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UNC system puts brakes on using tuition revenue for need-based aid

North Carolina’s public universities can’t keep turning to tuition revenues to fund need-based aid for lower-income students, a move could lessen how much aid is available for coming classes and lead some to take on more student loans.

The university system’s Board of Governors unanimously passed a four-year tuition proposal Friday that puts a 15 percent cap on how much tuition money schools can use for need-based aid to help lower-income students.

The need-based aid proposal also freezes the dollar amount that goes to need-based aid at five campuses that are at or exceed the 15 percent mark – Elizabeth City State University ($470,584), Fayetteville State University ($328,869), N.C. State University ($7.3 million)and the University of North Carolina at Chapel Hill ($19.1 million) and Winston Salem-State University ($190,089).

From UNC presentation on tuition plan

From UNC presentation on tuition plan

Click here to read an outline of the “Cap and Freeze” proposal.

There was no discussion at Friday’s meeting, though Board of Governor’s member Hannah Gage did remark after the vote that she wished more information was shared about the expected impact on campuses.

“We had no discussion whatsoever about the unintended consequences,” Gage said. “I don’t think anybody has any real idea about what the debt levels will be at the five campuses.”

The 32-member UNC Board of Governors also gave campuses the ability to raise tuition annually by five percent, though chancellors and schools will still need to get permission from the board for any changes.

All of the UNC system’s 16 university campuses divert portions of tuition money to give aid to low-income students, as well as those who come from middle-class families, to help fill the gap between what they can afford to pay and tuition costs.

“It was a difficult decision,” said John Fennebresque, a Charlotte attorney and the chairman of the UNC board, in comments to reporters after the meeting. “This will cause problems for some people on some campuses.”

No major effects are expected for this upcoming year, but it could mean students in families that earn too much for federal and other state aid programs may take on more loans to pay for school.

Campuses can fill in the gaps through private fundraising, said Fennebresque and John Souza, a Board of Governor’s member from Raleigh.

Fennebresque said the board’s intention is not to limit access to higher education, and said that in coming years, the board would review how the policy plays out at individual campuses.

Unc Tuition Need Based by NC Policy Watch

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