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UNC leaders look at 5 percent cap on tuition, fee increases

RALEIGH Tuition and fee increases would be capped annually at 5 percent for in-state UNC system students for four years starting in 2015 under a proposal being considered by the governing board.

The UNC Board of Governors is beginning to devise a four-year plan to guide tuition-setting at the public universities across North Carolina. Such plans were started in 2006 to stabilize tuition rates and provide predictability for students and families across a four-year span.

The current four-year plan, which ends in 2015, limits increases to 6.5 percent annually on most fees and tuition for in-state undergraduates. But UNC system President Tom Ross earlier this year recommended a tuition freeze for in-state undergraduates for 2014-15. The UNC board will set tuition for next year in February.

Even though the recommended limit after 2015 is smaller, it comes with big caveats. The cap could be adjusted up or down, depending on cuts or increases in state appropriations.

More significantly, for the first time, the UNC campuses will not be required to set aside proceeds for student financial aid.

Earlier this year, the UNC board eliminated a provision in the tuition policy that mandated at least 25 percent of any tuition increase be funneled to financial aid. Board members were outspoken about their disagreement with the practice of raising tuition for all students, and then using a chunk of the revenue to cover the hike for financially needy students.

Campuses wouldn’t be barred from asking to use the tuition proceeds for financial aid, however. Any campus tuition request is decided by the Board of Governors.

Students are bearing more of the cost burden than they used to, said Peter Hans of Raleigh, chairman of the board.

A decade ago, he said, the ratio of state appropriations to tuition was 4-to-1. Now it’s 2-to-1, he said. “That’s an important factor to bear in mind as we have this discussion and others on the budget and finance of the university,” he said.

The board is likely to decide on the plan by March 2015. There are likely to be some changes to the proposal. For example, board members said they don’t like the idea of capping tuition increases at 5 percent for graduate students who are North Carolina residents.

“That’s a great growth area, and a little bit of market economics, I think, could be much more in play as there seems to be demand for graduate programs,” said David Powers, a board member from Winston-Salem.

Even though a 5 percent cap is lower than the current 6.5 percent limit, some were concerned that a 5 percent yearly increase is too much for many North Carolinians.

“I wonder if it continues to make our product too expensive for families that don’t qualify for financial aid – in other words, the middle class, people who make $40,000 to $70,000,” said John Fennebresque, a member from Charlotte.

Stancill: 919-829-4559
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