LINCOLN, Neb. (KOLN) - Proposed budgets, both on the national and local level, could manipulate the amount of debt students shoulder upon graduation.
On Thursday, June 1, the University of Nebraska Board of Regents will meet to talk about its two-year budget plan.
And while budget discussions at the university level may not seem to impact a student when it comes to financial aid, the regent’s meeting could have large implications on how much money will need to be borrowed to attend the University of Nebraska.
The university is currently dealing with a budget shortfall of roughly $50 million, and if the current budget proposal is approved, it will increase college tuition at five campuses.
“No tuition increase in easy,” University of Nebraska President Hand Bounds said while laying out the plan. “I recognize that parents and students in Nebraska are working hard to make this investment.”
Bounds said the university went into this budget process with two objectives — protect the academic integrity of the institution while maintaining affordability and access.
“In my view, the state now more than ever needs the University of Nebraska to grow,” Bounds added earlier this week. “This state needs us to grow our enrollment, so that we can continue to meet workforce demands and grow the workforce, but we also need to grow our research portfolio if we're going to meet the needs of Nebraska.”
But meeting those needs will come at a price. Most likely, it will cost $10-$12 a credit hour in the first year of the biennium, and $6-$7.50 more in the second year.
This rise in tuition will undoubtedly come with a rise in the amount of money borrowed, as Bounds added “need based aid will increase at the same rate as tuition.”
Bounds also hopes to cut $30 million from the budget, in addition to the tuition hike.
On a national level, President Donald Trump's proposed budget has been sent to congress, and would cut $143 billion over 10 years in the federal student loan program.
The proposal eliminates the public service student loan forgiveness program, eliminates subsidized loans, and streamlines income-based repayment.
Currently, there are four income-based repayment plans, and the president's budget creates one single plan in hopes of saving the government $76 billion over the next decade.
Before the president's budget was released, we asked Dr. Eric Thompson, an Associate Professor of Economics at the University of Nebraska, about income-based repayment.
“I think it is okay to adjust people's loan burden when their income is so low they could not possibly make the payments,” Thompson said. “With that aside, an income-base repayment option is a bad idea. It would act almost like a tax. So if you were to raise your income, then all of a sudden your monthly loan payments would rise. That would act something like a tax in people's minds. If people feasibly can make the payments, i think they should make the payments regardless of their income.”
In addition, the president's budget would add year-round pell grants.
This is money students don't have to pay back, and goes to those in the most need.
Currently, students can only get pell grants for fall and spring semesters.