Southeast Kentucky Community and Technical College released the following statement this week after The Mountain Eagle asked a series of questions about staff reductions and the school’s current financial situation. The school, based in Cumberland in Harlan County, has campuses in Letcher and three other counties in eastern Kentucky.
Southeast Kentucky Community and Technical College (SKCTC) is facing a perfect storm of difficult challenges that is impacting its enrollment, budget, and student loan default rates. These include a population decline in the four counties served by SKCTC due to massive job loss and high rates of opioid addiction leading to any number of problems, including incarceration and death of many people. All of these societal issues are creating challenging times for the region and SKCTC.
The college’s service area has experienced a decline in population, which has led to a five-year decline in enrollment, and therefore, revenue shortfalls that have impacted the budget. However, there is not a budget deficit this year. This year’s budget is balanced and is meeting projected revenues and expenditures.
The $1.5 million figure reflects a possibility for next year’s budget only, and it is NOT a deficit. It is projected that expenditures will be greater than anticipated revenues. We are making adjustments in expenditures in order to avoid a deficit next year. It’s customary for the college to begin planning and reviewing the upcoming year’s budget during this time of year. It is not uncommon to notify a few people each year that their contracts will not be renewed. This year, 10 positions were affected. Two of those were at the Whitesburg campus.
To be prudent, good stewards of our finances, we have to prepare for the future. We are the only public access institution for higher ed in the poor counties served by this college. We are committed to continuing to serve this region, which means tough decisions sometimes must be made.
Dr. Dennis Michaelis, the interim president at SKCTC, is a well-qualified leader with 30 years’ experience as a college president and has served as an interim president at other colleges after his retirement from fulltime work. He was selected for his knowledge and experience with colleges that are similar to SKCTC.
The college, like every other organization or business, is affected by local, state and federal factors that are beyond our control, such as the proposed changes to the Appalachian Regional Commission.
It’s no secret the loss of jobs in the mining industry has hit the area hard. More than three-quarters of the coal jobs in Eastern Kentucky, particularly in Bell, Harlan, Knox and Letcher counties, have all but disappeared in recent years. The decline has destroyed an industry that historically sustained the regional economy, spreading the effects of the downturn to the education systems, local businesses, and the overall employment levels.
In addition, the region faces low educational attainment rates, which limits the ability of individuals to improve their lives, as well as those of their families.
Nearly one-third (29.67%) of the region’s population has less than a high school diploma or equivalent as compared to 13.9% nationally.
Here, 37.3% of the population has a high school diploma or equivalent.
Another growing and far more insidious problem for the region is that of drug abuse and drug-related deaths. The opioid problem in southeastern Kentucky is among the worst in the nation. In Bell County alone, the death rate in 2013 was 93.2 per 100,000 people, nearly double that of any other Kentucky county. What is transpiring in Bell County also reflects what is happening in neighboring counties, where federal officials believe opioid deaths have been grossly underreported.
Data also show that Bell County was in the nation’s top 20 for incarceration. For SKCTC, the incarceration rates may be one of the drivers of our default rates, which have been above 30 percent for two years. Incarcerated student borrowers are unemployed, hence in no position to make payments on their student loans.
The Higher Education Opportunity Act of 2008, created the three-year student loan default criteria. SKCTC will receive final numbers on the third year review later this year. Until then, we will not speculate on hypothetical situations.
Those who default on their loans are no longer our students and haven’t been for at least three years, sometimes making it diffi- cult to find them. As difficult a challenge as it is to locate them, we’re committed to doing whatever we can to find them.
Ongoing default prevention efforts at the college level include:
• SKCTC has a personal services contract with the Kentucky Higher Education Assistance Authority (KHEAA) to assist in student loan default prevention and collection.
• A letter campaign to provide all borrowers the tools they need to make informed decisions about Federal Student Loan debt. The information offers a foundational framework of personal finance and money management skills.
• Refresher Financial Literacy Seminar training material for students in their second and subsequent years to ensure student awareness of changes in federal requirements, as well as loan interest rates, repayment and forgiveness options, etc.
• Promotion of Cash- Course campus-wide. Cash- Course is an online resource website produced and maintained by the National Endowment for Financial Education (NEFE). An email campaign is under development to build student awareness and promote the use of these web based tools and tutorials. Students will receive monthly emails that include financial facts to that can aid informed financial decision-making.
Presentations of information during New Student Orientations. Students and their parents receive materials and information to promote financial responsibility early in the student’s matriculation. All new students receive a Guide to Understanding Student Loan brochure, a presentation on budgeting resources, consequences of loan default, communication efforts and responsible borrowing.
Texts, e- mails, and KNECT reminders are sent to all student borrowers to check the National Student Loan Database System (NSLDS) web page for additional informational resources. In addition, the Financial Aid Office notifies all current year student loan borrowers about their total loan indebtedness and estimated payments at the beginning of the fall term and again at the conclusion of the spring term.