The North Carolina General Assembly created a Joint Legislative Study Committee on state funded student financial aid to study the current financial aid system and suggest changes for the following year.
N.C. Sen. Richard Stevens, co-chairman of the committee, said the committee knows there is a great need for student aid.
“The economy is really low and people are looking for more aid,” Stevens said. “There is less money available and the need will continue to increase.”
Stevens said the Joint Legislative Study Committee will review different sources that fund financial aid.
“We are not trying to change anything,” Stevens said. “We are looking at how well the system is organized, if their structures are in place, if they are additional resources needed and figuring out where these new sources will come from.”
Most of the money going to state financial aid comes from the Escheats Fund, which is collected money from unclaimed property or property forgotten by its previous owners, he said.
Whenever the owner of the property within the state dies but does not have real or personal property by will and without leaving any heirs for that property, the unclaimed property is taken to the State Treasurer. The money is funded through aid for needy students attending public higher education institutions.
The fund has $584 million and it could go broke in three years if the legislature does not find another way to pay for student financial aid.
This fiscal year, the fund is expected to provide at least $210 million in financial aid to college students, helping 54,000 students within the University of North Carolina System.
Stevens said the fund of financial aid came to their attention during a session on the budget.
“There is great need for aid, and yet resources are tight,” Stevens said. “It is up to the leadership of the Senate committee and House to take a hard look at the issue and come back with some recommendations if it needs to be different.”
Stephen Kouba, a junior in political science and University affairs committee chairman, said the committee will be studying the status of the current financial aid.
“What it shows me is that they are very aware of the difficulties the financial aid offices around the state are having,” he said. “The loss of scholarships and any increase in tuition puts another burden on them.”
Kouba said the General Assembly has to balance the budget the best way it knows how.
“Unfortunately, education is 60 percent of the state’s budget. It is one of the hardest things to cut because of the investment they have to make in education,” Kouba said.
The University’s Tuition Review Advisory Committee recommended an increase of $150 for undergraduate residents and $200 for undergraduate nonresidents, graduate residents and graduate nonresidents.
According to the Office of Financial Aid at the University, the legislative mandated tuition increase will cost the office $2 million to fully cover the expenses of the University’s financial aid services.
”That is a tremendous burden to put on our financial aid and any individual student who is not covered by financial aid,” Kouba said. “I assume they will look at the impact the tuition increase will have on it.”
The committee will be making recommendations to the General Assembly during 2010 and 2011 and will meet every month starting Dec. 8 though May 2011.
Stevens said the committee does not know how the revenue picture for the state is going look to until they get back in session next May.
“In the meantime we will be looking at the sources for financial aid,” Stevens said. “The public should expect us to work hard to go in depth with the issue and to report back to the general assembly our finding.”
Kouba said he hopes the committee will not do any more cuts on education.
“They created this commission to make financial aid better and more efficient,” Kouba said. ”The committee will do what’s best for the state and what is best for the students, but there are no guarantees.”
