- $500 tuition is passed to make college more affordable on 3 UNC Campuses.
- Proposal reduces the price of education but not the cost.
- $500 tuition transfers additional cost of higher education from the users to taxpayers.
Five-hundred-dollar tuition – that has a nice ring to it doesn’t it? That’s what parents and students across North Carolina may be saying soon as this year’s state budget included provisions setting undergraduate tuition for one semester at $500 for Western Carolina University, Elizabeth City State University and UNC-Pembroke.
The plan, authored by former Sen. Tom Apodaca (R-Buncombe), is intended to provide students and parents relief from the spiraling costs of higher education. But what are the other effects?
In 2000, the average annual UNC undergraduate tuition and fees was $1,951. Fifteen years later, that figure had ballooned to $6,294. How did students finance those increases? Many borrowed. In 2004, the average UNC undergraduate had about $16,000 in debt when he or she graduated. By 2014, the debt load had increased to $25,000. Those figures are daunting – and even more so if you don’t have a job.
In addition to setting in-state undergraduate tuition, the legislation sets out-of-state undergraduate tuition at $2,500 per semester and freezes the tuition of continuously enrolled freshman or transfer students during the time they are enrolled. The legislation also limits the rate of increase in fees to 3 percent a year. Fees — increasingly a signficant expenditure for most students — — are used to finance student activities and athletics, health services, technology and a variety of other campus functions. The change will likely prove popular since annual fee increases have been a common complaint of students and the limitation to 3 percent will prevent campuses from hiding cost increases by rolling them into fees.
I would guess that many parents and students are breathing a sigh of relief and giving Apodaca and fellow legislators a big thank you. Finally an alternative to spiraling college costs!
But if I’m a taxpayer, or someone examining how these changes potentially impact higher education in North Carolina, there are more than a few reasons why $500 tuition doesn’t sound like such a great idea.
First, it is important to note while the legislation may limit tuition to $500, the bill doesn’t address other significant costs of higher education. The actual cost of higher education at Elizabeth City State University, Western Carolina University or UNC-Pembroke is not reduced to $500 per semester for students. Specifically, such items as fees or room and board are unaffected by the legislation. Students will still need to finance a large part of their education. That truth should not be forgotten.
Second, the price of tuition may be reduced, but the cost of providing an education does not decrease. As noted in an article on the subject in the Chronicle of Higher Education, Dr. David Belcher, the president of Western Carolina University, noted “while the costs of tuition will drop by about 75 percent, the cost of attendance will remain around $14,000.” 
When the concept of low tuition was first floated, college officials were skeptical. Where would the money come from to replace tuition revenue? Without additional funds, low tuition is nothing but a big financial hit. Later versions of the bill answered that question by authorizing the UNC System to increase their base budget annually up to $40 million to offset the costs of lost tuition revenue at the three institutions. The UNC System would be responsible for ensuring the money is distributed to the right institutions.
This provision demonstrates the fact that the bill doesn’t magically reduce the cost of a college education, but merely transfers more of the cost of education from the students and families to taxpayers.
A third problem with the $500 tuition plan concerns perception. The original version of Apodaca’s legislation included four historically black colleges and universities (HBCUs). The goal was to not only reduce college cost but also to reverse falling enrollments, stabilize finances and allow North Carolina HBCUs to regain their niche in a changing higher education landscape.
HBCU officials wondered whether the low tuition would put a stigma on HBCUs and lessen the perceived value of the institutions in the public’s eyes. The sentiment spurred a number of HBCUs to back out of the original proposals. But the bill passed and the final version set $500 semester tuition at the three institutions, which include one HBCU, Elizabeth City State University.
Low tuition will inevitably reshape enrollments of the three universities. It may lead to an influx of newer students attracted more by price than the unique characteristics of the institutions. Potential students for Elizabeth City State University may actually come from across the state border, drawn by the price. Interestingly, I believe lower tuition may also actually work to push out some of the low-income and first-generation students that institutions like ECSU and UNC-Pembroke have traditionally served.
WCU might be a different story. WCU’s enrollment is higher than the other two schools. Lower tuition might very well develop a larger applicant pool and force the school to be more selective in its admission process. You wonder if this might actually serve to reduce access among the populations the legislation is hoping to serve.
Yes, there are provisions in the budget legislation that direct the UNC system to “give due consideration to maintaining the unique historical character of each institution.” However, I’m far from convinced that legislative language solves the problem. It’s much easier to write provisions than it is to enforce them.
Unintended enrollment changes are not the worst thing about $500 tuition. The worst thing about the legislation is that it ignores the deeper questions that emerge from the problem the legislation seeks to address. For example, Apodaca and others said one of the goals of the legislation was to help HBCUs and keep them as a viable educational alternative for young people.
The reality is HBCU enrollment has declined significantly in recent years. Why? Is it because of rising tuition? A shrinking market? Have HBCUs outlived their usefulness? The fact is, however, that we don’t know. Lowering tuition doesn’t provide an answer to any of those questions.
Getting a handle on spiraling college costs is a problem that needs to be tackled. Implicit in the perceived solution is an unquestioned assumption: a college degree is the best way to educate people or make them ready for the workforce. Considering job availability, qualifications and desired backgrounds, as well as the cost of a college degree, four years on a campus may not be the best education option for everyone. Surely the most recent cohort of graduates saddled with record school loans and a stagnant economy might have something to say about that.
Low tuition will likely increase enrollment in the designated institutions. However, low tuition doesn’t answer the question as to whether college is the best education option for individual students. Furthermore, while low tuition may sound appealing to parents and students, expanding enrollments in institutions that have very low graduation rates (34.2% at UNC-Pembroke; 47.9% at WCU; and 42.7% at Elizabeth City State University) raises other questions. Are we merely expanding the numbers of people who will drop out or fail? Would it be better to expand access at institutions that have higher graduation rates? What can or will be done to improve graduation rates?
Legislation calling for $500 tuition can increase access to higher education and help to save HBCUs. However it will do nothing to rectify an overbuilt higher education system. Which raises another question: Why should state government be in the business of choosing winners and losers among colleges?
 UNC Statistical Abstract for various years. Available online at: http://www.northcarolina.edu/apps/stat_abstract/index.php
 N.C. Students Drowning in Student Debt by Lauren Hong, Triangle Business Journal, August 4, 2016 Avalable at: http://www.bizjournals.com/triangle/news/2016/08/05/north-carolina-s-college-students-drowning-in-debt.html (Subscription may be required).
 What $500 Tuition Could Mean for 3 UNC Campuses, Sarah Brown, Chronicle of Higher Education, August 9, 2016. Available online at: http://chronicle.com/article/What-500-Tuition-Could-Mean/237404 (subscription may be required).
 House Bill 1030 (State Budget Bill), page 55. Available online at: http://www.ncleg.net/Sessions/2015/Budget/2016/H1030vCCR.pdf
 Graduation Rates obtained from CollegeMeasures.org, Four year college data tool. Data for specific institutions available at: http://www.collegemeasures.org/4-year_colleges/home/