The University could face a multi-million dollar loss if a General Assembly committee finalizes its plans to change how need-based financial aid is allotted to UNC public universities.
According to Julie Rice Mallette, associate vice provost and director of the office of scholarships and financial aid, the UNC Need Based Grant committee was asked in 2009 to evaluate the current financial aid distribution system and to look for an appropriate alternative.
“First and foremost, the current formula for the UNC Need-Based Grant is not based on a federal definition of need,” Mallette said. “It has its own very convoluted and unpredictable formula that has been tweaked by the State Education Assistance Authority over the last decade. This new proposal will result in a much simpler and predictable award to students that can be modeled more accurately than the current program.”
Mallette said the current method of distribution provides more funds to middle and upper income families as well as larger universities like N.C. State.
“The existing allocation formula for the UNC Need-Based Grant program disproportionately favors middle and upper-middle income students and also favors higher cost institutions,” Mallette said. “When this work group was created in 1999, the intent was to give these funds to lower and middle income students.”
The new proposed system, according to Mallette, would not take into consideration the cost of tuition and attendance for a university, but would instead focus on the available contribution of students’ families.
“The new formula as proposed will be based largely on the federal definition of a family’s ability to pay, capping the maximum income level at $89,999 in combination with the family’s expected contribution (EFC) as measured by the FAFSA.” Mallette said. “This moves more funds to lower income students and reverses the trend in recent years to fund higher income groups.”
Thomas Stafford, vice chancellor for student affairs, said revamping the current financial aid system is important and this proposal could make the process simpler.
“Right now, these programs are so hard to administer,” Stafford said. “This proposal would enhance the entire program by combining everything into one program that works the same for everyone.”
However, Stafford also said this would mean funds traditionally allocated to N.C. State would be moved to other, smaller, universities.
“This is a good program overall, but it would reduce the amount of money coming to N.C. State for financial aid,” Stafford said.
According to Stafford, five universities, mainly N.C. State and UNC Chapel Hill, would experience a decrease in available aid. The other eleven public universities would see an increase in aid as a result of the new calculations.
According to Mallette, students with no expected family contribution would be hit the hardest by these changes.
“The task force is recommending a cost of attendance figure based on an average cost differential of UNC vs. NCCCS so the programs can be consolidated, administered, and explained to students and parents. As a result, the biggest reduction we will see is for students with a $0 family contribution,” Mallette said. “NCSU has over 2,100 students in the $0 family contribution category; thus the loss of state grant support will be $3.5 million for that population. If the student is in Pack Promise, we will be obligated to make up that gap through other funds, or redesign Pack Promise for future recipients.”
However, Mallette said the loss is much less dramatic when put into context.
“While this seems like a large number, it is small when viewed in the scope of the total aid awarded to NC State undergraduates,” Mallette said. “
According to Mallette, during the last academic year 15,585 undergraduates received in total more than $176 million in need-based aid.
So far this year about 15,213 undergraduates have been given a total of $191 million in aid.
Tyler Simmons, a freshman in engineering, said the possibility of losing funding would be regrettable but it would be the right thing to do.
“I think it would be quite unfortunate, but I think that is the way it should be calculated,” Simmons said. “I realize this would mean some students will have to take out more loans, but I don’t think the government should be giving more money to students simply because the schools they choose have higher attendance costs.”
Matt Currin, a freshman in agricultural education, said although this might be seen as “fair,” he does not think it would be good news for N.C. State.
“This is something that would hurt the entire student body,” Currin said. “High school seniors wanting to apply to N.C. State might not even consider N.C. State as an option if they don’t think they will receive enough aid to attend.”
According to Mallette, these plans are far from finalized.
“It is still not clear if or when the proposed consolidation of state grant programs will occur,” Mallette said. “We will be prepared to address the impact on N.C. State students if and when faced with the reality of having to do so.”
Simmons said if this plan is put into place and implemented, the university needs to immediately inform students of its effects on them.
”I think that N.C. State should tell all students, potential and current, about this as soon as possible,” Simmons said. “This could be a huge deciding factor in whether or not students want to stay at N.C. State, let alone become new students.”
