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UNC’s tuition increase proposal not a surprise, administrators say

UNC’s tentative proposal to increase in-state tuition by 40 percent during a multi-year span far exceeds the UNC system’s cap, but administrators said they were not surprised by the proposal.

The system’s new Four Year Tuition Plan, which went into effect this academic year, maintains the system’s 6.5 percent cap on tuition increases.

It includes a clause allowing campuses to propose a one-time increase above the cap in order to “catch up” to their public peer institutions’ tuition rates, as long as they remain within the bottom quarter of those peers.

The board approved a new list of peer institutions for each system school in October. UNC’s public peers include the University of Virginia and the University of Michigan at Ann Arbor.

On Thursday, UNC’s tuition and fee advisory task force discussed increasing the in-state tuition rate by $2,800 during the next two to four years.

Administrators said UNC’s proposal does not overstep the bounds of the clause.

Board of Governors Chairwoman Hannah Gage said she is not surprised by UNC’s tuition increase discussion in light of the new clause, which she said a lot of campuses have interpreted as encouragement to propose increases exceeding the cap.

The previous four year plan allowed for exceptions to the cap for campuses with a significant unfunded need — but it didn’t encourage them, she said.

“I always felt that the original policy was more than adequate to deal with any compelling exception without encouraging or inviting campuses to come forward with exceptional requests.”

Charlie Perusse, the system’s vice president for finance, said state budget cuts — which have totaled more than $600 million in the last four years — have led schools to consider increasing tuition above the cap.

“It’s a natural response to ensure the academic excellence on campuses,” he said.

“The cumulative impact of state appropriation cuts have been substantial and there may be an inherent need to increase tuition revenues to ensure academic excellence at institutions.”

Each fall, the system sends a letter to each of its schools with guidelines for setting the next year’s tuition and fee rates.

Perusse wrote this year’s letter, which was sent to chancellors Oct. 18. He said the addition of the “catch up” clause is a major policy change from last year.

“We give the campuses general policy parameters and flexibility to recommend tuition rates as they deem appropriate for their institutions,” he said.

Gage said campuses will recommend tuition increases based the difference between their tuition rate and the bottom quarter of their public peers’ — a difference that gives them some room to increase tuition.

“Many of them will look at the new public peers and see how much head room they have, and then decide what’s feasible.”

According to the new plan, schools must justify why exceeding the cap is necessary and explain what the tuition revenue will fund.

The board will vote on tuition increase proposals in February.

“We’ve got to come up with an idea of what criteria we’ll use so that this doesn’t turn into a completely subjective discussion,” Gage said.

She said even though the board might receive more requests to increase tuition than it has in previous years, it still has the authority to deny them.

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“Nothing prevents our board from saying ‘no’ to any of these increases.”

David Young, chairman of the board’s budget and finance committee, agreed.

“I don’t think anything is given, even after it comes from the university,” he said. “That’s our obligation either to pass or decline increases that come from the university.”

Contact the State & National Editor at state@dailytarheel.com.