BOG Decides Against Cap on Tuition Set-Aside for Aid

Posted on Sept. 27, 2012

The UNC System Board of Governors has freed its schools to make their own decisions about how much of the revenue from tuition increases they will apply to need-based financial aid — calming fears at Carolina and elsewhere that they would have to work under restrictions that could have thinned the ranks of those receiving aid.

In mid-September, the BOG voted to remove a provision that required the 16 universities in the system to set aside at least 25 percent of tuition increase revenues to offset the impact of the increase in need-based aid recipients.

More importantly for the Chapel Hill campus, which currently sets aside about 38 percent, there will be no cap.

In the past year, political winds seem to have been blowing in the direction of a cap because of perceived taxpayer concerns that full-paying families were helping carry the load for aid recipients. BOG members have said that parents of students in the system have been surprised to learn they were, in effect, subsidizing other students.

UNC officials worried about their continued ability to “hold harmless” students who depend on financial aid to afford college. The “hold harmless” standard means no qualified student is refused admission because of inability to pay; as needed, costs are covered by grants and/or loans. In 2010-11, Carolina provided $351 million in aid — $189.4 million in outright grants and $161.6 million in loans. The grants portion broke down this way: $149.1 million from “institutional funds,” including tuition set-asides, and private gifts; $20.4 million from a legislative appropriation; and $19.9 million from the federal government.

Shirley Ort, Carolina’s associate provost and director of scholarships and student aid, said the University’s ability to determine its own tuition set-aside has been the “linchpin” of its reputation for accessibility. She told the trustees Thursday that the BOG’s decision “saved us from what would have been a really big setback.”

The BOG also decided to require a notice be included with all tuition bills that specifies how the campus will use new tuition revenues, including need-based aid.

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