Colleges Cut Student Work Hours to Avoid Healthcare Costs
by C.J. McKinney
For decades, cash strapped college students have looked to campus jobs and work-study programs to make ends meet. Now, more of them than ever are putting in full time hours at those jobs to cope with skyrocketing college costs.
But in a growing number of colleges around the country, that may no longer be an option, as these schools join the long list of employers willing to cut full time workers’ hours to avoid paying for healthcare under the Affordable Care Act’s Employer Mandate.
In the months since the Affordable Care Act, known popularly by its GOP-bestowed nickname, Obamacare, was enacted, businesses large and relatively small have been crying foul about the mandate, which requires businesses and institutions with more than 50 full time equivalent (FTE) employees to cover healthcare for those workers. Employers who don’t comply have to pony up a monthly “Employer Shared Responsibility” payment.
Those changes don’t have to come all at once, though. The Act specifies that businesses with under a hundred employees have until 2016 to comply. Those with more than a hundred workers are expected to have covered at least 70 percent of them by 2015, and 95 percent by 2016.
Regardless of the time frame, the Employer Mandate has sparked outrage in many parts of the private sector, notably among large corporations such as Wal-Mart, McDonalds and the sports team the Chicago Cubs. Midrange businesses such as restaurant chains and local retailers have also claimed that complying with the mandate will either cut substantially into profits, or put them out of business entirely.
So many of these businesses are trying an end run – cutting full time employees’ work hours to bring them under the threshold normally considered full time. Though it’s generally understood that full time work means a 40-hour workweek, companies are exempt from providing health care for anyone working less than 30 hours a week.
To skirt the requirements of the ACA, disgruntled employers are making drastic cuts in the number of work hours available to these (formerly) full time workers. In some companies, those employees have seen their work schedules reduced by nearly half.
Now, that strategy is being embraced by other kinds of entities as well: local governments, school districts, and increasingly, colleges and universities. Along with teaching and research faculty, these institutors usually also employ a large and diverse support staff that includes student workers in a variety of jobs.
The University of Colorado at Boulder is among the most recent converts to the hour cutting strategy. A recent memo posted online from the administration advised student workers that in all university-provided jobs, the workweek is now capped at just 25 hours.
UC Boulder joins a long list of colleges small and large that are protesting the imposition of the ACA, including the University of Kansas, Bowling Green University and Middle Tennessee State University. The cuts affect all types of student employment, from teaching and research assistants and associates to library staffers, and student health center aides.
For students already struggling to cover the costs of college, the cutbacks come at a particularly bad time. The average American college student graduates with a student loan debt of over $20,000, often a combination of private and federal student loans. And recent statistics from the Department of Labor show a 21 percent increase in the number of students working between 20 and 34 hours per week to make ends meet.
On-campus jobs help students in many ways. In addition to helping to pay the bills, work-study and other kinds of jobs give students experience in their fields, opportunities for mentoring by prominent faculty, and valuable work skills. According to the American Association of University Professors, students working jobs on campus, rather than off, experienced greater academic success and were more likely to stay in school than their counterparts who either did not work or who worked off campus.
For these reasons, cutting back the hours a student can work can impact not just the student worker, but the economy as a whole. Reduced work hours may mean that some students won’t be able to afford to stay in school. And that means fewer opportunities for higher paying jobs, plus the burden of school debt for programs they didn’t complete.
Just like workers in the private sector, many working students, especially graduate students with families, depend like workers in regular jobs on healthcare provided by their employer, the college. Without it these working students have yet another expenditure to consider.
The move in higher education to sidestep the ACA Employer Mandate comes at a time when college tuition has jumped 1,120 percent in the past three decades. According to a recent Bloomberg Business report, revenues from college football programs alone increased 150 percent between 2000 and 2011. And despite calls for change from economists and experts in social policy, not for profit private and public institutions of higher education remain largely tax-exempt, free of state and local corporate, property and even sales taxes in some areas.
For generations of Americans, college has been a test drive for the “real world’ beyond graduation. For today’s cash strapped students, their alma mater’s decision to sidestep the Affordable Care Act by cutting student employment hours may offer a harsh introducti0on to the realities of that post-grad world.
Image: Flickr/Stephen Medlock