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UNC-system Board of Governors to review 2006 tuition plan

Economy might factor in changes

Four years ago, the tuition process for UNC-system schools was unpredictable and chaotic.

But UNC-system President Erskine Bowles’ Four Year Tuition Plan changed that.

The plan makes tuition more affordable and predictable for students, setting caps on campus-initiated tuition increases and laying out a framework for campuses to use the revenue from the increases.

Four Year Tuition Plan basics 

The plan: Approved by the UNC-system Board of Governors in 2006, the tuition policy requires universities to:

-Cap undergraduate resident increases at 6.5 percent

-Keep rates for undergraduate residents in the bottom quartile of each campus’ public peers and below the top-quarter for non-resident undergraduate students

-Use 25 percent of the new tuition revenue for need-based financial aid and another 25 percent for increasing faculty salaries

The UNC-system Board of Governors will be reviewing the plan in the upcoming months and making recommendations, which could mean an increase in tuition, changes to how campuses can use the tuition money or no change at all.

“People seem pretty pleased (with the plan), but that doesn’t mean we can’t tweak it. I don’t think we have to go back to ground zero,” said John Davis III, chairman of the board’s budget and finance committee, which will most likely be in charge of the review.

Bob Winston, chairman of the Board of Trustees at UNC-CH, said he wants the Board of Governors to consider increasing the 6.5 percent cap on undergraduate residents for schools like UNC-CH that are well below peer schools in tuition rates.

“We’ve won Kiplinger’s best value university for 11 years in a row. Certainly there’s headroom,” Winston said.

But Hannah Gage, chairwoman of the board, said in an e-mail that she doesn’t anticipate a change in the cap despite that.

“I would be surprised if we raised the tuition cap above its current level, but I would not be surprised if we discuss the kind of flexibility we might need should the economy not bounce back in the next 24 months,” she said.

She said the board would only consider increasing the cap if funding from the legislature declined drastically. A more flexible plan would allow them to make that decision.

“It’s really about preparing a Plan B but hoping we never need it,” Gage said.

The cap has played a key role in making tuition predictable — one of the main goals of the plan.

Before the plan was implemented in 2006, there were no fixed criteria for determining tuition increases, Gage said.

“It was not unusual for us to debate the tuition issue for months at a time and our decisions were inconsistent from year to year without any framework,” Gage said.

“Once the policy was in place, and our decisions were driven by data, most of the emotional component was eliminated.”

UNC-system Association of Student Governments President Greg Doucette said he remembers a 2005 Board of Governors meeting in which members debated tuition rates for almost five hours.

“It really was a mess. Since there was no fixed process, every group was fighting at every level,” Doucette said.

But Winston said the plan did not have as much of an impact on the tuition process at the trustee level.

“It definitely lowers the number of proposals we can have at the table,” Winston said. “I’m not sure for us it does a whole lot more.”

Doucette said the part of the plan most in need of review is the framework for the distribution of the revenue from the tuition increases — specifically the 25 percent that goes toward increasing faculty salaries.

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“Until the economy improves, I’m not convinced the money needs to go to increasing faculty salaries,” Doucette said.

The focus of the review will be to make sure universities have funds to stay competitive while keeping tuition low, Davis said.

“The fact is that constitutionally we’re supposed to keep tuition as low as practical,” Davis said. “Now what the hell does that mean?”

Contact the State & National Editor at stntdesk@unc.edu.

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