Would enrolling more out-of-state students help finance the state’s university system, raise its national reputation, and spur the economy? Or would it be a slap in the face to state citizens who support the system with their taxes?

State leaders have been wrangling with such questions. A proposal to raise the cap on out-of-state enrollees surfaced recently at the January meeting of the UNC Board of Governors.

The UNC system currently limits the number of out-of-state freshmen that each university can enroll at 18 percent. The Board of Governors put the cap in place in 1986 and in 1994 started enforcing it with budget penalties for universities that went over the cap. For example, UNC-Chapel Hill was supposed to pay $335,000 in fiscal 2011 after it went over the limit by 24 students. That penalty later was cut because it was deemed too harsh in light of budget cuts.

For some schools, the cap is irrelevant. At UNC-Pembroke, for example, only 3 percent of students who enrolled in 2012 were from out of state. Only 12 percent of UNC-Asheville’s freshmen were from out of state in the latest year reported by the College Board.

But UNC-Chapel Hill has chafed under the limitation for years. A number of its peer institutions, not burdened by such a cap, enroll a much larger proportion of out-of-state students. For example, 29 percent of University of California at Berkeley freshmen, 33 percent of University of Virginia freshmen, and a whopping 43 percent of University of Michigan freshmen are from out of state.

Those schools have an advantage in both revenues and in student selectivity. Tuition at UNC-Chapel Hill for out-of-state students is $28,250, nearly four times the $7,500 charged to in-state students. In addition to receiving more tuition, the universities draw from a larger pool of applicants.

But this time N.C. A&T State University is at the center of the debate. At the January meeting, Chancellor Harold Martin said that his university finds it especially difficult to find qualified students. As a historically black school that specializes in challenging fields like engineering, he’s looking for talented students in a talent pool that is already eagerly picked over.

N.C. A&T went over the cap by a considerable amount this past fall, admitting 31.4 percent out-of-state students in its freshman class — going over the 18 percent limit by more than 50 percent. School officials insist it was just a fluke, the result of a changed enrollment process.

Still, administrators at N.C. A&T would like to see the cap raised. N.C. A&T has struggled to find enough qualified students from North Carolina. In 2002, each school in the UNC system set a 10-year goal for enrollment growth; after 10 years, N.C. A&T is about 5,000 students short of its goal, by far the furthest behind its goal of any UNC school.

Wanda Lester, associate vice chancellor for academic affairs at N.C. A&T, told the Pope Center she supports raising the cap because it will improve both the quality of academics at UNC schools and the long-term economic outlook for the state. “I’m not saying there should be no limits,” she said, but a higher cap would be beneficial nonetheless.

Proponents of increasing out-of-state enrollment say it would benefit the state economy because more bright students would stick around after graduation, although it’s a difficult claim to verify. Proponents also say that it would not mean fewer spots for in-state students; the proposal would expand enrollment overall, keeping the number of in-state students the same and just increasing the number of out-of-state students allowed in.

Unfortunately for N.C. A&T, proposals to increase out-of-state enrollment have been floated before and they never got very far.

For one thing, state taxpayers don’t like the idea of subsidizing outsiders. Even though out-of-state tuition is much higher than in-state tuition, it still doesn’t cover the cost of a UNC education. In 2009, UNC-CH spent $58,379 per student, according to federal data.

Another objection is that allowing more students from outside the state would make it more difficult for North Carolina students to get into a “flagship” UNC campus such as Chapel Hill. This is perhaps the strongest argument among parents with college-age children.

“When you have children, you would certainly hope that you could get the best value for their education,” Irvin Roseman, a Board of Governors member from Wilmington, said in an interview, “All in all, a change in the undergraduate cap is unlikely right now. But if pressure continues to build, the issue will surface again.

Duke Cheston is a writer for the John W. Pope Center for Higher Education Policy.