Introduction
Article IX, Section 9 of the North Carolina Constitution states, “The General Assembly shall provide that the benefits of The University of North Carolina and other public institutions of higher education, as far as practicable, be extended to the people of the State free of expense.” In 1789, the North Carolina General Assembly granted a charter to the University of North Carolina in Chapel Hill, making it one of the oldest public universities in the United States. Today, 16 public universities and the North Carolina School of Science and Math are part of the University of North Carolina (UNC) System.
Consistent with the constitutional mandate, affordability has been a distinctive focus of the UNC System. Because of grants to students, UNC-Chapel Hill perennially ranks as one of the best values among colleges and universities in the country. It also ranked the sixth lowest in net price after aid ($11,100) across the UNC system in 2016-17, the last year comparable numbers are available through the National Center for Education Statistics.
In addition, three universities that traditionally serve students from high-poverty, low-opportunity communities (Elizabeth City State University, UNC Pembroke, and Western Carolina University) cut tuition in 2018 to $1,000 for North Carolina residents and $5,000 for non-residents as part of NC Promise. Once other fees and room and board are included, annual prices climb to $19,000 at ECSU, $15,000 at UNC Pembroke, and $16,000 at Western Carolina before books and other expenses.
Thanks to the state legislature, all UNC schools guarantee fixed tuition for students completing their degree in four years. The state pays the cost of the UNC System Need-Based Grant, which provides last-dollar funding for students. Each school will often add grants of its own financed either from charitable giving or tuition receipts.
Purdue University in Indiana, a public land grant institution that is similar to NC State University, has taken a different approach. Purdue has reduced administrative costs to keep tuition and fees flat since 2013 and has already set the 2020-21 price, when other schools had not yet determined their tuition and fees for the 2019-20 year. As a result of Purdue’s ability to keep prices low, students’ average annual borrowing fell from $5,451 in the 2010-11 school year to $3,657 in the 2017-18 year.
Purdue’s net tuition has fallen $1,424, or 11 percent since 2013. After being $1,412 above tuition at the highest UNC System school, Purdue is now lower than eight UNC schools, though still $1,017 higher than UNC-Chapel Hill. Surprisingly, Purdue has accomplished this not with higher revenues, which grew at a similar rate as North Carolina’s flagship schools, or through more out-of-state or international enrollment. Instead, Purdue reduced a broad swath of administrative costs by 5 percent between 2012-13 and 2016-17, while it increased instructional spending by 25 percent. Elements of Purdue’s strategic reforms may be worth replicating in North Carolina.
No discussion about affordability would be complete without mentioning the North Carolina Community College System’s 58 colleges. These institutions provide two-year degrees and articulation agreements that allow students to transfer their credits directly towards a four-year degree. Community colleges can be a great option for students, thanks to lower costs and more flexible options designed around commuting students.
Key Facts
- At most UNC System schools, North Carolina residents must comprise 82 percent or more of undergraduate enrollment. NC A&T (70 to 80 percent range) and the UNC School of the Arts (40 to 50 percent range) are the two exceptions to this rule.
- In-state tuition and fees jumped an average of 45 percent between the 2008-09 and 2013-14 school years but increased just 7 percent through 2017-18 before falling in 2018-19, due to the introduction of $1,000 tuition at three NC Promise schools: Elizabeth City State University, UNC-Pembroke, and Western Carolina University.
- UNC System endowments have grown 32 percent, from a combined $3.7 billion in 2012-13 to $4.9 billion in 2016-17.
- Community college funding is based on enrollment the previous year. UNC plans to adopt a similar model of funding based on actual credit hours completed instead of projected enrollment.
Recommendations
- Freeze tuition and fees. Build on NC Promise, Guaranteed Tuition (four years from entry), and the Carolina Covenant to improve affordability and access.
- Cut non-instructional staff and costs. Purdue University’s experience since 2012-13 shows it is possible to reduce administrative costs, particularly at flagship schools.
- Improve graduation rates and time to completion across the system. Six UNC schools graduate less than half of their students. Only UNC-Chapel Hill and the UNC School of the Arts have 4-year graduation rates above 60 percent. The key to affordable education is having a degree on the other side that makes the investment worthwhile.
- Improve articulation between schools in the Community College System and UNC System. Articulation reduces cost for students and prepares them appropriately for the program they wish to enter. The system-level structure is in place. Implementation is the next step.
- Use revenue from alcohol sales at sporting events to reduce athletic fees for students. Now that schools can sell alcohol at sporting events, the revenue should be used to offset student fees.
