State financial aid running low

Katie Wordsworth, a freshman biology major, said she needs every cent of her financial aid grants to achieve her dream of becoming an oncologist.

Once accepted to UNC, her decision to attend was an easy one — it was the only school to promise her a debt-free education through the Carolina Covenant scholarship.

But Wordsworth and other low-income students across the state might have to take out loans in coming years if the state’s fund for financial aid grants continues to decrease.

The state’s escheats fund — composed of revenue from unclaimed property — funds about 83 percent of the state grants for need-based aid given out by the UNC-system.

The fund is steadily decreasing, which means that students in need might have a harder time paying for college.

Wordsworth is a native of Rocky Mount, N.C., which was named one of Forbes’ 10 most impoverished cities in 2009.

Her father and younger brother have autism, and her mother doesn’t work, so her family survives off of federal disability benefits.

“My parents have nothing saved up,” Wordsworth said.

The University gives out more than $13 million in state-funded grants, which makes up 17 percent of all grant money given to undergraduates, said Shirley Ort, associate provost and director of scholarships and student aid at UNC.

For the 2009-2010 school year, 4,917 UNC students received state grants, with the average award totaling around $2,684, Ort said.

According to projections from the state treasurer’s office, the escheats fund, which provides a large portion of the grants at UNC, will decrease below $200 million in two years.

Once the fund has less than $200 million, the state will have to start liquidating funds and will start potentially losing money.

“It’s not really our issue as to how (legislators) fund the student aid,” said Steve Brooks, executive director of the N.C. State Education Assistance Authority.

“What we can do is tell them how much students need and hope they fund it, whether they use the escheats spot of money or some other fund,” he said.

Wordsworth’s Carolina Covenant scholarship is a combination of federal, state and University grants.

With the escheats fund running out, UNC’s need-based scholarship program might not have enough money to award to students in need like Wordsworth.

“Students would have to borrow more in order to make up for the grant money,” Ort said.

To make up for the loss in state grants from the escheats fund, the legislature might require a certain amount of tuition increases to go toward financial aid, said N.C. Rep. Ray Rapp, D-Haywood.

Rapp is vice chairman of both the House appropriations subcommittee on education and the joint select committee on state funded student financial aid.

The N.C. General Assembly might also urge the U.S. Congress to continue funding Pell Grants — need-based financial aid — and other need-based programs at levels they have in the past, he said.

Federal appropriations for Pell Grants have increased annually from fiscal years 2007 to 2010.

“We can’t let them back up on that because that is simply sacrificing our future for short-term cuts in the budget,” Rapp said.

Smaller grant awards might make paying for college prohibitively difficult, Brooks said.

“Best case, they would have to borrow more,” he said.

“Worst case, they’re already borrowing as much as they can, so they wouldn’t be able to go at all.”

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