UNC Should Announce Plan for Next Years Budget Cutbacks

The UNC Board of Governors approved a “freeze and cap” budget policy August 1 that limits yearly tuition increases and financial aid spending. The new policy will take effect during the 2015-2016 fiscal year and will apply to all schools in the UNC system.

UNC-Chapel Hill must plan for these restrictions. Without a comprehensive strategy to manage cutbacks, many students will be forced to take out loans, adding to their student debt.

UNC has touted being a nationally ranked school that meets full financial need. The university has worked for the past decade to ensure students with federally documented need fund their college through gifts, grants and scholarships, instead of through costly loans. A huge portion of UNC’s tuition budget, 20.9 percent, is appropriated for financial aid, a share the Board of Governors wants to reduce.

Yearly budget increases, now capped at 5 percent, are intended to gradually reduce financial aid spending to 15 percent of the budget. The future 6 percent decrease in aid money will affect 38 percent of students who rely on need-based financial assistance. And to make up this difference, more students will graduate with loans that must be repaid with interest, effectively ending the current “100 percent of need” policy.

Furthermore, students will still be burdened by rising education costs. Although tuition will remain steady, other costs—e.g., room, board and books—will continue to increase. The new policy wrongly assumes that capped tuition increases will also eliminate the need to increase financial aid spending. 

The university needs to ensure that education remains affordable, even while the Board of Governors enacts such a shortsighted policy. Doing this will require uncomfortable cutbacks.

Any cutbacks, however, should be crafted to keep education affordable. For example, UNC could devise an “a la carte” tuition, which would allow students to reduce costs by purchasing only the services they want. In this system, students could choose to pay for expensive extras like gym memberships, club activities and even academic services like the writing center. And before the university narrows who gets aid, it should eliminate any wastefulness in financial aid spending.

The restrictive “freeze and cap” policy from the Board of Governors is unfortunate, but it passed on August 1. Now the university needs to quickly prepare and announce its plan for implementing cutbacks, ensuring that it continues to provide a publicly accessible education.