UNC ?ned for violating out-of-state cap

For the second consecutive year, the University admitted too many out-of-state students.

This time, however, it will be fined for doing so.

At its monthly meeting Thursday, the UNC-system Board of Governors decided to cut the University’s budget by $158,225 as punishment.

Charles Mercer, board member and chairman of the budget and finance committee, said the error occurred because a law was repealed last summer that allowed out-of-state students on athletic or academic full-ride scholarships to be considered in-state.

The University had admitted the students when they were still counted as in-state, but was fined anyway.

“The budget and finance committee thought it was better to act consistently with the policy,” Mercer said.

Thirty-eight students had their status changed from in-state to out-of-state after the law was repealed.

Those students brought the total out-of-state population to 726 — 13 more than what was allowed under the 18 percent cap on non-resident enrollment.

The $158,225 penalty denoted the amount the state would have had to pay for the 13 extra students.

“It happened, literally, overnight,” said Steve Farmer, director of admissions. “There was nothing we could do.”

Although the final decision made by the board was to fine UNC, Mercer said the University is not to blame.

“The issue only occurred because of the unexpected change in the law,” Mercer said.

“It was nothing the school did. They were working in accordance to the old rule.”

Prior to Thursday’s meeting, Farmer said there was nothing the University could do about the situation and all that was left was for the board to make its decision.

“The Board of Governors makes the decisions about this and that’s how it should be,” Farmer said.

“If they want to fine us that is their prerogative.”

The money will be returned to the UNC system and redistributed through need-based grants for all UNC-system schools.

UNC is not the only school to have done this recently.

In 2004 and 2005, UNC-Asheville was fined for the same reason.

East Carolina University in Greenville was fined last year.

Farmer said there have been instances where universities admitted extra out-of-state students for their tuition money, but he stressed the University was not using that strategy.

“I really want to stress that we are not one of those schools,” Farmer said.

“This was something we couldn’t control and we are just dealing with the effects.”

Chancellor Holden Thorp said the University is prepared to pay the fine in accordance with the policy.

“There is no way to fix this now, but we’re OK with paying the $158,000 fine if that will make everything easier,” Thorp said at the meeting.

Although the fine will cut into UNC’s already stressed budget, Farmer said the University can handle the repercussions and understands the problem.

“We take our obligation to the Board of Governors very seriously,” Farmer said.

“However, that’s not to deny that we have a problem in the current year.”

Contact the University Editor at university@dailytarheel.com.