Nov. 9 marked the end of pre-registration for spring courses, in which many students scrambled for places in limited-enrollment classes. However, a number of students were unable to sign up because of Brown's reinstatement of a policy barring those with significant unpaid balances from pre-registering. This policy, suspended during the recent recession, needlessly endangers students' academic futures and leaves students' families more vulnerable to the lingering effects of the economic downturn.
The lapse of the moratorium on registration holds is motivated by the belief that the financial crisis is generally over and that all is now well in the economic universe. This is demonstrably false. Unemployment is still high and many families are still struggling to pay down old consumer debt. The recession has ended by technical definition, but a period of joblessness can affect personal balance sheets for years.
But Brown too is under budgetary stress, and therefore has to find another way of enforcing tuition payments. As Michelle Uhrick '11 points out ("When is a university just a university?" Nov. 15), Brown already uses its power over students' diplomas and transcripts to influence their economic decisions in many ways. If the University can withhold a degree in order to compel students to live in the dorms, then it can just as easily use such tactics to discourage late payments.
After all, a student who has already paid for several semesters' tuition has made a significant financial commitment to the University that can be viewed as a type of collateral. In this case, if a student is late in making payments, Brown could simply hold his academic records — ergo all of the tuition he has paid thus far — and cover the balance of his account while charging some level of interest above that of conventional student loans.
Obviously, there are a few complicated aspects of this arrangement that would have to be taken into account. For instance, Brown is a sufficiently large institution that it can cover overdue payments, but doing so would still make a dent in its operational cash flow that would need to be recovered.
Fortunately, the aforementioned financial crisis has brought with it record low interest rates of which Brown can easily take advantage. From this, it becomes apparent that Brown can borrow cash at very low interest rates, charge overdue accounts a relatively high interest rate and generate a profit over the long run by pocketing the difference.
There is also the problem of differing levels of collateral among different class levels. A junior has obviously paid much more tuition than a second semester freshman, meaning that the freshman faces less of an incentive against default, and is therefore a greater financial risk to the University. Though it would be unfair to prevent students of lower semester levels from borrowing from the University in times of personal financial stress, Brown could charge underclassmen higher interest rates to correct for this additional risk.
Generally speaking, any program that involves lending out money is open to potential losses, but most associated risks can be controlled by adjusting interest rates accordingly. Furthermore, any student who borrows from the University in this way faces the threat of losing access to all of his credits at Brown until he pays the balance, which would serve to minimize even further expected losses.
In light of this, the policy of preventing anyone with an outstanding account balance of $1,000 or more from taking part in pre-registration is overly vindictive. When students are unable to make payments, it is not because they are attempting to game the system somehow. People sometimes have difficulty in securing student loans, and unforeseen circumstances can often seriously affect families' ability to pay tuition bills on time. A bureaucracy exists to align financial aid awards with ability to pay, but it is often unable to react as quickly as the situation requires.
When considering problems of tuition in economic terms, it is important to be cognizant of the structural advantages that Brown has over its students. However, because Brown is perfectly capable of collecting collateral from students with outstanding balances, these advantages can sometimes work to the benefit of students in need.
Instead of forcing students to wait in limbo while unable to sign up for limited-enrollment courses that are often needed to graduate, Brown should use its power to give students who have fallen behind on payments the time to catch up. Not only could the University potentially profit from such an arrangement, but in the current economic situation, it is the only compassionate thing to do.
Hunter Fast ‘12 is a computer science-economics concentrator from Bloomington, Ill. He can be reached at hunter_fast (at) brown.edu.
