UNC system talks about out-of-state tuition changes, debate cap

In the next three months, the UNC-system Board of Governors will be reviewing the Four Year Tuition Plan, which was created in 2006 by system President Erskine Bowles to provide more stability to the tuition process.

The board is considering several recommendations.

In the next few weeks, the Daily Tar Heel will take a closer look at each of the seven policy recommendations.

State budget cuts have forced universities to make up for lost funding by disproportionately increasing tuition for out-of-state undergraduate students.

The UNC-system Board of Governors is in the process of reviewing the Four Year Tuition Plan, and a tuition task force is recommending the board discuss whether individual schools in the system need more flexibility for setting out-of-state tuition rates.

But it is only a discussion — the plan for out-of-state tuition is unlikely to change.

Board members said the plan already gives campuses enough room to increase out-of-state tuition. In fact, campuses aren’t close to pushing the limit on out-of-state tuition.

Under the current tuition plan, out-of-state tuition for UNC-system campuses must stay below the 75th percentile of out-of-state tuition at each campus’ public peer institutions, said Brent Barringer, a board member.

The board will discuss throwing out that cap and making out-of-state tuition increases market-based to give campuses more flexibility to increase tuition, Barringer said.

Tuition for out-of-state undergraduates at UNC-CH increased to $23,432 this year — a 7.7 percent increase from last year.

Even with the significant increase this year, based on UNC-CH’s public peers’ out-of-state rates, there’s still room for the University to raise out-of-state tuition up to $31,350.

In setting tuition rates based on the market, campuses would ensure that their out-of-state tuition is fair when compared to their public peer institutions, said Charles Mercer, chairman of the board’s budget and finance committee.

Establishing reasonable tuition rates and maintaining the quality of out-of-state applicants are two important factors the board is considering, Mercer said.

The 75th percentile is a fairly meaningless ceiling because none of the UNC-system campuses are coming close to surpassing it, Barringer said.

UNC-CH has 15 peer institutions, including the University of Michigan-Ann Arbor, the University of California-Berkeley and the University of Virginia. The 75th percentile of their out-of-state tuition comes to $31,350.

If the board decides to get rid of the 75th percentile cap, out-of-state students at UNC-CH could potentially be paying more than that limit.

But Barringer and other board members say a substantial increase like that is highly unlikely.

‘No meat left’

The discussion about tuition extends beyond eliminating the 75th percentile cap.

It’s important for these revisions to be considered because UNC-system universities have cut budgets to the bone, UNC-Charlotte Board of Trustees Chairman Eugene Johnson said.

“There’s really no meat left to cut out,” he said.

With state funding to continue decreasing and federal stimulus funds running out, the difference has to be made up in tuition increases.

“I expect that tuition will go up this year to help relieve some of the shortfall that we are going to be given by the legislature in the budget they give us,” John Ellison, a member of the UNC-CH Board of Trustees, said.

But Ellison said he does not think that campuses need increased flexibility to make the necessary tuition increases. The 6.5 percent increase cap for in-state tuition would be significant enough if applied to out-of-state tuition, he said.

“I can’t imagine that we would recommend anything larger than that,” he said.

Tuition increases are expected, and they would be acceptable as long as need-based aid stays consistent and tuition stays reasonable, fair and affordable, board members say.

“I’m perfectly fine with throwing the cap out, as long as we don’t raise tuition in a way that will deter students from applying,” Johnson said.

Contact the State & National Editor at stntdesk@unc.edu.