Financial Aid Freeze Could Drive Up UNC Student Debt
UNC-Chapel Hill officials worry the newly approved system-wide freeze on need-based financial aid could drive up student debt.
Stephen Farmer is UNC-Chapel Hill’s Vice Provost for Enrollment and Undergraduate Admissions. He says the move by the Board of Governors to freeze the financial aid budget for Chapel Hill will make it hard for the nation’s first public university to fulfill its commitment to affordable education.
“It’s going to be hard for us to find alternative sources of funding,” says Farmer. “If we can’t find alternative sources of funding, then we predict that debt will rise and more students will have to borrow.”
The UNC Board of Governors voted unanimously on Friday to cap tuition increases at five percent each year for the next four years at all of the state’s 16 colleges and universities. The board also placed a cap on need-based financial aid, limiting it to 15 percent of tuition revenue starting next year.
Currently, UNC-Chapel Hill and five other schools already spend more than that on need-based aid. Those schools are not be required to decrease the amount of financial aid offered to students, but will not be able to increase the aid budget even if tuition goes up. Farmer says financial aid is crucial for many Chapel Hill students.
“I think there’s a misperception out there that the only students that receive need-based aid at Carolina or other colleges and universities are students that are truly low-income,” says Farmer. “The fact of the matter is that the overwhelming majority of students at Carolina who receive financial aid are middle-class students, they come from middle-income households.”
More than a third of UNC Chapel Hill students take out loans to help pay for education. Once the aid freeze is in place, that number could rise to about fifty percent. Farmer says that would effectively undo much of the work that’s been done in the past decade and a half to ensure UNC-Chapel Hill remains affordable.
“We would not have been able to do what we’ve been able to do over the last 15 years, keeping Carolina affordable, keeping it a best value, making sure that the average indebtedness of our students is no higher today in real dollars than it was 15 years ago,” says Farmer. “We couldn’t have done all those things if we hadn’t been able to return a share of the tuition revenue that we collect back to students in the form of need-based aid.”
The aid freeze was approved in conjunction with a tuition cap, but Farmer says that’s not likely to help students in need, as the cost of room, board, and books continues to go up independent of tuition.
Still, he says the university is committed to making sure as many qualified students can attend as possible.
“This university is completely committed to making it possible for every student we admit to enroll here,” says Farmer. “We don’t think that a great public university should only be available to the people who can afford to pay. That’s a bedrock value of Carolina and we’re going to fight like crazy to defend it. So we’ll do everything we can to mitigate the impact of this proposal on our students because our students are worth defending.”
The tuition cap and financial aid freeze are slated to go into effect in 2015.