Extra fee proposed for UNC business majors as ‘a very last resort’

Steve Chapman leads a business lecture UNC-Chapel Hill on June 5, 2008.
Steve Chapman leads a business lecture UNC-Chapel Hill on June 5, 2008. N&O file photo

Students at the state’s public universities will see no tuition increase in the next academic year, but undergraduate business majors at UNC-Chapel Hill could get hit with a new fee.

The proposed fee – $2,000 a year for majors and $1,000 a year for minors – would be charged to students beginning in 2018-19 as part of a plan to expand undergraduate enrollment by 50 percent to meet rising demand. The fee would be an unusual step – what Kenan-Flagler Business School Dean Doug Shackelford called “a very last resort.”

The proposed tuition and fee rates were reviewed by the budget and finance committee of the UNC Board of Governors. A vote on the rates is expected in March.

For North Carolina residents, tuition would be flat at all schools, except for Elizabeth City State University, UNC Pembroke and Western Carolina University – the three campuses that are part of the new NC Promise reduced tuition program. At those schools, tuition will be $1,000 for in-state students and $5,000 for out-of-state students.

Out-of-state students could see increases at several campuses, including N.C. State University, where a $995 hike is proposed, and UNC-Chapel Hill, where a $600 increase is likely.

If the rates are approved by the board in March, annual tuition and fees for North Carolina students would be:

▪ $6,348 at N.C. Central University;

▪  $8,896 at N.C. State University;

▪ $8,758 at UNC-Chapel Hill.

Out-of-state tuition and fees would be:

▪ $19,055 at N.C. Central University;

▪ $28,239 at N.C. State University;

▪ $34,941 at UNC-Chapel Hill.

The total price would be higher, though, because of room, board and book costs.

The Kenan-Flagler Business School fee attracted most of the attention Thursday. Special fees for specific academic programs are rare in the UNC system. Such fees are charged for particularly expensive programs such as dentistry at East Carolina, aviation at Elizabeth City State and engineering at NCSU.

Shackelford said the school can’t afford to expand undergraduate enrollment without the special fee and donations it is seeking from alumni. Under the plan, the fee revenue would help allow the undergraduate program to grow from 800 now to 1,200 in 2026. By 2025, special fees would climb to $4,000 a year for majors and $2,000 a year for minors.

The dean said about half the students who apply now to UNC’s business school in their sophomore year are turned away. As a result the competition is intense – the average grade point average for business majors is 3.73, and the average SAT score is 1380.

“We have a great deal of interest in getting in to that program,” Shackelford said.

Shackelford said the school would cover the cost for students who are eligible for financial aid. But most students will be able to absorb the fee, he added, because the average starting salary of a business school graduate is more than $60,000, according to 2014 data.

He said UNC’s business school is the only public school among the top 25 without special tuition or fee rates. Even with the increase, he said, Kenan-Flagler would remain the least expensive among the top 25.

Still, a few board members were somewhat skeptical. One remarked that it was unusual. The board’s student representative, Tyler Hardin of Appalachian State University, asked the dean about the process and whether students were involved. He pointed out that the students who have to buy health insurance face higher premiums, as well. “That’s a lot of money for students,” he said.

“Well, I would like to say it was a deep, scientific process we went through,” Shackelford said. “I can’t really say that. I think we thought that figure sounded about a reasonable amount. If you think it should be higher, we would accept the higher figure.”

Shackelford said students accepted it because they want to have greater access to the business major.

Board member Bob Rucho, a dentist and former legislator from Matthews, asked why the business school is running at a deficit. “Tell me how that happens,” he said.

“Business school faculty are scarce and extremely expensive,” Shackelford said. “I compete with Wall Street for my finance faculty.”

Several board members said they liked the idea of different tuition rates for different programs, and would like to see the university adopt that approach.

Board member David Powers, a Raleigh lobbyist, said charging a higher rate was almost a teaching moment for business students.

“I think this is an extremely good idea,” he said. “I think it’s a very sound idea. I know you can’t operate the university entirely like a business. The university is not an entirely free market. What a better lesson to teach business students, that if you’re willing to make a relatively small investment, you can get a very nice return for the rest of your working career off of.”

Jane Stancill: 919-829-4559, @janestancill