A handful of distinguished retired journalists (and me) meets once a month at a Baton Rouge Piccadilly Cafeteria (I told you we were retired) to solve the ills of the state, nation, and the world. Occasionally, we even delve into local Baton Rouge politics.
One of those, Ed Pratt, with whom I had the pleasure of working at the old Baton Rouge State-Times back in the ‘70s, is an occasional attendant but because he is still gainfully employed (unlike the rest of the over-the-hill-gang), he doesn’t join us each month.
But several months ago, at a lunch he did show up. The subject that day was the future of the Taylor Opportunity Program for Students (TOPS) and the legislature’s failure to adequately address the looming fiscal cliff that will see about a billion dollars fall off the books with the expiration of a temporary sales tax.
On March 9, Pratt, who still does a regular op-ed column for the Baton Rouge Advocate, WROTE a piece that accurately illustrated the direct connection between the continued funding of TOPS and the return on investment of apartment developers and restaurant owners, investments that exist in the immediate orbit of the state’s institutions of higher learning.
And while Pratt’s analysis singled out the spurt in apartment, condo, and restaurant development, primarily in the immediate proximity of LSU, other colleges and universities have also witnessed similar private investment, particularly in student housing.
Those investments could be in peril if the legislature continues to shirk its responsibility in setting the state on firm fiscal footing.
Take my alma mater, Louisiana Tech, for example, and Grambling State University, just five miles from Tech. There has been an explosion of housing construction around those two campuses. And because Tech has embarked on an ambitious program of student recruitment to bump its enrollment to something like 20,000 or so over the next few years, construction workers have been particularly busy in Ruston. (The enrollment at Tech when I was there was something like 4,000. But they had rotary dial pay phones, Cokes in 61/2-ounce glass bottles, manual typewriters, carbon paper, and 8 p.m. weeknight curfews for female students back then, too.)
But the way they’ve gone about with their student housing construction at Tech is quite creative and is being emulated by every other campus in the state, according to Ruston political consultant Dr. Gary Stokley, a retired Tech professor.
The Tech Alumni Foundation approaches alumni and other supporters with an “investment opportunity” that, as long as TOPS is maintained, is virtually risk-free. (And no, it’s not a Ponzi or pyramid scheme.)
Tech, despite having torn down some of its dormitories, is growing and with an increase in enrollment, students need housing. And, of course, students would prefer a home environment with private baths and kitchens as opposed to dormitories with a community bath and no kitchen.
By working with the school’s foundation, which actually negotiates the construction contracts, investors enjoy a generous tax write-off, plus they will own a percentage of the apartments or condos. The school takes care of filling the housing units and collecting the rent and is also responsible for the maintenance of the buildings. The dollars generated by student rent pays off the debt. The advantage to the school is that it is relieved of the burden of having to go through the State Bond Commission to obtain funding for the construction. The alumnus or supporter who ponies up the money does nothing but sit back and reap the rewards of his investment.
If you have the funds to sink into the project, it’s a win-win proposition.
“Tech is one of the first schools to come up with this method of financing construction of student housing,” said Stokley. “Other schools have since replicated that method.
“Tech and Grambling have a tremendous impact on the economy of Ruston and Lincoln Parish as do others schools on their communities,” he said.
“A four-year student at Tech has an economic value of a million dollars on Ruston,” he said, “so the retention of students is critical. If TOPS craters, enrollment will drop and these apartments will sit empty.
“It’s a domino effect. If TOPS is cut or eliminated, it affects not only students’ families, but the ripple effect impacts colleges and the community as well.” Stokley said it was not unrealistic to envision some universities actually shutting down or converting from public to private schools with even higher tuitions—which could further reduce enrollment.
There are already all those extra fees that students voted to impose on themselves—before tuition began rising so sharply seven or eight years ago. “At Tech, we have the $62 million Davison Center that students voted to pay a portion of by assessing themselves fees totaling $8 million,” Stokley said. “That’s an added fee tacked onto already rising tuition. If TOPS is cut, that’s money that will have to be made up by students’ parents or by students taking out student loans. If that happens, the money for private apartments and condos just won’t be in the budget.”
Combined with the threat to TOPS, banks are lobbying Congress to cap the amounts of government student loans which could place additional financial hardships on students.
With federal student loans, the interest rate is fixed and often lower than private loans which can have variable interest rates of more than 18 percent. Plus, with federal loans, students are not required to begin repayment until they graduate, leave school or change their enrollment status to less than half time. Private loans require payments while still enrolled.
For other advantages of federal over private loans, click HERE.
If you are a parent with a kid enrolled in a Louisiana public university who is on TOPS, you may wish to turn your attention from March Madness long enough to give your House and Senate members a call to suggest that they take time away from campaign fund raising long enough to do the job they were elected to do.
Better yet, here are the links to the HOUSE and SENATE. Scroll down and click on the name of your members to get their email addresses to contact them that way.
Louisiana Voice 