The system stands to lose $9.9 million in state funding this fiscal year and $9.9 million next year because of Gov. Nathan Deal’s directive that state agencies cut spending by 3 percent. This is the fifth consecutive year the state has told departments to come up with additional budget reductions.
“The dollars just aren’t there,” Jackson said in an interview following the board’s vote. “The financial reality is that we had to make this adjustment.”
Last year, the system enrolled about 170,000 students, with more than 60 percent qualifying for the federal Pell Grant for low-income students. At the same time, HOPE grants, used by more than three-quarters of all students, don’t pay as much as they used to. The grants used to cover all tuition but now pays $60.75 a credit hour. Students taking 15 credits this semester receive $911.25 from HOPE, although tuition is $1,125.
The popular program was on track to run out of money in 2013 before Deal received bipartisan support in 2011 to implement multiple changes, including reducing award payouts.
It’s too soon to know whether the higher costs will price some students out of college. The majority of the system’s students are older, working adults. System leaders partly blamed reduced HOPE payouts for an enrollment drop of more than 12,000 students last year.
Jackson said the system plans to increase fundraising efforts to offer students more scholarships.
“We understand the hardship it will create,” he said. “We are still the least expensive higher education option for students in the state.”
Rep. Earl Ehrhart, R-Powder Springs, chairman of the House Higher Education budget subcommittee, said the increased charges are “not out of line” and described the system’s actions as “reasoned and conservative.”
Ehrhart and Jackson did not anticipate the higher costs would hurt the state’s goal of creating a more skilled work force. The system experienced record enrollment during the recession when out-of-work adults returned to college for new careers.
“When people need jobs, they show up,” Jackson said.
Ehrhart said the system already has made numerous spending cuts, such as merging its 33 colleges around the state to 25 institutions. The system also has relied more on part-time instructors, who are less costly than full-time teachers.
“They have cut to the bone,” Ehrhart said.
The institutional fee was in response to there being little else to cut, system leaders said. This charge is similar to one the State Board of Regents started in 2009 for students attending the University System of Georgia. That fee was created to offset state budget cuts and was supposed to end this summer. But leaders kept the fee saying the system can’t afford to lose the $210 million a year it brings in.
Higher tuition and fees in the technical system could raise as much as $18 million this year and as much as $42 million next year, Light said.