UNC-system Board of Governors seek financial aid solution

When UNC-CH students pay next year’s tuition bill, nearly a quarter of the check will go toward subsidizing other students’ education.

A large chunk of funding for need-based financial aid has historically come from tuition revenues. But some members of the UNC-system Board of Governors have criticized the funding model and called for changes.

“Is it fair to load debt onto (middle-class students) and onto their parents so that other people don’t have to take on debt? It’s a fundamental fairness issue,” said board member Champ Mitchell. “Nobody’s saying we should do away with need-based financial aid. We have to find alternative funding sources.”

The board had a policy discussion on Thursday about the issue, with chancellors at UNC-system schools pointing out the benefits of need-based aid to the make-up of student bodies.

At the board’s meeting on Friday, Mitchell proposed the board remove funds set aside for need-based aid from tuition for a new master’s degree in toxicology at UNC-CH.

But other members objected to addressing the issue in a piecemeal fashion.

“We understand the symbolic nature of that ... I think we’re all working toward this, however, it’s a new program,” said Louis Bissette, chairman of the budget and finance committee. “A lot of work has gone into it. I think our committee feels like this should go further and we should address this matter in a universal (way), not one program at a time.”

Members of the board agreed, prompting Mitchell to withdraw his motion.

“I agree with you that systematic is much more effective,” Mitchell said. “But when? When? When?

“We’ve been talking about it constantly ... you can either talk about it or you do something about it. We need to do something about it.”

Board chairman Peter Hans pledged to address the issue before the end of the year. He said at a news conference after the meeting that he’s unsure yet what form that will take — possibly a small working group.

“We’ve got to make sure whatever we do won’t have unintended consequences,” he said. “If we were to only remove the use of tuition proceeds for need-based aid, that would dramatically impact the availability of need-based aid — which I don’t think is the board’s intention.”

Fifty-nine percent of undergraduate students in the UNC system received need-based financial aid last academic year.

Need-based aid is mainly funded by federal programs like Pell Grants and loans. This year, the state spent $122.5 million toward need-based aid, with an additional $18 million from the N.C. Education Lottery.

But beginning this year, money set aside by the campuses from tuition revenue has become the largest nonfederal source of financial aid — $126 million.

The debate has been ongoing the last few years. Starting in 2006, the board required campuses to set aside at least 25 percent of tuition revenue for need-based aid — and in the 2010-11 year, the floor increased to 50 percent.

But in 2012, the board removed the minimum requirement, giving campuses flexibility, and appeasing board members who disagree with the practice entirely.

Now, with the addition of 16 new members — appointed by a Republican-dominated legislature — the issue has resurfaced.

As the board discussed funding need-based aid, students outside held up signs with messages like, “Education should not be a debt sentence.”

Student protesters from across the system were calling upon the board to commit to a plan that by 2020, no student will graduate with debt.

UNC-system President Tom Ross said at a news conference that the cost of meeting this goal would be substantial. He said the system is continuously trying to find ways to be more efficient.

“The goal of being debt-free is a great one, but it’s going to take a combination of factors to make that possible,” he said.

Hans said he had met with organizer and recent UNC-CH graduate Matt Hickson. He said he understands where the students are coming from.

Hickson was confident in the movement’s success.

“We have a message, by the way, that is going to win,” he said. “Today is but the start.”

Senior writer Hayley Fowler contributed reporting.

state@dailytarheel.com