Reshaping a state: Less funds for college educations

as financial aid shrinks, tuition rises – as does student debt

Staff WriterMay 15, 2011 

  • A budget speaks loudly about a state's priorities, and the proposed House plan would change much about how we pay for government - and what we get from it. On coming Sundays, The N&O will examine issues rising from the budget being considered by the General Assembly.

  • The recently approved House budget would reduce appropriations for the UNC system by $472 million, or 15 percent. Individual campuses would decide where many cuts would come, though the House budget does offer some specifics. They include:

    Cutting a $6 million program that allowed campuses to count out-of-state students on academic scholarships as in-state students for tuition purposes. This allowed campus scholarship programs such as the Morehead-Cain at UNC-Chapel Hill and the Park at N.C. State University to save money. Until last year, the provision applied to out-of-state athletes as well, a boon to booster clubs such as the Ram's Club and the Wolfpack Club.

    Eliminating the $44 million annual appropriation for the UNC Health Care System. UNC Health has generally used that money to help defray the costs of roughly $300 million in uncompensated care it says it provides each year.

    Reducing a pot of money universities use to recruit and pay nonresident graduate students by 20 percent, or $8.6 million. The result would be funding for 694 fewer out-of-state graduate students across the UNC system.

    Eliminating $11.9 million in recurring, or continuing, funding for the UNC Center for Public Television. That appropriation would be replaced with $10.6 million for 2011-2012 only. UNC-TV is undergoing a review prompted by questions over a botched series of reports on Alcoa, which sought a renewal of rights to control a dam on the Yadkin River. The public station must satisfy reviewers to get funding in subsequent years.

    Limiting a student's access to UNC need-based grant funds to nine semesters. Students receiving financial aid often take more than four years to graduate, in part because many take lighter course loads in order to work.

    Though decisions on many cuts on individual campuses have not been made, chancellors have offered a few ideas of what may happen if sizable budget cuts take hold. They include:

    At UNC Charlotte, the average time a student takes to graduate would increase by a semester, mostly because a reduction in classes and instructors would make it harder for students to take courses they need.

    At UNC-Chapel Hill, job cuts would force the admissions office to close two days a week for about half the year.

    N.C. State University would eliminate six fire-protection and police positions - 9 percent of its total.

    Winston-Salem State University would eliminate 9 percent of faculty.

    N.C. Central University might cut 12 of roughly 150 positions in finance, human resources and information technology.

    The UNC School of the Arts in Winston-Salem might close its filmmaking school.

  • A core element of the budget debate is an expiring 1-cent sales tax. Democrats say it should be extended, pointing to the roughly $1 billion in revenue it would provide a state that sorely needs it.

    But Senate leader Phil Berger said legislators promised the tax would be temporary when it was enacted in 2009.

    "When it was put in two years ago, the governor, the Democrats in control, all said it's temporary," Berger said. "They made a promise, and at that time, we said, 'Just wait: Two years from now, they'll want to extend it.' Here we are, two years later. They've not cut spending, and now they're saying we've got to extend the tax. If you say you're going to do something, you ought to do it."

    The 1-cent tax costs a family of four about $85 a year, Democratic leaders say.

    Doing away with the tax means more money for residents, Berger said.

    "The expiration of that tax will leave over a billion dollars in the hands of individuals and small businesses throughout North Carolina," Berger said. "That in and of itself will be a significant aid to job creation in our state. When government raises taxes, pulls money out of the private economy, it depresses economic activity. Letting that tax expire is beneficial to what everyone says is priority one: job creation."

  • The state provided $162 million in the current budget year for a need-based financial aid grant program for students at public universities in North Carolina.

    Of that, $127 million is recurring money, and about $35 million was a one-time appropriation.

    The UNC system has asked the state to make all $162 million recurring and add about $36 million more to the pot, citing rising numbers of needy students.

    In contrast:

    Gov. Bev Perdue's budget proposal would keep the fund at $162 million but wouldn't add to it.

    Leaders in the N.C. House countered with a budget plan that would cut funding to $127 million. The House budget also eliminated funding for the Education Lottery Scholarship Program, which provided about $15 million annually for public university students. If those plans are approved, at least 5,500 fewer students would receive need-based grants next year, and the average award for recipients would be $333 lower, UNC officials say.

Second in a weekly series

As each semester passes and his debt grows larger, N.C. Central University student Kenneth Crockett becomes less convinced that college was the right decision.

The sophomore from Winston-Salem started college with a financial aid package composed entirely of grants. But as tuition increased, that morphed quickly into a combination of grants and loans. Two years in, Crockett now has about $5,000 in debt - with more on the horizon.

After years of steady growth, the need-based grants the UNC system offers to in-state students such as Crockett are in peril. For the first time in the fund's 11-year history, legislators want to reduce the state's contribution to the program, which could mean more debt for students.

"If they cut it, not only would I have to pay it, I'd have to work more," said Crockett, who receives at least $1,000 a year through that grant program. "I think about that all the time."

