CHRIS SEWARD - cseward@newsobserver.com
Students mill about on the quad in front of the Wilson Library on UNC-Chapel Hill campus in this file photo from 2006.
CHAPEL HILL -- Jacob Pinto had a full ride to UNC-Chapel Hill, until he lost his scholarships and grants this year because his parents made more money and the state cut funding to UNC-CH.
"I was planning on traveling after I graduated," Pinto said Friday. "I was going to be debt free, no worries, but now I've got to make sure that debt is gone before I go anywhere."
State grant funding was cut 20 percent this year, Shirley Ort, associate provost and director of scholarships and student aid, told the UNC-CH board of trustees this week. In the future, more students will need to borrow money, and they will need to borrow more than they have in previous years, she said.
UNC-CH prevented the cuts from affecting most students by using about $4 million from a reserve fund to offset them, according to Ort.
However, with the elimination of federal summer Pell grants in 2012 and possible changes in how the state distributes grant funding next year, UNC-CH could lose a total of $8.4 million in grants next year.
Pinto, a psychology major, considers himself lucky. With his parents' help and working during school and after he graduates, he is confident he can pay off his student loan within a few months.
"In other circumstances, I would have had to drop out and I wouldn't have gotten my diploma after three years," he said.
While Ort expects the number of students that have to borrow to rise from 31 percent of graduating seniors to about 40 percent in the coming years, UNC-CH students currently have one of the lowest amounts of debt when compared with students at peer institutions.
The 31 percent of May 2010 graduating seniors at UNC-CH borrowed an average of about $16,000.
The 46 percent of students at the University of Michigan at Ann Arbor borrowed almost $28,000. The 63 percent of students at the University of Minnesota borrowed a little more than $27,500.
If UNC-CH raises tuition, some of that money could go toward student aid, but that isn't something Ort is counting on.
An increase in private funding could help make up some of the lost grant money, but it's likely that more students will still have to get loans, Ort said.
For Natalia Perez, a freshman at UNC-CH who is currently receiving $15,000 in grants, it's worrisome to think about UNC-CH raising tuition or having to take out student loans if she loses some grants next year.
"I don't want to have to worry about paying back money after I graduate. I want to it to be paid off year-by-year," she said.
