Financial aid cuts cause higher dropout rates systemwide

As the amount of financial aid available at UNC-system schools continues to shrink, some students are running out of options.

The demand for student loans has increased systemwide, but students who don’t want to accrue debt have to pack up their dorm rooms and return home without a degree.

At UNC-Greensboro, the number of students who returned after their first year dropped to 75.8 percent this year from 76.9 percent.

Steve Roberson, dean of undergraduate studies at UNC-G, said the school tried repeatedly to contact students who did not return for the fall semester.

“We called them weekends; we called them evenings; we did everything we could to stay in touch,” he said. “We wanted to encourage them to return, and we wanted to find out why they weren’t coming back. A lot of students reported that the reason was financial.”

Jon Young, provost and vice chancellor for academic affairs at Fayetteville State University, said the school has depleted its allotment of student loans despite an increase in enrollment.

“Students are having to take out more this year than they did last,” he said.

“We’ve seen more students come in to request an increase in their financial aid.”

At N.C. Central University, Sharon Oliver, director of scholarships and student aid, said in an email that average student debt at the university is $26,000.

Students have been encouraged to apply for more scholarships and attend financial literacy workshops, she said.

Roberson said it’s difficult for UNC-G to fill funding gaps because the school does not have a sizable private endowment.

“Our ability to intervene on behalf of students to close that gap is severely limited by cuts in state funding,” he said. “We’re redoubling our efforts to reach out to students to provide academic support.”

Young said FSU students will also be hurt by the elimination of federal Pell grants for summer school next year. In fall 2008, 59.8 percent of FSU in-state undergraduates received Pell grants and 80.8 percent received some type of aid.

“We continue to try to seek scholarship funding from external donors,” he said.

“Loans help the student pay the bills for this semester, but they don’t want to accrue excessive loans.”

Miles Lackey, director of the Office of Federal Affairs at UNC-CH, said the federal government has had to cut back on loan programs to preserve funding for Pell grants. The government will stop subsidizing graduate student loans as a result of the Budget Control Act passed in August, he said.

“There is definitely uncertainty associated with Pell grants right now,” he said.

“Any reduction in the investment in Pell grants will likely have a strong influence in the amount of loans that need to be taken out.”

He said 2,500 students at UNC-CH receive federally subsidized loans and 3,200 receive Pell grants.