UNC students and parents: Hang on to your wallets

UNC President Tom Ross has told campus administrators he is considering allowing campuses to charge a one-time tuition adjustment to catch up to “peer universities” (See article).

Currently UNC Institutions cap tuition increases at 6.5 percent a year. However it looks like that cap may be lifted. UNC officials are considering higher tuition rates to make up for the loss of $1 billion in state appropriations.  A tuition advisory panel at  UNC Chapel Hill is considering a proposal to increase tuition by $2,800 – a whopping increase of 40 percent over last year. All proposed increases must be approved by the General Assembly.

No doubt UNC administrators will help to sell any new policy to the legislature by saying a certain percentage of the revenue will be set aside for financial aid. And so goes the never ending higher education money merry-go-round.  While this scenario raises a boatload of institutional issues, lets focus on the student side.

Of course, student aid will help the plight of many students, however it also perpetuates a broken system. Billions in financial aid has helped to distort the price and supply of higher education and contributed to ever-rising tuition levels. The ready availability of student aid has also helped to fill college classrooms with thousands of marginal students many of whom will never graduate.

The Project on Student Debt reported that North Carolina students left school with an average debt of about $21,000.  Interestingly the study reported that almost half of all students leave school debt free – which means that borrowing levels for many students is actually higher.  Do we want to be encouraging even more debt for students many of whom are having difficulty finding jobs?

College can certainly be a life-changing career option for many people. However, when will we realize that funneling nearly all students to college is huge mistake for student and taxpayer alike. When we’re  spending $3.5 billion on higher education and nearly one in every two UNC students fails to graduate in five years, it is time to re-think not only how we finance higher education but also who might most benefit from that investment.