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5 Percent Cuts Expected; New Tuition Hike Likely

As a $19 billion state budget was signed this week, Carolina was:

  • Looking at a cut of about 5 percent, as it had expected;
  • Weighing a tuition increase of $750 in addition to an increase already approved for this fall; and
  • Breathing easier over its allowance to consider out-of-state academic scholarship recipients as N.C. residents for tuition rate purposes.

The final numbers are not expected for about a week as the UNC System calculates the budget cut impact on individual campuses.

But Chancellor Holden Thorp ’86 said he believed the 5 percent reduction would hold. It would be the second straight year of no state-supported salary increases for faculty and staff, and Thorp said he was feeling compassion for employees weathering both that and increases in state health plan costs.

In a message to the campus community on Wednesday, Thorp wrote: “Starting last December, we began planning for additional cuts in state funding. I asked our vice chancellors and deans to develop proposals that assumed new cuts at the 5 percent level as well as continued declines in funding from endowment earnings. I believe that work, and the difficult decisions associated with it, have put the University in a good position. Cuts to the UNC System for the 2010-2011 fiscal year will include a $70 million reduction in the operating budget, and although we don’t know exactly what that will mean for our campus, we don’t think the cuts will dramatically exceed the 5 percent level we anticipated.”

The N.C. General Assembly gave its blessing to UNC System President Erskine Bowles ’67 to authorize another tuition increase to try to hold off more drastic budget cutting, including layoffs, at some of the campuses. Bowles was expected to authorize the increase, and Thorp said he was touching base with key people on the Chapel Hill campus before deciding whether to order the hike here.

Thorp told The News & Observer of Raleigh, “We’re hesitant to do it. But given where Carolina stands, with our tuition as low as it is compared to our peers, and the struggle we’re in to preserve what we have, it may be the best of the options available to us.”

Carolina’s current challenges include keeping enough class sections open for students’ needs, staving off faculty raids and continuing to bring in top junior faculty, Thorp said.

The $750 annual tuition increase would be on top of increases already approved by the UNC System Board of Governors for this fall. The BOG voted in February to increase tuition 5.2 percent for all undergraduates and 3.7 percent for graduate students. In dollars, the increases mean undergraduate and graduate resident tuition will increase $200 a year; fees for all undergraduates will go up $96 a year, or 5.5 percent. Without an additional hike, the annual tuition and fees would have been $5,921 for in-state undergraduates, $24,736 for out-of-state undergraduates, $7,457 for in-state graduate students and $22,387 for out-of-state graduate students.

UNC’s tuition has increased in four of the past six years.

Thorp would not need the approval of the trustees for the additional $750.

Also under the new budget, out-of-state athletes no longer will benefit from a 5-year-old exemption from the higher nonresident tuition rates; for those whose college costs are paid with athletic scholarships, more money will have to come from booster clubs and other private sources.

The exemption was preserved for those on academic scholarships, allowing the Morehead-Cain and Robertson Scholarship programs to continue to compete nationally for top scholars. Nine of the past 10 Rhodes Scholarship winners from UNC were Morehead-Cain scholars from outside North Carolina.

To illustrate the impact of the exemption, the 64 new scholars Morehead-Cain expects to enroll this fall would have to have been dropped to 46 if the exemption had been removed.

The state budget also eliminated a House-backed initiative to put an enrollment limit on UNC System schools.

The General Assembly also committed to fund need-based financial aid for the state’s students and restored funding that had been in doubt for the operation of many new buildings on the campuses.


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