The inability of some UNC scholarships to keep pace with recent tuition increases could be letting top students slip away to other universities, officials say.
While UNC's tuition has seen two increases in the past two years, many of the University's 800-plus endowed scholarships have not been adjusted accordingly, said Shirley Ort, director of scholarships and student aid.
"In our experience last year, we saw that we were losing students because of merit scholarship offers from other schools," Ort said.
She said these competitors include the University of Virginia, Davidson College, N.C. State University, Wake Forest University and Duke University.
Endowed scholarships, such as the Carolina Scholars Awards, come from donations invested at an assumed 5 percent to 6 percent interest rate. The money earned from the interest is used to fund the endowed scholarships, with a specified amount being allocated to each student.
"For decades people have been creating endowed scholarships, and we are able to forever spend the interest off that initial gift," Ort said. "With the recent increase in tuition, however, the money just doesn't go as far."
Dan Thornton, senior associate director of academic scholarships, said the distribution of endowed funds is predetermined by donors and the University and that donors must approve efforts to increase scholarships amounts.
"It doesn't work that as soon as tuition increases, we can go and give more money," Thornton said.
Ort said these restrictions primarily hurt those students ineligible for need-based aid and those who receive merit scholarships in fixed amounts.
Her concern is reflected by Director of Admissions Jerry Lucido's efforts to recruit the most qualified students.
Each year the admissions office distributes surveys to accepted students to better understand what causes them to accept or decline enrollment in UNC. "Of those students offered a scholarship by the University this year, 27.3 percent were enrolled by UNC and 45.8 percent chose to go to other schools," Lucido said. "To us, this means that scholarships weren't as competitive as they should be."
But Mark Yusko, chief investment officer of UNC, said he sees the tuition increase as a potential marketing tool.
"There is a relationship in the marketplace between price and quality," he said. "You don't want to be perceived in the marketplace as being of lesser quality because your tuition is significantly lower than your peer group."
Yusko said the University has not necessarily seen the quality of students diminish as a result of many endowed scholarships not increasing. "Our freshman class is the most talented we've ever had," he said. "Something's working."
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