Livingstone begins budget cuts after federal student aid drops

  • Posted: Sunday, March 24, 2013 1:06 a.m.

SALISBURY — Livingstone College is tightening its budget and looking at layoffs as drops in federal aid bring down enrollment.

In a March 8 letter to faculty and staff, President Dr. Jimmy Jenkins said the college will be making “budget adjustments” because of changes in federal standards for certain student and parent loans.

According to the letter, the college has started to identify positions to be eliminated or the number of personnel reduced. In addition, Livingstone has already instituted freezes on hiring, salary increases and unrestricted spending.

“We will continue to do our best to manage the budget in ways that will advance the college’s ongoing goals and objectives, while strengthening the institution to serve our valuable assets, the employees and our students,” Jenkins wrote.

Reached by phone Thursday, Jenkins said the college isn’t moving forward with layoffs yet. He said Livingstone is looking at budget reductions that could come from several different expense areas.

“The U.S. Department of Education changed the rules on its PLUS loan program, which rendered many students who were eligible in the past ineligible,” Jenkins said.

According to the U.S. Department of Education, PLUS loans are federal loans that graduate or professional degree students, as well as parents of undergraduate students, can use to help pay education expenses. They can be used to supplement federal Stafford loans, which are capped at $5,500 to $7,500 per year.

Stricter standards on these loans have doubled the number of borrowers rejected after a credit check, the Associated Press has reported. Jenkins said this change is affecting colleges and universities all over the country, and it disproportionately impacts historically black colleges like Livingstone because their students are more likely to be eligible for aid.

Between 2006 and 2009, Livingstone’s student enrollment rose steadily from 899 to 1,080 students, according to numbers provided by college officials.

That number grew to 1,152 in 2010 before dropping to 1,137 in the fall of 2011, when the PLUS loan standards were changed. Enrollment dropped again in the fall of 2012 to 1,106 students.

Jenkins said Livingstone is looking at other avenues of fundraising and ways to reduce spending that won’t impact personnel.

“We’ll keep evaluating our cash flow and budget situation on a daily basis,” he said. “As we move forward with the budget, we’ll try to find other ways to minimize the loss of those federal dollars. Clearly, we have to put everything on the table.”

Contact reporter Karissa Minn at 704-797-4222.



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