Pell cuts won't hurt University students

About 1,500 UNC-Chapel Hill students will see a reduction in federal aid next year as a result of recalculated Pell Grants, but the University and the state should be able to offset those losses.

That’s the finding of preliminary calculations by Shirley Ort, associate provost and director of scholarships and student aid for the University.

“It probably won’t be felt directly by the students because we’re expecting that through a combination of state grants and some private money, we should be able to cover most of this,” she said.

Ort estimates that about 1,400 Chapel Hill students will lose $100 in Pell money, and another 90 stand to lose $400. None of that, she said, should translate into an increased burden on those students because the financial aid office should be able to make up the difference.

“I’ve been doing this for 30-plus years, and these things happen all the time,” she said. “We try and manage our resources so, if it’s an adjustment on the margins, we can handle it.”

Ort said she maintains a reserve of about $300,000 — out of a total budget of $183 million — and the projected shortfall from the Pell changes is estimated at $175,000 for UNC-CH.

Across the UNC system, the impact of the Pell Grant change will depend heavily on whether the state can come up with extra funding.

Steve Brooks, executive director of the state education assistance authority, said that under the state’s formula for distributing aid, students who apply early should not see any overall reduction in funds, even if their Pell Grants are reduced.

“The way the UNC need-based grant is structured, it will make up for that loss for students that apply on time,” he said.

The trouble arises for students who wait too long to submit aid applications. Each year, the state distributes aid money on a first-come, first-serve basis until it runs out. By compensating for the lost federal aid money, the state risks running out of its own pool of funds earlier than usual.

To keep that from happening, Brooks wants the governor to include a request for about $10 million extra in this year’s budget proposal. While he acknowledged that the budget will be tight, Brooks said the governor and the legislature have been supportive in past years.

“They seem to be very sensitive to the fact that it costs money to go to school, and we want to make sure people can do it,” he said.

Financial aid directors at a number of system schools said they are looking at ways to use their own resources to help address a potential shortfall for Pell recipients. Most had not yet calculated how many students would be affected.

“As a school, we will try to fill the need with our funds,” said Emily Bliss, director of financial aid at UNC-Wilmington. “It’s probably going to be a minimal change to our students.”

At N.C. State University, officials are projecting a loss of $700,000 in Pell funds. Julia Mallette, director of scholarships and student aid, said her office will be examining ways to minimize the student impact if the state funding doesn’t come through.

“Certainly there are other resources we can pull together to cover the shortfall as best we can,” she said.

Ort and Mallette both said they understood the need to update the formula, even if they aren’t terribly pleased with the impact.

“I think it’s probably something the federal government should have been doing all along,” Mallette said. “When you wait 10 years to make the update, it’s a more significant impact.”

While she doesn’t expect any further funding disruptions in the near future, Ort said she’d be keeping “a careful eye on what the White House and the Department (of Education) are doing vis-