A shortage of resources has kept the project offline until Jan. 1, 2002.
"We deferred instituting it until January because we didn't have enough buses," said Chapel Hill Mayor Rosemary Waldorf.
Carolyn Elfland, vice chancellor for auxiliary services, said the transit system is getting six new buses to handle the strain that is expected to accompany free services.
"It should cut down on (traffic)," she said.
UNC will get two additional transit routes and a new U bus route.
Elfland said the extra U bus, called the EU for East U, will aim to relieve the burden on the U buses and will extend service to the eastern portion of campus, the UNC Law School, Ridge Road and South Road.
Fare-free service will be financed by transit funds from Chapel Hill and Carrboro in addition to the increase in student fees.
The increase that students approved in February will charge undergraduate students an additional $8.49 per semester in fees, and summer school students will be charged an extra $1.49 per credit hour.
But Roger Patterson, associate vice chancellor for finance, said the actual amount for the fees has yet to be finalized.