The UNC-System Board of Governors voted unanimously in August — before classes had begun — to cap the tuition revenue used toward need-based aid at 15 percent.
UNC-CH is one of six schools which meets or exceeds the cap of 15 percent of tuition revenue used for need-based aid.
For the schools that meet or exceed the cap, the amount of tuition revenue used for need-based aid will be frozen at its current level.
Why it’s an issue
Forty-three percent of UNC-CH students receive need-based aid, according to a 2012-13 report by the University’s Committee on Scholarships, Awards and Student Aid.
It’s a form of financial aid that is partly funded by other students’ tuition dollars — which some Board of Governors members said unfairly burdens working families with paying for others’ tuition.
“To continually allocate the burden on working families who have to borrow money to send students to college is not a fair way,” said W.G. Champion Mitchell, a Board of Governors member who advocated for the cap.
“In many cases, if you look at the amount of debt, it’s about the same amount that’s being taken to give to other people. Is that fair to working families? I don’t think it is.”
The median parental income of need-based aid recipients is $59,630, according to the report by the University’s Committee on Scholarships, Awards and Student Aid.
In response to criticisms that the cap was rushed through, UNC-system President Tom Ross said the program was rolled out thoughtfully.
“The board is trying to protect need-based aid,” Ross said. “It’s not going to go away. Schools that are over that cap are not required to drop to that cap.”
Board of Governors members have also said schools above the 15 percent cap could pursue other funding sources or consider campus fundraising.
In response to the cap, North Carolina State University, one of the schools above the 15 percent cap, is implementing financial literacy programs on loan repayment, said Krista Domnick, director of North Carolina State’s financial aid office.
Four of the UNC-system’s historically black colleges are also above the 15 percent cap.
UNC-CH is getting increasingly expensive for both in-state and out-of-state students. The percentage of people receiving need-based in turn has slightly increased by 6 percentage points since 2009.
In-state tuition increased 87 percent in 10 years while out-of-state tuition increased 90 percent — and UNC-CH administrators say they worry the need-based aid cap will add to students’ debt burden.
The Office of Scholarship and Student Aid said the need-based aid cap would cause the average student’s debt to almost double — from $17,000 in loans to $33,000 — within three to four years, said Shirley Ort, the office’s associate provost and director, in an interview earlier this year.
Despite this increased debt and cost to the University, UNC-CH administrators say they are committed to meeting 100 percent of students’ demonstrated need — a promise that they say is key to the University’s diversity.
Chancellor Carol Folt said she’s considering using the University’s endowment to protect the Carolina Covenant, a need-based aid program.
Additionally, UNC-CH’s Student Government Executive Branch, led by Student Body President Andrew Powell, also partnered with Multicultural Affairs and Diversity Outreach and the Campus Y to raise awareness. They held the event “Student Stories: A 100% Need-Based Event” earlier this year.
Many students at the event expressed how need-based aid changed their ability to attend to UNC-CH.
Powell said there are many misconceptions about how need-based aid works.
“There was an idea that we were content with raising the overall price of tuition, if we would keep increasing aid incrementally, and they thought that’s a problem,” he said.
“Aid doesn’t drive tuition increases. Tuition increases drive requisite aid increases,” he said.
Student Congress and other members of Student Government have also been involved.
“Financial aid and need-based financial aid at UNC is essentially a public good,” said Student Body Vice President Kyle Villemain, who sat in on the discussion about need-based aid in October.
“It helps every single student here, not just the students who are receiving it.”
For Austin Glock Andrews, a UNC-CH student who is a Carolina Covenant scholar, the issue came down to accessibility.
“I come from a really rural community and an economically disadvantaged family,” he said.
“Basically I spent my entire senior year in high school filling out applications and trying to get any kind of scholarship... When I got into Carolina, obviously yay, but they met 100 percent of demonstrable need.
“I wouldn’t be able to go to college at all if it weren’t for my need-based aid.”