The board of trustees of the Ver­mont State Colleges (VSC) this month reluctantly approved a 4% rise in tuition for each of the next two years, but that will still mean cuts at all the colleges, including Vermont Tech, according to the man who heads up the whole system.

VSC Chancellor Tim Donovan, whose office is currently in Ran­dolph, told The Herald that to level- fund VSC programs would have re­quired a 6% or 6.5% tuition increase. The board decided, however, that the 8% increase over two years was all it could ask of its students.

The trustees’ vote on the tuition increase was 9-4, with the four mi­nority trustees all favoring a lesser increase, Donovan said. The deci­sion “fol­lowed an engaged discus­sion,” according to a VSC release.

“This increase is modest relative to public institutions around the na­tion, where the average increases of tuition more than double this pro­posal,” Donovan said in a written statement. “However, that won’t reassure the students most affected by the increase…” Donovan said he and the college presidents believed the 4% increases were necessary.

“Our trustees recognized the cuts and impact on quality that a lower rate of increase would have forced on the colleges,” he said.

Speaking in his office here last week, Donovan noted that Gov. Shumlin’s budget last year cut the VSC budget by 2%, and that his pro­posal this year is to stay at that level.

Vermont state funding of its col­leges is notoriously low, and it’s rapidly losing ground, he said, es­pecially for the VSC system.

In 1980, the state paid 50% of the state college expenses, Donovan noted, and as of now, it’s just 18%.

That reduction didn’t happen all at once, but as the result of “a slow spiral,” he said. “It’s been an unin­tentional public policy.”

He sees two reasons for the de­cline.

Two Reasons

First, the state funding propos­als aren’t geared to actual expenses and enrollment, but are based on some set percentage of the previous year’s funding.

Second, and this may be a sur­prise to many, the state colleges have doubled in size in the last 20 years.

The Community College of Ver­mont has grown the fastest—dou­bling in the eight years that Dono­van was CCV president—but all the colleges have grown.

“VTC is a good example,” he said. With its nursing programs and the Williston campus, it has grown dra­matically.”

The overall result, the chancellor said, is that state support per stu­dent in the VSC system is 30% lower now than it was in 1990, in actual dollars. Adjusting for inflation, sup­port has decreased by 50% per stu­dent.

That leaves increased tuition the only option, Donovan explained.

Not Easy for Students

He admits it’s not going to be easy for VSC students, 82% of whom are Vermonters.

That’s especially true because the interest rates being charged for stu­dent loans have skyrocketed over the last few years, largely because the rates—mandated by the federal government—switched to a fixed- rate basis in 2006, instead of a vari­able rate.

Previous to 2006, student loans were available for as little as 2.36%, but starting on July 1, 2006, new Stafford loans carried a 6.8% inter­est rate, according to Irene Racz at VSAC. New Parent-PLUS loans were 7.9% through direct lending and 8.5% through a lender such as VSAC.

Starting in 2008, Congress took pity on “subsidized” Stafford bor­rowers and reduced the rates—from 6%, then downward until last year the rate was 3.4%, she explained.

However that rate reduction is scheduled to phase out this July 1 and go back to 6.8%—at a time when interest being paid out by banks on their deposits hovers around .5% (half a percentage point).

President Obama, Racz said, has proposed keeping the 3.4% rate for next year on subsidized Stafford loans.