Long a model of quality and affordability, the UNC system will grapple today with fears that both may be at risk.
The UNC system's Board of Governors will take action today and Friday on tuition for the 2012-13 academic year. The deliberations take on heightened scrutiny this year as national debate surrounds the issue of the rising cost of higher education. Last month, President Barack Obama proposed a new system that would distribute federal financial aid dollars to colleges that keep prices down.
UNC President Tom Ross has recommended in-state undergraduate tuition and fee increases that average 8.8 percent. He aims to keep any campus hike under 10 percent, though leaders from N.C. State, UNC-Chapel Hill and several other universities say they need higher tuition to maintain academic quality after a significant state budget cut.
Meanwhile, there is simmering anger among students, who say the tuition escalation is extreme for North Carolina, a state with a constitutional provision guaranteeing a free education "as far as practicable." Students plan to march to the board meeting Friday morning in Chapel Hill.
Juan Miranda, a UNC Greensboro senior from Charlotte, is helping to organize carpools of students from Greensboro to Chapel Hill.
"It's getting to the point where everybody's been hit by it," Miranda said. "I believe education should be a right, not a privilege. Now it seems like that's what it's becoming."
A college degree has traditionally been a ticket to the middle class, but as prices rise and student debt grows, the promise seems to be getting beyond the reach of some. Higher education costs are rising faster than inflation and health care in the United States, where student loan debt now surpasses credit card debt.
Students at North Carolina's public campuses saw a steep rise in price in the past decade.
In 2000, UNC campuses were given the latitude to ask for tuition increases from the UNC system board. Since then, tuition and fees for in-state students have jumped 150 percent at NCSU and UNC-CH. During the 12-year period, campus-initiated tuition increases generated a total of $1.1 billion in revenue for all 16 universities.
A chunk of that revenue was set aside for financial aid for needy students. At the same time, a state need-based grant program that was started in 1999 helped keep prices down for many students. That program, which gave grants to low- to middle-income students, cost $6 million in 2000 and $162 million in 2010.
So even though tuition has grown dramatically here, North Carolina's public campuses still rate highly on national "best buy" rankings.
Last year, though, need-based grant money from the state dropped off by $35 million. If that trend continues, North Carolina students could rack up more debt.
Steve Brooks, executive director of the State Education Assistance Authority, said UNC's tuition increases have traditionally been accompanied by adequate financial aid. But the state can't keep losing ground on financial aid dollars as it did this year, he added.
"If we get to an era where we don't have any increases in aid and tuition keeps going up, we've got a real problem coming," he said. "That's when students are going to have to turn to loans that never have before. That's worrisome."
According to the Project on Student Debt, a national organization that tracks borrowing, North Carolina's debt levels are below the national average. In 2010, 53 percent of North Carolina students graduating from college had debt, and the average indebtedness was $20,959, compared with $25,250 nationally.
Working to avoid debt
Arima Claypool, a UNC-CH senior from Sacramento, Calif., has worked during her college years to avoid big debt.
Her parents, who were in the real estate business in California, help her with her tuition. But she works two jobs on campus - about 40 hours a week - for living expenses and to pay off student loans she incurred for study abroad programs in Spain and Africa. In addition to her regular jobs, she sometimes picks up work babysitting, gardening or delivering food for an Asian restaurant.
She is down to $700 in unsubsidized loans from the federal government, and $5,000 in subsidized loans. She plans to pay off the $700 by the time she graduates, then join the Peace Corps for four years. That may qualify her for a waiver of the other loan.
Claypool would like to pursue graduate school, because she wants to develop sustainable agriculture in Africa someday. But she can't consider it right now.
"I'm not in a place financially that I can do that," she said.
Many of her friends have amassed more debt than she has, Arima said, as tuition has climbed.
"To me it seems like every year, we're raising it the maximum that we can," she said. "It's really going to start pricing people out of school."
Anxiety has risen along with tuition increases.
Before the recession, Brooks said, most people used to count on handling student loans with their future paychecks. Now, with jobs scarce, students fear they will have a hard time coping with the debt. "I think students borrowing in 2012 probably think about it differently than people who borrowed in 2007," Brooks said.
UNC-CH leaders advocated an 11.4 percent increase in tuition and fees next year, the first year in a multiyear plan for hikes. Holden Thorp, UNC-CH chancellor, said the campus needs an infusion of revenue to cope with a state budget cut of 18 percent that has led to crowded classes and fewer course offerings.
"We've done a wonderful job of keeping the tuition down at a time when Virginia and the (University of California) are charging twice what we're charging," he said.
Debt levels of UNC-CH students are actually lower, in real dollars, than 12 years ago, Thorp said. The average debt load of UNC-CH graduates is $15,500, compared to $18,000 in inflation-adjusted dollars in 2000. "That's something to be proud of," Thorp said.
But students at UNC-CH are generally more affluent than those at other UNC system campuses, and the Chapel Hill campus has more scholarships from private donors.
Today, as the UNC Board of Governors discusses tuition, pressure is mounting not only from students but from parents, former board members and outside observers.
Former board members wrote letters asking the board to reject the proposed increases. Another group, the American Council of Trustees and Alumni, weighed in with letters asking the board to stick to a 6.5 percent cap on tuition increases that had been in effect in recent years.
Anne Neal, president of the organization, said North Carolina is in a position to set an example for other states in an environment when higher education spending is out of control. "There is a growing sense that this current path of ever-rising tuitions and ever-rising costs is just unsustainable," she said.
Neal's group recommends structural changes in universities and academic program reviews.
"They trim, but what really is necessary here is thinking about doing things differently," she said. "It's as if the universities don't care about what's going on around them, as if they think they should somehow be immune from the same economic consequences that are affecting the students and families that want to go to the colleges in North Carolina."
In a memo to UNC board members this week, Ross pledged that he will focus on three areas of cost containment in the year ahead: greater operational and academic efficiencies, making effective use of technologies and a review of financial aid.
"The issues are difficult, but it is my responsibility to recommend to you what I believe is right for the University," Ross wrote.
Hannah Gage, chairwoman of the Board of Governors, said it will consider Ross' recommendations carefully.
"Public university spending is under assault right now, and we've got to act in a way that shows everybody that we're really trying to contain costs," she said.