University Hikes Tuition To Pay For Obamacare Costs

by Jennifer Kabbany - Fix Editor on June 22, 2014

University of South Carolina’s board of trustees has hiked tuition for the upcoming school year to help shoulder new health care and Obamacare implementation costs, expenses they say the public university can’t afford.

The increase of 3.2 percent – about $342 per student – will pay for state-mandated employee pay raises, health and retirement benefits, and Affordable Care Act implementation, campus leaders say.

Implementing Obamacare is estimated to cost the state’s flagship university up to $4.5 million.

“We are now at a critical tipping point,” university President Harris Pastides stated in a campus news release. “The current trajectory is no longer sustainable for our students, parents and taxpayers.”

Campus officials blamed what they called unfunded mandates for the financial crisis, or demands the state and federal government place on the university that come without providing enough cash to pay for those requirements.

“The state is only expected to cover a fraction of the pay increase and associated fringe and health insurance increases for employees,” campus officials stated in a budget breakdown published by The Times and Democrat. “ … The state also provides no funding for mandated increases in employer contribution to retirement or the expected increase due to the implementation of the Affordable Care Act.”

President Pastides told the Post and Courier no employees’ hours have been cut to offset the Obamacare employer mandate, which requires colleges to offer employees who work 30-plus hours a week health insurance or pay fines of up to $2,000-per-employee.

In response to the tuition increase, a spokesman for Republican Gov. Nikki Haley’s office told the Post and Courier it’s a “tragedy” the Affordable Care Act prompts financial hardships for students and schools.

Meanwhile, the University of South Carolina’s neighbors to the north are struggling with very similar woes, as leaders of North Carolina’s 17-campus UNC System are grappling with how to pay for unfunded health insurance mandates as well.

“On Thursday, the Board of Governors discussed the challenges with the state’s current health plan that would require all of 17 colleges in the system to pay about $5,400 for each worker’s healthcare plan,” reports the Charolette TWC News. “It would cost about $45 million if the UNC System had to provide health care coverage under the current state health plan.

“There’s no money provided to us or to state agencies to cover this cost,” said Charles Perusse, chief operating officer of the UNC System. “We’re just supposed to absorb it within our budget.”

North Carolina Agriculture and Technical State University’s Chancellor Harold Martin said schools may be forced to cut hours or jobs.

“Inclusive of cutting some of those employees, reducing their hours of work to ensure that we’re able to meet within the cost options available to us our commitment to support our employees,” he said.

At least one federal lawmaker is trying to ease the burden colleges face today as a result of Obamacare.

Republican Sen. John Thune recently introduced legislation that aims to exempt schools and universities from the Obamacare employer mandate that requires them to offer their workers health insurance or pay fines.

Thune, in a statement, said the need is great: “According to reports, some schools across the country are eliminating teaching positions and others are reducing the number of hours teachers and staff can work in order to comply with the health care law’s 30-hour work week.”

“These higher costs for colleges and universities are inevitability passed along to students in the form of higher tuition prices.”

Apparently a case in point is now the University of South Carolina. And as campus leaders pass along the increased costs to students in the form of tuition increases, that hurts students, Republican leaders say.

“Schools around the country are now forced to spend more of their budgets on healthcare, something they cannot afford to do,” Raffi Williams, deputy press secretary of the Republican National Committee, stated in an email. “This will negatively affect the students who are there to get an education so they can achieve the American Dream and find their own success.”

Jennifer Kabbany is associate editor of The College Fix ( @JenniferKabbany )

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