UNC-CH faces penalty

School exceeds cap on out-of-state freshmen

Staff WriterFebruary 10, 2011 

— UNC-Chapel Hill will likely get docked more than $158,000 this week for enrolling more out-of-state students than it should have last fall.

UNC-CH exceeded the UNC system's 18 percent cap on out-of-state freshmen, a ceiling installed in 1994 to ensure adequate college access for North Carolinians. It went over by 13 students in a total class of 3,960. That's three-tenths of one percent above the cap.

The result: a budget reduction of $158,225 - the amount the state will spend to educate those extra nonresidents this year.

The penalty kicks in when a public university exceeds the cap two years in a row. The prior year, UNC-CH enrolled 12 more out-of-state students than it should have.

Even with the budget reduction, the university should come out ahead on the additional out-of-state students, since their tuition rate is nearly five times higher than for in-state students.

This year, the over-enrollment came about after the state legislature ended a five-year subsidy that had allowed universities to count out-of-state scholarship athletes as in-state students. That had been a financial jackpot for booster clubs by allowing them to provide scholarships to out-of-state athletes at a far cheaper rate.

But the provision's repeal last summer meant 38 out-of-state freshman athletes would not be counted as in-state students. The change came after UNC-CH had sent out its acceptance letters.

"We didn't know that law was going to be repealed," said Stephen Farmer, UNC-CH's undergraduate admissions director. "There really wasn't anything we could do about it at that point."

A committee of UNC system's governing board will review the penalty today, and Farmer said he doesn't expect his campus to dispute it.

Law helps schools

Higher education officials like to say admissions is more art than science. They offer entry to far more students than they want, assuming that some will go elsewhere. Had the residency status of those 38 athletes not changed because of the change in law, the university would have had a 25-student cushion and would have been comfortably under the 18 percent limit, Farmer said.

The change in law was a blow to booster clubs but a boon to universities themselves, since they collect more revenue based on out-of-state rates. At UNC-CH this year, in-state tuition is $4,815, while the out-of-state rate is $23,430.

The 18 percent cap is serious business for a university system that prides itself on being accessible and affordable for North Carolinians. It is rare, though not unheard of, for a campus to miss the cap two years running.

"It's our way of regulating the campuses with high out-of-state demand," said Hannah Gage, chairwoman of the UNC system's Board of Governors. "You see this from time to time, and the campus suffers the consequences."

No other campus violated the policy this year.

eric.ferreri@newsobserver.com or 919-932-2008

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