Durham County

Report shows UNC tuition spending on student aid to remain flat

As a percentage cap imposed by its Board of Governors takes deeper hold, the UNC system’s 16 universities aren’t likely to spend much more of their tuition revenue on financial aid for low- and middle-income students in 2017-18 than they do now, a report from the public university system says.

System officials estimate that North Carolina’s 16 public universities will channel about $207.3 million into “need-based” aid, an increase of $546,660 and 0.26 percent over figures from 2016-17.

Five campuses — Fayetteville State, N.C. A&T State, UNC-Asheville, UNC-Charlotte and the UNC School of the Arts — expect to use slightly more tuition revenue on student aid in the coming year. The rest are keeping their allocations flat and four, UNC-Chapel Hill, N.C. State, Elizabeth City State and Winston-Salem State, are under orders to keep them flat until they’re under the board’s cap.

Board members decided in 2014 to bar all the campuses from devoting more than 15 percent of their tuition revenue to need-based aid. Supporters of the policy argued it removes an incentive for the universities to increase tuition, and that the use of tuition for need-based aid is an improper form of income redistribution.

Capped though it is, UNC-Chapel Hill will continue to use $66.2 million of tuition money to support aid programs in 2017-18. That’s likely a fair fraction of all the money it plows into scholarships and other aid programs. Overall, auditors say it supplied $102.9 million in tuition discounts to students in 2015-16.

It’s likely to be at least a couple more years before the Chapel Hill campus gets under the 15 percent benchmark, as it’s on track to spend 19.4 percent of its tuition money on need-based aid in 2017-18. When the board imposed the cap, Chancellor Carol Folt’s institution was using nearly 21 percent of its tuition revenue on aid.

N.C. State is almost back under the cap, as its nearly $45 million allocation of tuition to its aid program gives back 15.1 percent of its revenue.

Winston-Salem State is also close to being under the cap. Elizabeth City State isn’t, given that its $1.7 million allotment amounts to 34.4 percent of all its tuition revenue. Enrollment declines and consequent revenue losses at the coastal campus have likely exacerbated its policy breach, though a legislatively mandated reduction of tuition there is likely to change the picture substantially come 2018-19.

UNC officials issued the annual report amid a continuing debate in higher-ed circles nationally about tuition discounts and the best way to ensure that talented low- and middle-income students can afford to go to college.

The issue plays out even at Duke University, a private school that spends about $115 million a year on need-based aid, with about 70 percent of that coming from tuition proceeds.

Duke officials evidently don’t share the UNC board’s objections to income redistribution. The school’s departing president, Richard Brodhead, told faculty leaders last week that universities have to face the fact that for many students, “the path to college remains unequal and growingly unequal,” because of factors that accumulate even before they’re born.

“Working against this deeply established social bias takes institutional commitment and enormous amounts of money,” he added.

Brodhead was alluding, in part, to a recent study led by Stanford University researchers that looked at how well the country’s universities do in promoting upward mobility amongst their graduates.

In North Carolina, the team found that Duke does that slightly better than either of the public UNC system’s flagship campuses, and indeed better than all but one of UNC’s historically white campuses.

About 1.6 percent of Duke students who come from families in the bottom fifth of the country’s income distribution reach the top fifth. About 1.4 percent and of N.C State’s graduates make a similar life change and about 1.2 percent of Chapel Hill’s. UNC Charlotte’s “mobility rate” tied with Duke’s.

In the UNC system, campuses remain free to spend from other sources, donor dollars in particular, on need-based aid. But UNC-Chapel Hill’s fundraising effort far outstrips that of all the system’s other campuses, N.C. State included.

Ray Gronberg: 919-419-6648, @rcgronberg