Income-Based Tuition Plan Under Study

Senate President Pro Tem Marc Basnight, D-Dare, one of the state's most influential politicians, recently asked his legislative staff to study alternative ways to appropriate higher-education funding, including how to fund new enrollees.

Basnight said one of the aspects the staff is studying is a plan that would base tuition on a student's family income. The extra money paid by affluent students would be used to provide financial aid for lower-income students and fund some university programs. "I don't know if it's a good or bad idea," he said. "That's why it's being studied."

Basnight said staff members also are investigating establishing a grant fund where students could withdraw money and then repay it. "If you're in the middle-income bracket, we should help subsidize your education, but you should repay some of it."

He pointed to income taxes, which base payment partly on a person's income. "Depending on your ability to pay is what you pay," he said. "It's part of the American system."

Basnight said the decision to examine funding was partly prompted by UNC-Chapel Hill's slip in the U.S. News and World Report rankings. "The declines are so shocking that we've got to do something about it," he said, pointing out that UNC-CH recently fell out of the top 25 schools in the magazine's list.

Basnight also pointed to the low amount it cost his daughter, Caroline, to attend UNC-CH. "We could definitely have afforded to pay more (for her education)," he said.

UNC-system President Molly Broad said Basnight's proposal likely would expand access to universities but added that tying tuition payments to income would result in difficulties. "Once you move from the objective and move into the details, we find a number of insurmountable problems," she said. "Families of significant means are sometimes unwilling to reveal their financial circumstances. They believe that they are paying significant taxes already and that they should not get double duty."

Broad said the tuition proposal would also require a significant amount of administrative oversight, since all students would "essentially have to file a financial aid application."

She said the UNC system already has effective plans in place to help low-income students, pointing to need-based aid and early-intervention programs that prepare students for college.

Sen. Walter Dalton, D-Rutherford, chairman of the Senate Higher Education Committee, said Basnight's proposal is a bold move and might be appropriate given the state's multimillion dollar budget shortfall. "I think it's an intriguing idea and a responsible way to approach the situation," Dalton said.

Dalton expressed some concern about the difficulty of administering such a plan. But he said legislators have plenty of time to hammer out the logistics.

Dalton said many issues, including how the plan would affect out-of-state tuition, will be addressed during the legislative session that begins in May. He said the plan is now too vague to determine how students would be affected.

Senate Majority Leader Tony Rand, D-Cumberland, said he thinks the proposal likely would have solid support in the legislature. He said it is necessary to examine various tuition models before deciding which is appropriate for the state. "I think it's certainly something that should be examined," he said.

Rand also said he thinks income-based tuition would give lower-income students more opportunities to attend college. "Obviously it would cost some more than others," he said. "(But) others would be able to afford it."

The State & National Editor can be reached at stntdesk@unc.edu.