In setting tuition in the future, University of North Carolina system leaders may look nationally at the rates other public universities charge.

Given the escalating cost of higher education around the United States, that is likely to mean bigger bills for students in North Carolina.

A UNC system tuition task force agreed Thursday to consider a plan that would routinely allow campus increases as long as tuition and fees for in-state undergraduates remain in the bottom quarter compared to rates at similar public universities around the country. Rates for out-of-state students could climb higher as long as charges remain below the top quarter of schools nationally.

At the same time, the plan would establish a limit on increases each year based on a three-year average of campus increases nationwide.

The task force then put the issue on hold until early next year, so that UNC President-elect Erskine Bowles can offer his opinion.

The group was formed during the summer after the prickly legislative debate on whether to allow UNC-Chapel Hill and N.C. State University control over their own tuition rates without getting approval from the systemwide Board of Governors. Leaders at the two universities say they need to raise tuition to remain competitive and pay professors better salaries.

The draft guidelines would give the two big campuses more flexibility by allowing them to propose their own sets of peer universities for tuition purposes.

Each of the 16 campuses in the UNC system has its own set of approved peer campuses -- public and private -- that have similar characteristics such as size, quality and type of academic programs. The campuses use these lists for comparisons on things such as professors' salaries.

The peer lists, which are under review by a consultant, could become much more important if UNC uses them to set tuition. Student costs in North Carolina would then fluctuate with the market.

UNC Board of Governors Vice Chairman Craig Souza expressed concern that the peer lists for NCSU and UNC-CH could be manipulated to "get the answer we wanted."

But Hannah Gage, co-chairwoman of the task force, disputed that, saying, "We're not looking at anything to game the system."

Under the guidelines, campuses that do not give adequate financial aid to needy students would face tougher scrutiny. But the whole conversation is a touchy issue in a state where the constitution guarantees a free education "as far as practicable."

Although the poorest students are often covered by financial aid, those with moderate income will feel the squeeze, UNC board member Gladys Robinson said. "What do we do to help these students, because those are the ones who may drop out in two years?" she asked.

The guidelines could affect tuition rates starting in 2007.

Also Thursday, the board's budget and finance committee turned its attention to tuition for next fall, recommending limits of $451 in tuition and fee increases at NCSU and UNC-CH, or as much as a 10 percent increase for in-state students. The cap for N.C. Central University would be a $322 increase, or a little more than 10 percent more than the current rate.

The committee's limits on increases range from $271 to $451 across the system. The board will consider campus requests for tuition increases in February.

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