UNC will dip into reserve scholarship fund to preserve aid

In the face of a shrinking budget, the University’s Office of Scholarships and Student Aid is starting to dip into reserve funds to compensate for cuts to financial aid.

On average, the University receives around $12 million from the state for financial aid, but is expecting only $10 million this year, said Shirley Ort, associate provost and director of the scholarship office.

“We hold some funds in reserve and so we will now be able to use some of our reserve funding and spread it out,” Ort said.

With these reserves, the University will be able to cover much of the coming need-based aid cuts, Ort said. She declined to say how much money there is on reserve.

The reserve funds come from trademark licensing money, which is funds from the sales of T-shirts and other products that have the University’s logo on them, Ort said.

While the reserves are helping with need-based aid, Ort said the cut to scholarships will result in an increase in the number of students who borrow money.

She said the average UNC student borrows $16,000, while at peer research institutions, the average amount of money borrowed is more than $20,000.

“Our students aren’t having to borrow as much as our peer institutions and we’d like to keep it that way,” she said.

While the state funds for scholarships and financial aid are being cut, the University is not losing much private aid, Ort said, adding that private donations are at about the same level as last year.

The University last year met 65 percent of student need with grants and scholarships, which is an important level to maintain for next year, Ort said.

“We’re going to try really hard to keep that 65 percent threshold,” she said.

Student aid and scholarships have become a prominent part of student government’s lobbying efforts in the General Assembly.

Student Body President Mary Cooper said she will be working to educate legislators about the importance of student aid.

“It allows the state to invest in students,” she said.

Cooper said she is focusing on financial aid while the budget is being reviewed.

In May, the N.C. House of Representatives eliminated North Carolina Education Lottery funds for need-based scholarships from its budget, a cut that would have cost 750 UNC students an average of $1,400 in scholarship funding.

But the funds were restored in the version of the budget now being considered by Gov. Bev Perdue.

“It was a high priority of the UNC system, President Ross and the chancellors to get the lottery scholarship funding restored for needy students,” said Erin Schuettpelz, director of state relations and communications for the University.

Contact the University Editor at university@dailytarheel.com.