Tennessee: Refund checks spark debate

Tennessee: Refund checks spark debate

March 7th, 2009 by Joan Garrett McClane in Local Regional News

University of Tennessee campuses last year refunded $60.5 million to students who received more financial aid than needed for tuition and fees, records show.

"Students are receiving more money from other sources than they ever have," said Al Hooten, vice chancellor of finance and administration at UT Martin.

The average refund is more than $2,000, documents show.

UT officials say the large number of refunds, which at UTC range anywhere from $15 to $11,000, shows few students are struggling to find money to pay for college and could afford a tuition increase.

"It sure seems like a lot of money," UT trustee Don Stansberry said. "With that much money being refunded, isn't there room for a larger portion going to tuition? Shouldn't we explore that option?"

Students said the refunds help them pay expenses outside of tuition, such as housing, food and books.

"Just looking at those numbers can be deceiving," said Tyler Forrest, a UT nonvoting trustee and a student at the University of Tennessee at Chattanooga. "Your immediate reaction is, 'Oh, these students are taking home all this money.'"

Mr. Forrest received a refund check of $5,000 this year. However, like many students, he spent the lump sum on off-campus housing costs and other school-related expenses.

"It was all scholarship money," he said.

Students receive a check from the university when the amount of money they have in loans, scholarships and grants exceeds the cost of tuition and fees. A portion of the refund checks some students receive from their college is from student loans they will begin paying after they are out of school.

At UTC, 61 percent of students graduated with debt in 2007, with an average debt load of $18,512, records show. In Knoxville, 47 percent of UT graduates had debt, with an average amount of $19,341, in 2007, according to the Project on Student Debt, a nonprofit organization based in California.

Edie Irons, a spokeswoman for the Project on Student Debt, said though some will make a case that most students are receiving more than enough aid to get by, a lot of the money included in financial aid packages and in refund checks is loaned.

She also said financial aid packages are intended to cover a wide range of costs - more than just tuition and fees.

"The term refund doesn't give an accurate impression," Ms. Irons said. "It makes it seem like it is money that isn't needed. These are valid and real expenses outside of tuition and fees."

UT chancellors reviewed the issue of student refunds and scholarships at the February UT board of trustees meeting. Trustees appeared shocked at the amount of financial assistance students in Tennessee are receiving.

Ninety-nine percent of all students admitted to UT receive the HOPE scholarship, said Dr. Jimmy Cheeks, chancellor at UT.

At UTC, 36 percent of students receive the HOPE scholarship, which requires a 3.0 high-school grade point average and awards $4,000 per year for tuition. The cost of attending a UT campus, plus the cost of food and housing, ranges from $11,475 per year at UT Martin to $20,452 per year at UT.

Dr. Cheeks also said UT offers many other full-time tuition scholarships for underprivileged students. For example, the Pledge Scholarship pays tuition and room and board for more than 250 students in families making $42,000 and below, he said.

UTC gave 2,345 Pell Grants, totaling $7.5 million this year, and that amount will increase next year since Pell Grant amounts were increased under the federal stimulus package, said Richard Brown, vice chancellor of finance and administration at UTC.

Dr. Tom Rakes, chancellor at UT Martin, said he wanted trustees to know how much money is changing hands between students and universities and how much the HOPE scholarship has done to improve access to higher education in Tennessee.

"We are among the lowest-tuition (colleges) in the state of Tennessee," Dr. Rakes said. "We are already charging the lowest rate. It is not like we are trying to run an extra profit on somebody."