UNC-system leaders propose change to state-fund aid

If a recommendation for simplifying the state’s financial-aid system is followed, students from similar economic circumstances in the UNC system would be receiving the same amount of aid, regardless of the tuition costs they pay.

At the request of the UNC and N.C. community college systems’ presidents, a work group comprised of state education officials studied simplifying the financial-aid system and recommended standardizing a formula for calculating aid awards for students and consolidating three sources of state financial aid into one.

The proposed formula is the same as the federal formula, which calculates expected family contribution without taking into account cost of tuition.

If legislators decide the recommendation should be implemented, the public education systems would receive the same amount of money from the state that they currently receive.

But students could receive different amounts of aid than they have in the past.

“Because this proposal does not recognize differences in tuition, it tends to favor campuses with lower tuition rather than those with higher tuition,” said Steve Brooks, executive director of the N.C. State Education Assistance Authority.

He estimated that students at the five most expensive UNC-system universities — UNC-CH, N.C. State University, UNC School of the Arts, UNC-Greensboro and UNC-Charlotte — would lose the most state aid, while students at the other 11 universities would mostly gain state aid.

But UNC-CH said it is committed to making up student loss in state aid, even as the University addresses budget cuts.

The recommendation includes creating a payment schedule, which would establish a set rate of aid awards based on expected family contribution. There would be one set rate for all UNC-system students and an adjusted rate for community college students.

N.C. Sen. Eddie Goodall, R-Mecklenburg, said he is worried about how students who are currently receiving aid would be affected by the new process for determining aid awards.

“I am concerned that we have made certain promises to students and we’re changing the rules,” Goodall said.

The new process would not significantly change the amount of money the government would give to students as a whole, he said.

“But to those parents in Greensboro with a freshman at State, if changing the formula means they have to come up with $2,000 more per year for four years, the change is certainly significant to them,” he said.

Brooks said it would be up to the individual campuses to make up for the students’ loss in state-funded financial aid.

UNC-CH would continue to meet 100 percent of the financial need of students who lose state-funded aid, Ort said.

But it would put an additional burden on the University already struggling with budget cuts.

The proportion of grants and loans that make up financial aid from the University would likely change, Ort said.

“It is likely that borrowing would increase modestly,” she said.

UNC-W’s financial aid office would deal with students’ loss in state-funded aid in a similar fashion to UNC-CH.

Emily Bliss, director of financial aid at UNC-W and member of the work group that made the recommendation, said the financial aid office would award the grant funding they have available and then fill in the gaps with loans.

Goodall said legislators will meet again in early November to decide if they will support the recommendations from the work group.

“If we get a green light from this committee,” Brooks said, “I would say it would happen for the 2011-2012 year.”

He also said students that are currently marginally eligible for state-funded financial aid will probably lose it if the recommendation is put in place.

“Every school is going to have some students that lose funding and some students that gain funding.”

Contact the State & National Editor at stntdesk@unc.edu.