed. Despite his efforts to undo the disastrous policies of his predecessors, Pennsylvania still lags in educational funding, especially in public higher education. Currently, the state ranks forty-eighth in college affordability. Pennsylvania also ranks third highest for student debt, thirty-seventh in pre-K to 12 funding, and is the third-lowest in per capita higher education funding!
The Pennsylvania State System of Higher Education (PASSHE) is in deep trouble because the state legislature failed to appropriate the funds to keep the system affordable and competitive with neighboring states like New Jersey, Delaware, and Maryland. Increased tuition costs were routinely passed on to the students and their parents; hence the precipitous decline in enrollment.
Even prior to COVID, PASSHE schools were experiencing enrollment declines not just because of tuition costs and fees, but also due to declining demographics; fewer babies being born, fewer students, fewer high school graduates, etc. The legislature and PASSHE failed to address these issues, so now the system is forced to scramble to survive by consolidating many of its schools.
Cheyney’s decision to use their COVID money to wipe the slate clean is a convenient way to forestall students not returning this fall because they have back balances. Cheyney has an enrollment of around 550 full-time students. Imagine what the enrollment would look like if they lost all or a major portion of 180 students (students cannot reenroll if they owe a balance)?
Federal COVID funds are a mere stopgap measure, not just for Cheyney but for a host of institutions. US higher education is in crisis and needs to come to grips with rising costs in an era of stagflation, and rapid technological advances, which are altering the future of work in this country. All of which necessitates a new vision for higher education, and the role it will play in the future of this region, nation, and world.