The reduction would follow a four-year spate of budget cuts that has forced universities to scale back considerably, with the budget year that starts in July promising to be the roughest yet. The state House's budget proposal would cut nearly $472 million from the 17-campus university system, a 15 percent reduction in current funding.

Cuts at that level would force a dramatic change in the way public universities operate, UNC leaders say. Among other reductions, 3,200 jobs would be eliminated. That would include 1,500 faculty slots, about 10 percent of the system's full-time faculty.

Republicans, in charge of the legislature for the first time in more than a century, say they will cut taxes, increase user fees, reduce health care for the poor, cut personnel in schools, and force college students to pay for more of their education. They have questioned longtime Democratic priorities and promised to use the budget to reshape North Carolina.

Though Republicans are targeting universities for significant cuts, the UNC system was hit hard as well during the last four legislative seasons under Democratic rule: $620 million was shaved from its annual budget in that time.

Crockett and other students may face higher costs, and it may take them longer to graduate as class sections get eliminated and some students take lighter class loads so they can work part- or full-time jobs. Over the past decade, tuition for public universities has grown as much as 200 percent. Last year alone, NCCU tuition rose 24 percent.

The tuition increases and budget cuts run counter to the state constitution, which says that higher education should be free for North Carolinians "as far as practicable."

Students' aid in trouble

All of this forces Crockett to contemplate what might have been. The product of a single-parent home, the 20-year-old considered community college before enrolling at NCCU. He chose that path in large part to please his mother; he's the first in his immediate family to attend a four-year university.

"I sometimes think college is unnecessary," he said of the four-year university plan. "If I go to community college, I'll have a degree quicker and won't owe as much."

But after two years at NCCU, Crockett says he's committed to going the distance. His debt likely will grow.

With tuition rising, university officials see a need for more financial aid. But budget plans for 2011-2012 proposed by both Gov. Bev Perdue and the state House would provide far less than the $71 million in new money the UNC system has requested for the need-based grant program.

Perdue's plan would add no new funding to the $162 million in this year's budget, while the House plan would reduce it by $35 million. The Senate's view of the need-based aid program is not yet clear.

"I do not recall a time that they have come under threat before," Elizabeth McDuffie, director for grants, training and outreach with the State Education Assistance Authority, said of the UNC need-based aid funds. "It has (previously) been funded generously by the General Assembly, so it's a change."

The assistance authority administers financial aid programs for students attending public and private colleges and universities in North Carolina.

Federal lawmakers also have taken a tough look at financial aid. The Pell Grant, the most common source of federal need-based aid, was the subject of a contentious negotiation this year. It provides as much as $5,550 a year, a ceiling that won't go up next year but, after significant squabbling on Capitol Hill, won't be reduced, either.

But a second Pell Grant that helped students pay for summer courses was eliminated as part of the budget deal brokered recently for the rest of the fiscal year.

Across the nation, states are cutting need- and merit-based grant programs, driving up the cost of college, said Daniel Hurley, director of state relations and policy analysis with the American Association of State Colleges and Universities. The higher costs prevent some from enrolling, and force some out of college. Others simply pile on the debt, Hurley said.

There's no standard solution to this, and students need to evaluate whether the product they're going to get will be worth the money, Hurley said.

"All education has some type of return on investment, but that return can vary dramatically," he said. "Each student has to be his or her own judge."

Nationally, college costshaven't yet saddled students with too much debt, said Terry Hartle, senior vice president with the American Council on Education. But as states like North Carolina continue making sizable cuts to public university budgets, that could change, he said.

"As the price of college continues to climb, the danger will grow that students will borrow more money than they can afford to pay," Hartle said. "It doesn't make (any) more sense for a 20-year-old to borrow too much money for college than for a 40-year-old to borrow too much for a home."

A job at the gym

At NCCU, campus jobs are tough to come by, so when some came available last semester, Crockett got in line three hours early. The result: a gym monitor position that offered $7.25 an hour for six hours a week. It was pared to four hours, or $30 a week. "Unless there's a holiday," Crockett said. "Then it's less."

With summer break looming, Crockett plans to head home to Winston-Salem in hopes of scoring a part-time job for at least half the summer. "Gotta get in early before the high school students get out of school," he said.

For extra spending money, Crockett said he plays video games or basketball with fellow students with a few bucks riding on the result. He buys candy, soda and chips, and re-sells them from his dorm room. All this for spending money as he works his way through college.

He's studying criminal justice, and he wants to be a detective, his way of righting some of the wrongs he so often saw as a kid in a rough part of Winston-Salem.

"Growing up in my neighborhood, I've seen drugs mess up a lot of homes," he said.

As he goes forward, he'll continue to ask why he's doing it. In one breath, he says college is a waste of time and money. In the next, he says he's too invested to make a change.

"I'm torn, right down the middle," he said with a sigh. "I'm still trying to figure out why I'm here."

Next Sunday: Squeezing savings from health care for the poor

eric.ferreri@newsobserver.com or 919-829-4563

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