Gov. Ed Rendell has proposed borrowing money to fund new state programs despite a projected tax surplus this coming year. The state projects up to $2.8 billion in loans for cleaning up the environment and boosting the economy.

Advocates argue that low interest rates and the economic spark from a burst of government spending make borrowing a sensible choice. Critics say bonds just delay and inflate costs for government programs, while damaging the state's financial health -- especially if the funds are used to pay for routine business.

Some students worry that taxes will be raised during their working years to foot the bill for the loans. Others are concerned that the move may be to please taxpayers immediately despite possible consequences.

"By raising taxes this would make the taxpayers unhappy, but by simply borrowing money this might just compound a more serious problem in the future," Ryan Colvin (sophomore-finance) said.

The projected surplus comes at a time of continuing cuts to Penn State's funding. Penn State is not included in the proposed program, as it is a "non-preferred budget item," said Penn State spokesman Tysen Kendig.

Keeping a "rainy day fund" in the case of unexpected bills by the state is wise, said economics professor Paul Graf.

"The government might be betting that the economy will grow at a rate so that when the debt is due, they will have enough money to not have to raise taxes," Graf said.

The added debt is expected to have no effect on student loans through the state, said Chuck Ardo, spokesman for Rendell.

"Nothing the governor has proposed on the bond issue has any affect on the PHEAA (Pennsylvania Higher Education Assistance Agency) at all," Ardo said.

Some students said that if a surplus is available, the state should increasing funding for the university.

"If there is a surplus, one of the first priorities should be education," Drew Mavrikos (freshmen-division of undergraduate studies) said.

Pennsylvania is not the only state to consider taking loans.

New Jersey and South Carolina are also considering the measure in the wake of California voters recently approving a $15 billion loan.

"The question becomes: Who owns the debt? Who owns the bond? If it stays within Pennsylvania, it is irrelevant. But if the income leaves Pa., then it could be detrimental," Graf said.

The Associated Press contributed to this report.