Dropouts increase as aid falls

UNC Pembroke is among the hardest hit of the state's public colleges.

jstancill@newsobserver.comOctober 9, 2011 

  • The UNC system has $35 million less than last year for grants to needy students. An estimated 5,500 fewer students will receive financial aid from the state.

A few nights a week, Ashley Williams stocks shelves and runs the cash register at Big Lots in Laurinburg. She's excited about the second part-time job she just landed, decorating cakes at Walmart.

Williams, a 22-year-old computer science major at UNC-Pembroke, lives in Laurinburg with her unemployed parents and commutes to campus. She helps out with the family grocery bill and pays for her cellphone, car and gas.

Her financial aid package dropped significantly this fall, when she lost about $1,000 she used to get from state grants. After tuition, fees and health insurance were paid from her federal aid, she had $45 left - not enough to buy her books, which cost nearly $400. The university helped her find two small grants to bridge the gap.

"I cannot stop. I can't give up," Williams said. "I've been talking about going to college since I was 5, and so I can't give up. I've got to do what I've got to do to make my ends meet."

Williams is one of the lucky ones. She was able to stay in school.

More than 500 of her fellow classmates left campus, or did not return this fall, because they couldn't pay their tuition bill, UNCP officials say. The students who dropped out were academically eligible, but the money wasn't there.

"It was tragic, almost, to see that many not able to continue," said UNCP Provost Ken Kitts.

A cycle of financial woe is beginning to show at UNC campuses, where the system's overall state funding dropped by 15.6 percent this year.

Tuition and fees rose $400 on average across the UNC system, while some sources of financial aid are drying up.

Tuition and fees for North Carolina residents are $4,668 this year at UNCP, and the total minimum cost is $12,366, including room, board and health insurance.

At the same time, more students are qualifying for aid because a parent lost a job. They are often taking on bigger loans to stay in school, while worrying that when they graduate they'll end up in a dismal job market.

There is no statewide data on the college dropout phenomenon, and it appears to be playing out unevenly. Flagship campuses - UNC-Chapel Hill and N.C. State - have not seen a major impact so far, partly because they have more pots of money to tap to help students. Some campuses have noticed a slight dip, mainly in out-of-state students who have higher costs.

Others saw a significant decrease and began to contact students to inquire why they weren't coming back.

"The message was clear," said Steve Roberson, dean of undergraduate studies at UNC Greensboro, where 125 students left. "It's the economy over and over again in ways we just haven't seen in the past."

Undergraduate enrollment has dipped by about 200 students at UNCG, which has a student body of more than 17,000. Some of the decline can be attributed to the university raising admissions standards, said UNCG Chancellor Linda Brady. But students and families are also having to make difficult decisions about whether they can afford a university education.

"Some of them indicated they were transferring to a community college because it was cheaper," Brady said.

Debt keeps growing

Even though there are fewer students, the overall loan debt of UNCG students has grown to $76 million, from $74 million last year, Roberson said. Tuition and fees for North Carolina residents are $5,493 this year; room, meals and other expenses bring the costs above $12,000.

Jasmine Igbedion, a UNCG sophomore from Washington, D.C., didn't know whether she would be able to return to campus until the week classes started. Her financial aid package had decreased, and her mother was unable to qualify for a federal loan. At the last minute, Jasmine was able to get an additional $4,000 loan.

"I spent almost the whole summer crying because I didn't think I could come back," she said.

Last week, she and two friends strolled outside the campus student center, where the food court offers Mexican fare, sushi, burgers and Chick-fil-A at lunchtime. They said they had cut their meal plans from $1,050 to $750 for the semester, and the money is going fast.

Kiarra Johnson, a UNCG junior from Washington, D.C., shares a textbook with a friend to cut costs. "Sometimes he will read it one day, and I'll read it the next day," Johnson said.

Johnson, who wants to be a teacher, gets discouraged about the debt she's accumulating. Every day, she wonders, is it worth it?

"I understand that eventually - it may take years - it'll pay off," she said.

Declines in aid

UNC President Tom Ross, in his inaugural speech last week, said the university system should keep its historic commitment to affordability but not sacrifice academic quality as state money declines.

"Still, maintaining high quality and raising educational attainment amid rising costs will require a dependable, adequate stream of need-based financial aid, lest we deny many economically disadvantaged - and middle class - students opportunities that the world of the future will make available only to the college-educated," he said.

More than half of the UNC system's 220,000 students receive some form of need-based financial aid; a little more than a third receive federal Pell Grants, the primary source of aid for low-income students. Some turn to loans, while others can't or won't borrow more.

This year, the system has $35 million less in state financial aid dollars for grants; an estimated 5,500 fewer students will receive financial aid from the state.

The situation could get worse for students. Some members of Congress have suggested cutting the Pell Grant as part of a deficit reduction plan. And interest rates on subsidized federal loans are expected to double next year after the expiration of a four-year span of reduced rates. The interest rate will jump to 6.8 percent next year unless Congress takes action.

Meanwhile, student loan default rates are on the rise nationally, according to a government report last month. In 2009, the default rate rose to 8.8 percent, up from 7 percent the year before. Defaulting on a student loan can be a disaster for a young person's credit rating, said Molly Broad, president of the American Council on Education, a national organization that represents 1,600 campus leaders across the nation.

"It's stunning, the level of unemployment of recent college graduates," said Broad, former UNC president. "So they're unemployed, they have had significant student loans because tuitions went up when state support went down, and the interest rate goes up on top of it. We're sending a generation of college graduates to decades of difficulty in getting out from under that. We owe them better."

Gut-wrenching losses

UNCP Chancellor Kyle Carter said turning students away because of money is gut-wrenching.

The problem at Pembroke also threatens the university's bottom line. Enrollment has dropped from 6,900 last year to 6,200 this year, Carter said. That means the university collects less tuition revenue, leading to a $2 million budget hole in addition to the state budget cut of $9 million this year.

Carter said one idea on the table for 2012-13 is raising tuition and devoting all of the revenue to financial aid. He's not sure it's workable, but it's one approach being studied.

The university is in contact with the former students and is working to help them look for private scholarships and other sources of financial help.

"We have a full-court press to try to get students back in the spring," Carter said.

Williams, the UNCP student, has noticed that one of her friends didn't return this fall. But she understands all too well that college students have to adjust.

In 2009, Williams arrived at UNCP after a year and a half at UNC-Charlotte, where she amassed almost $24,000 in debt. She knew she couldn't keep that up, so she packed up and moved home, where she could save money on living expenses.

"I couldn't afford it. I wasn't getting enough financial aid," she said. "I loved that school."

But she's also happy at Pembroke, where she has enjoyed the small classes. So far, she has managed with no additional loans.

Her dream is to save up, eventually go to a culinary arts school and open her own restaurant. She expects to start her second job soon and get her degree in the spring.

"I feel like what doesn't break me, it makes me stronger," she said. "It just shows me that after I graduate and get out on my own, I can't expect for everything to be easy. Things don't come to you easy. You have to work for what you get."

Stancill: 919-829-4559

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