Future undergraduates at UNC-Chapel Hill's Kenan-Flagler Business School could face a substantially higher price tag for their education after a new fee won preliminary approval Thursday.
The UNC system Board of Governors' budget and finance committee voted for an extra $2,000 annual fee for UNC's undergraduate business majors, and $1,000 for minors, starting in the fall. UNC officials say the fee is needed to expand undergraduate enrollment by 50 percent to meet rising demand.
Still, some board members expressed reservations before the vote, saying it would open a "Pandora's box" of requests by campuses for new fees for individual programs. Generally in the UNC system, tuition rates for undergraduates at each campus apply to all majors, though there are exceptions. N.C. State University engineering students, for example, pay an extra fee for that program.
The new fee was part of the slate of tuition and fees approved by the committee for the 2018-19 academic year. The full board will vote Friday on the proposals at its meeting at UNC Wilmington.
For North Carolina residents, tuition would be flat at all schools, except for Elizabeth City State University, UNC Pembroke and Western Carolina University – the three campuses that are part of the new NC Promise reduced tuition program. At those schools, tuition will be $1,000 for in-state students and $5,000 for out-of-state students.
At the other campuses, out-of-state students would either see flat tuition or increases, such as 1.8 percent, or $600, at UNC to 4 percent, or $995, at N.C. State.
If the rates are approved by the board, annual tuition and fees for North Carolina students would be:
▪ $6,348 at N.C. Central University;
▪ $8,896 at N.C. State University;
▪ $8,758 at UNC-Chapel Hill.
Out-of-state tuition and fees would be:
▪ $19,055 at N.C. Central University;
▪ $28,239 at N.C. State University;
▪ $34,941 at UNC-Chapel Hill.
The total price would be higher, though, because of room, board and book costs. The total cost of attendance for North Carolina residents would be $19,934 at NCCU, $22,762 at NCSU and $23,826 at UNC-Chapel Hill, not accounting for any financial aid a student might qualify for.
The UNC system governing board had told campuses to hold the line on in-state tuition. In 2016, the legislature acted to cap fee increases at 3 percent and freeze tuition for each entering first-year students who remain continuously enrolled for four years.
UNC and Winston-Salem State proposed fee reductions for next year, but most campuses asked for fee increases.
Several board members expressed concerns about the proliferation of fees that add to students' cost of education.
"The board needs to take some more active role in defining what a legitimate fee is used for and what tuition is used for," said Steve Long, an attorney from Raleigh, adding, "A fee is something for an isolated activity, like health services. It's not to be used so aggressively for every little thing that comes along, because as we have seen, once you put in a fee, it never goes down. So I hope we will reform that whole system."
UNC Chancellor Carol Folt said that a system of tuition plus fees is the norm in higher education. Fees cover specific things like technology, health, parking and athletics. "This is how it's done everywhere," she said.
Board member Joe Knott, a Raleigh lawyer, said the board should keep in mind maintaining quality. "We can cheapen ourselves into providing our students with a second-rate education, which is not what we want to do."
The board's vice chairman, Harry Smith, said he had angst about a new fee for the business school. He called it "a slippery slope of opening ourselves up to 10,000 fees and 10,000 requests, which is what I don't want to do."
Nearly half of the students who apply now to UNC’s highly ranked business school in their sophomore year are turned away. As a result the competition is intense. Growing enrollment would help meet the demand, and UNC officials maintained that the new fee is needed to cover half the cost of school's expansion. Fundraising would cover the other half.
The school has said it would cover the cost for students who are eligible for financial aid. Students who graduate from Kenan-Flagler have an average starting salary of $60,000, according to 2014 data.
Another member, Raleigh lobbyist David Powers, suggested the board look at a system of tuition that would be set according to the major and market conditions. That would constitute a big change for the way students are charged.
Powers said he agreed with Kenan-Flagler's approach to charge more for a high-demand degree. "This is a great economics lesson, in addition to being a way to grow their very strong program," he said.
The board’s student representative, Tyler Hardin of Appalachian State University, urged the board to vote against the increase.
"I just want to reiterate the burden that this is on students that do have to pay for this, whether out of pocket or with loans," he said. "$2,000, $1,000 — to me, that's a lot to students."
The fee passed unanimously. Hardin, as the student representative, does not have a vote on the board.