UNC system ponders opening doors wider to out-of-state students

jstancill@newsobserver.comJanuary 9, 2013 

  • About the cap The 18 percent cap on enrollment of out-of-state freshmen was adopted by the UNC Board of Governors in 1986. The limit does not apply to the UNC School of the Arts, a conservatory that attracts students from across the nation. Nor does it apply to the N.C. School of Science and Mathematics, a high school that does not admit out-of-state students. Starting in 1994, universities that surpassed the 18 percent limit two years in a row faced budget penalties, calculated on the basis of the number of excess students. A budget penalty of nearly $335,000 was waived for UNC-Chapel Hill last year. UNC-CH had exceeded the limit by 24 students in the second year. UNC Board of Governors members said the punishment would have been too harsh after a state budget cut of 17.9 percent in the same year. This fall, only N.C. A&T State University went over the 18 percent limit.

The UNC system, strapped for money for new initiatives, may take a step that has long been politically explosive in North Carolina: admitting more out-of-state students.

Unlike many public universities across the United States, the UNC system has for decades had an 18 percent limit on the number of out-of-state freshmen at its campuses. The cap – a way of preserving seats for the sons and daughters of North Carolina taxpayers – has been something of a sacred promise. Previous attempts to lift it have been met with heated debate, and ultimately, failure.

The issue re-emerged at a meeting of the UNC Advisory Committee on Strategic Directions, a panel of education, business and political leaders helping to craft a five-year plan for the university system. A draft of the plan proposes raising the proportion of the state’s adult population with college degrees, increasing online education, and investing in seven research areas that could be economic drivers in North Carolina’s future.

But paying for the new initiatives won’t be easy as the state deals with the aftermath of the recession and a stubbornly high unemployment rate.

That’s where out-of-staters and international students come in. They pay a much higher tuition rate. And some campuses, including UNC-Chapel Hill, East Carolina University and N.C. A&T State University are in big demand from applicants outside North Carolina. UNC-CH routinely bumps up against the 18 percent wall; there, North Carolina residents pay tuition and fees of $7,500, compared to $28,250 for out-of-state students.

Some university leaders have advocated for a higher cap in the past, arguing that highly accomplished out-of-state and international students add diversity and value to the classroom.

But that argument hasn’t gone anywhere in a state with generous support for higher education and a constitutional pledge for low tuition.

“What we’ve done in the past and what we’ve got to do going forward is be sure we strike a balance between our responsibility to the people of this state and our responsibility to provide the best education,” UNC President Tom Ross said. “All we’re suggesting in the plan is maybe we look at the balance, not that we go wild in one way or the other.”

International students

One approach, Ross said, would be to have an 18 percent cap for the system as a whole, so that some campuses could exceed and some wouldn’t. Another would be not to count international students in the out-of-state category.

UNC-CH Chancellor Holden Thorp likes that idea.

“Because the international students are included in the 18 percent, we’re far below our peers in terms of international students,” Thorp said, “and I personally don’t think that’s good for preparing students to be in the global economy.”

But some members of the UNC committee weren’t convinced.

“What do you do with the kid that got displaced, who is a North Carolina resident?” asked Lawrence Davenport, an N.C. State University trustee.

Ross said no seats would be taken away from North Carolinians. “You wouldn’t reduce the number of slots,” he said, “you’d increase enrollment.”

Frank Grainger, a member of the committee and of the UNC system’s Board of Governors, said changing the cap simply isn’t right. “I’m not interested in seeing a lot more coming from other states.”

Since the recession began, budget cuts have changed the university system’s financial picture. Though it is still well subsidized compared to universities in other states, tuition has become a larger source of funding. In 2007-2008, appropriations were nearly 73 percent of the operating budget; by 2012, appropriations accounted for about 66 percent.

‘We benefit substantially’

It’s unclear how the Republican-dominated legislature would receive the idea of raising the out-of-state cap. One lawmaker on the UNC advisory committee, Floyd McKissick, said he had no problem with it.

“I think we benefit substantially when we have out-of-state students,” said McKissick, a Durham Democrat. “And we have foreign students who offer not only a unique perspective in the classroom, but if you look at tuition they’re paying, it’s probably three times as great.”

Admitting more out-of-state students is only one idea to bring in more money. A recent five-year budget forecast for the state estimated that $200 million to $250 million in additional appropriations would be available. The UNC system also plans a more aggressive push for private fundraising.

At the same time, the system is looking at a range of efficiencies, including shared administrative functions among campuses, energy changes, and purchasing in bulk with other state agencies.

The budget woes in the past few years have already led the university system to cut its spending per degree from $75,926 in 2007-2008 to $66,692 in 2011-2012, while turning out more graduates.

The UNC system also wants greater authority to find savings in campus budgets and then keep the money for use on new initiatives. Now, the universities are limited to carrying forward 2.5 percent of their budgets from year to year. That leads to a “use it or lose it” mentality, said Charlie Perusse, UNC’s chief operating officer. He said the system would like to create an incentive for campuses to save money and carry forward 5 percent or more.

“We all know we’re in a tough fiscal environment,” Perusse said.

Stancill: 919-829-4559

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