A pool of state money used to help students pay for college will empty in three years, according to the state treasurer's projections.
State Treasurer Janet Cowell has told legislative and education leaders the escheats fund — which consists of money collected from sources such as unclaimed bank accounts, forgotten utility deposits and insurance policy proceeds, plus the investment interest — will be drained by 2012.
The state uses the money for college loans and scholarships, Lynn Bonner reports.
In a letter to legislators earlier this month, Cowell estimates the fund will be $59 million in the red by 2012. "That means money available today for an incoming college freshman for financial aid will not be there by senior year," she wrote.
The fund paid $210 million for scholarships this school year.
Cowell asked legislators not to withdraw $5 million from the fund, as the Senate approved in its budget, and urged them to maintain a $200 million minimum balance.
"In addition, I also urge you and your colleagues to revisit the fund's overall structure and sustainability," she wrote. "We cannot keep our promise to ensure that all North Carolinians have access to higher education if we are depleting the means for them to do so."
Document(s):
cowell-escheats-2009.pdf
Comments
Re: Cowell: Scholarship fund draining
May 16, 2009 - 5:12pm — KingixolibShe's gotta be a democRAT, right?
Re: Cowell: Scholarship fund draining
May 15, 2009 - 9:46pm — PlaybyPlayThough I am now very excited about the Shane's Rib Shack half rack of ribs give away tomorrow, I don't think that was the link you meant to post for the document.
Re: Cowell: Scholarship fund draining
May 15, 2009 - 3:24pm — PlaybyPlayMaybe they mean the money being held by the SEAA, not the actual escheats fund? Still doesn't seem to add up though when you are talking about spending $210 million each year for scholarships out of the SEAA fund.
The North Carolina State Education Assistance Authority (SEAA) is an agency of the State of North Carolina and is authorized by the General Assembly to administer post-secondary education programs of student financial assistance created under Federal or State law. North Carolina General Statute 116B-7 provides that the interest earnings from the Escheat Fund, minus administrative expenses, be deposited with the SEAA. The law further provides that this money will be utilized to provide grants and low interest loans to worthy and needy North Carolina students in State-supported schools of higher education. In July 2008, $27,483,811 was deposited with the SEAA for this purpose. This will provide over 50,000 additional grants and low-interest loans to North Carolina students in State-supported schools of higher education.
Who's money is it?
May 15, 2009 - 3:09pm — PlaybyPlayAre they using the principle funds that come from the funding resources you listed? I was under the impression that money was required to be divested from companies into an account controlled by the state so that people could later find and be returned the money that is theirs, not the states. There are a number of websites that allow you to look up if you have lost money. But, I have noticed that NC is not a participant in the sites I have searched so far. Maybe that is because the NC government wants the money for themselves. Much like a lot of people’s tax refunds they are holding. There are other funding resources for the escheats funds that are not the property of citizens, is that the source of the public spending from this account? If not, what if people want their money and now the state has spent it? Is the state required to keep that money on hand or are they allowed to spend it as they want and are just liable for any claims?
Maybe this is more for Ask Dome...