Whitesburg KY

College under financial strain

SKCTC administrators say drugs, poor economy are reasons why

The Whitesburg campus of Southeast Kentucky Community and Technical College (SKCTC) is centered around the old Coca-Cola bottling plant on the bank of the North Fork of the Kentucky RIver. (Photo by Sam Adams)

The Whitesburg campus of Southeast Kentucky Community and Technical College (SKCTC) is centered around the old Coca-Cola bottling plant on the bank of the North Fork of the Kentucky RIver. (Photo by Sam Adams)

At least 10 positions — and possibly as many as 15 — at Southeast Kentucky Community and Technical College’s five campuses have either been eliminated or the persons in those positions have been notified that their contracts will not be renewed after this semester, faculty and staff say.

Employees paint a picture of a college with chronic budget overruns and a student loan default rate so high it is at risk of losing eligibility for federal financial aid. About 90 percent of the students at the college receive federal financial aid of some kind, according to a statement from the college last week about an unrelated matter. Faculty members worry that without financial aid, the college would not be able to sustain itself.

Information from the U.S. Department of Education shows that for the three-year period of 2011- 2013, the latest figures available, the Student Loan Cohort Default Rate was 27.6 percent, 32.3 percent, and 31.9 percent. Those figures were released in September. The rates averaged slightly higher than Hazard Community and Technical College’s, which were 27.7, 31.8, and 28.9 for the same three years.

The Higher Education Opportunity Act, passed by Congress in 2008, and the regulations created with it say schools may lose their eligibility for Federal Family Education Loans, Direct Loans and Pell Grants if the default rate is greater than or equal to 30 percent for the three most recent years. Colleges may appeal the decision to end eligibility, but if the appeal is unsuccessful the eligibility is lost for three years.

“SKCTC will receive final num- bers on the third year review later this year,” the statement issued by SKCTC says. “Until then, we will not speculate on hypothetical situations.”

Whitesburg Mayor James W. Craft said he had not heard about the problems at the college, but would oppose any attempt to close the Whitesburg Campus.

“It’s too much of a value to this community,” Craft said.

The reasoning behind the federal regulation is that if colleges are doing a good job of educating students and placing graduates, they should be able to find jobs and pay their student loans.

The college took issue with that reasoning, saying it, “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.”

The college said in its statement that the loss of jobs in the mining industry has affected overall employment levels, and that the generally low educational level in the region “limits the ability of individuals to improve their lives, as well as those of their families.”

The college also said drug abuse and drug-related deaths have impacted its loan repayment rate. It noted that the 2013 death rate in Bell County was 93.2 per 100,000, a figure it said was nearly double that of other Kentucky counties.

“Data also show that Bell County was in the nation’s top 20 for incarceration,” the statement said. “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 student loans.”

The financial problems are a separate issue from the default rate, and according to the college are tied to a loss of population and jobs. Employees of the college said it has had financial problems in the past, but never this severe.

“We’re always over budget, but somehow we always get through it,” one longtime employee said.

The college denied that it has a budget overrun, but said current conditions indicate that it could be $1.5 million short in its budget next year if cuts are not made. But the college said in a statement that is “not a deficit.”

“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,” the college said in response to questions about the allegations by staff. “These include a population decline in the four counties served the 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 confirmed that 10 staff and faculty members were affected across the five campuses, with at least two of them at the Whitesburg Campus. However, employees at Whitesburg say three positions here are affected. Two of the three acknowledged that their contracts had not been renewed, but declined to comment, saying they didn’t want to “burn bridges.” SKCTC said one of the “staff” listed as being cut here is based on the Cumberland Campus, but teaches some classes at Whitesburg. She is not counted as an employee at Whitesburg.

None of the employees interviewed would allow their names to be used, citing fear of reprisal. One employee described the campus as being “on lockdown with the press,” adding that Interim President Dennis F. Michaelis is “not to be taken lightly.”

“ Every one of us is scared,” the employee said. “One word we say (that) he doesn’t like and we are gone.”

Michaelis served as president of McLennan Community College in Waco, Texas, from 1988- 2009, where a classroom building is now named for him.

Michaelis has served in two other interim positions since leaving McLennan. He was hired as interim chancellor of St. Louis Community College in October 2013 at an annual salary of $224,000. He moved to Baton Rouge Community College in July 2015 as acting chancellor, then interim chancellor that September. He began work here Jan. 2.

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