RALEIGH – I know that many students and officials in the University of North Carolina are wary of another round of tuition hikes. I can understand why they are concerned. But based on their comments, some have a skewed perception of the fundamental economic realities facing state government, UNC, and private households.
In a recent Raleigh News & Observer piece, for example, an Appalachian State University graduate student who has a seat on the university system board of governors said that recent tuition hikes led her to fear that the General Assembly is “moving tuition from a secondary source to a primary source of revenue.”
Not at all. Even if there is a substantial increase in UNC tuition for the 2011-12 school year, the vast majority of the cost of educating students will continue to be covered by taxpayers and donors, not tuition. (The N&O reported that the share covered by state appropriations has dropped over the past two decades, but as far as I can tell most of the difference has been made up with fundraising, not tuition.)
The new president of the system, Tom Ross, was quoted in the same piece as saying that based on “the amount of tuition increase we’ve already seen, the budget cuts we’ve already had, and these next cuts, we’re really talking about a different philosophical approach to higher education.”
I respect President Ross, but I think he is mistaken here. According to data from the North Carolina legislative staff, tuition and fees currently make up about 15 percent of the total revenues to the UNC system. If you exclude the hospital system and other ancillary businesses from the total, the share accounted for by tuition rises to just over 20 percent.
This share hasn’t changed dramatically in many years. As tuition and fees have gone up, so have UNC expenditures. Perhaps the university system should have done a better job of controlling expenses – on second thought, strike the word “perhaps.”
Some assert that North Carolina’s constitution prohibits tuition hikes. As I have previously argued, this is a misreading of the state constitution. It stipulates that “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.”
The key phrase is “as far as practicable.” No one, and certainly no North Carolina judge, has ever interpreted the provision to require free admission to UNC or community colleges. These schools have always charged tuition, while granting financial aid to a (growing) share of the student population to ensure access by low-income North Carolinians.
Raising tuition to cover, say, a quarter of the cost of education rather than a fifth of the cost is neither a fundamental change in the state’s philosophy about higher education nor an unconstitutional act, whatever you think of the merits of such a tuition hike. As long as legislative appropriations cover the vast majority of the cost of educating students, the constitutional provision is satisfied. No legislator or policymaker I know of is proposing anything that would run afoul of the provision.
Finally, it would be hard to argue that recent tuition hikes have prevented deserving North Carolina students from obtaining higher education. The biggest challenge facing state colleges and universities has been coping with surging enrollments, not trying to fill empty seats. Unfortunately, surging enrollment has not been accompanied by improvement in the graduation rate. While a few campuses have done better, the UNC system has a whole has posted four-year graduation rates of about 35 percent to 36 percent over the past half-decade, with six-year graduation rates stuck at between 58 percent and 59 percent.
Overall, our government budgets are simply too big to finance at current revenues.
With the continued weakness of North Carolina’s economy, state policymakers must recognize that there is little appetite for additional tax increases. They’re going to have to bring future expenditures in line with projected future revenues. That means finding savings in every area of the state budget, including the UNC system.
Hood is president of the John Locke Foundation.