UNC cap on financial aid serves best interests

by John C. Fennesbresque, chair, UNC Board of Governors, published in News and Observer, August 8, 2014.

Regarding your Aug. 4 editorial “ UNC board should lift cap on financial aid”: In adopting a policy that limits the percentage of base tuition revenues that UNC campuses may set aside for need-based financial aid, the UNC Board of Governors sought to strike a balance between slowing tuition increases and giving campuses sufficient flexibility to meet students’ financial need. The working group that recommended this step included three chancellors (N.C. State, UNCC, WCU) and spent several months examining this complex issue. Because of that complexity, there has been some confusion about what the board did and did not do.

Financial aid dollars come from multiple sources. Only a subset of need-based aid funds are covered by the new 15 percent cap, and absolutely no aid dollars will be lost. The 10 UNC campuses currently setting aside less than 15 percent of base tuition revenues for need-based aid may continue to increase those funds up to that limit. The six campuses at or above 15 percent won’t lose any tuition revenues now used for financial aid; however, their tuition set-aside for this purpose is frozen at FY 2014-15 budgeted levels so long as they exceed the 15 percent cap.

Since 2009-10, average tuition rates for resident undergraduates on UNC campuses have risen by 59 percent. Over that same period, the amount of base tuition revenues allocated for need-based financial aid has increased by 132 percent, from $90 million to $209 million. These steep upward trajectories are not sustainable.

As a board, we are committed to serving the best interests of the university and our students, including preserving access and affordability. The working group is exploring further the availability and sustainability of other funding sources for need-based aid, including state appropriations, lottery funds, escheat funds and increased private fundraising. We also will receive annual reports from the campuses on the use of tuition revenues for aid and the impact of the new cap.

JOHN C. FENNEBRESQUE

CHAIRMAN, UNC BOARD OF GOVERNORS, CHARLOTTE

 http://www.newsobserver.com/2014/08/07/4057418/john-c-fennebresque-unc-cap-on.html?sp=/99/108/