The University of North Carolina Board of Regents has raised the out-of-state freshman recruiting limit at five universities from 18% to 25%.
East Carolina University, University of North Carolina at Asheville, University of North Carolina at Greensboro, University of North Carolina at Pembroke and Western Carolina University have been approved to accept more students from outside North Carolina.
Initially, the enrollment cap was set at 18%. 1986 year board policy as a way to promote enrollment. If universities exceed the limit for two consecutive years, they must pay a penalty based on the total number of excess out-of-state freshmen.
The board has loosened some restrictions on out-of-state students in recent months, suggesting it is focused on reducing university enrollment and the associated funding shortfall.
For the first time in nine years, the UNC system is seeing a decline in its total enrollment, according to 2022 UNC Fall Enrollment Report.
In the fall of 2022, the decline in enrollment from North Carolina was offset by an increase in new out-of-state freshmen, according to the report. The UNC system also saw an increase in out-of-state freshman enrollment in the fall of 2022.
In April, the board of regents raised the limits at North Carolina Agricultural and Technical State University and North Carolina Central University to 35%, while Elizabeth City State University’s limit was raised to 50%.
The board previously raised the cap to 25% at all five HBCUs in the system, including Fayetteville State University, Winston-Salem State University and the three aforementioned universities.
There is no freedom of action to overcome limitations
Despite the emphasis on inciting losses, universities are not given leeway when it comes to paying fines if they violate restrictions on out-of-state students.
In November of this year, the board approved a $1.97 million fine for NC A&T in Greensboro. During the 2022-23 fiscal year, the historically black research university exceeded the 35% cap by 171 students.
It was the largest fine in 20 years, according to The UNC System.
During the November meeting where NC A&T was fined, BOG board member Joel Ford voted against the penalty.
“Basically, we have campuses, and over time, environments that are struggling to recruit, and here we have one of our HMSIs (a historically minority-serving institution) experiencing historic seasonal growth,” he said.
“I cannot support a policy that takes $2 million from the university when in reality they can use every penny they can get to further that mission,” Ford said.
Out-of-state students can often pay double or even five times as much as in-state students, making them an attractive financial prospect for universities.
In the 2021-2022 fiscal year, NC A&T generated more than $43 million in revenue, with 52% of its funds coming from state appropriations, more than 28% from nonresident tuition and less than 17% from resident tuition, according to data transmitted by the UNC system.
Between the 2017-2018 and 2021-22 fiscal years, NC A&T’s out-of-state funds grew by 47% and in-state funds by 5%. Allocations increased by 24%. By comparison, the UNC system saw a 17% increase in appropriations, a 3% increase in in-state tuition funds, and a 3% increase in out-of-state tuition funds. 8%.
State fiscal years run from July 1 of one calendar year to June of the following year, meaning fiscal year 2023 runs through June.
After Ford’s comments, Jim Holmes, who is chairman of the Budget and Finance Committee, said the topic “requires conversation and thoughtful thinking as opposed to just making a change at the board level.”
He added that he discussed the fine with A&T Chancellor Harold Martin and that he “didn’t know he liked the fine.” But he certainly took the punishment,” Holmes said.
The Council is finalizing the details of the transition to a performance-weighted funding model, which will significantly affect the way universities are funded.
Under this model, approved in April, public funds will be distributed based on university performance, student outcomes and system goals, not total student numbers. The goals include “elements of improving undergraduate success, affordability and overall productivity,” according to Kastrychnik and November board meeting materials.
“Recognizing that each institution will start from a different baseline to achieve these goals and will face its own unique challenges and have different resources, the performance goals for the new funding model will be data-driven,” it said. board meeting materials.
This was stated by a member of the Board of Governors, Lee Roberts October the board meeting said that based on 2022 enrollment under the old funding system, universities would lose a total of $62 million in state funding, but would lose $36 million under the new model.
The $26 million in savings shows that the performance-based model is “doing what it was designed to do, which is minimize the unpleasantness created by the old enrollment-based model,” Roberts said. He added that 13 schools are performing better under the new performance model, but two schools are slightly worse. He did not specify which universities could be adversely affected.
The N&O requested documents, including any analysis and reports detailing how different universities would be affected by funding under the performance-based model.
The UNC System responded that “an appropriate public record does not yet exist” and that the report will likely be discussed and released at the February Board of Regents meeting.
Other fines paid by campuses that exceed the out-of-state limit include:
- FY 2004-05: UNC Asheville was fined $97,570 for exceeding the 18% limit by 13 students. In the fall of 2004, UNCA enrolled 140 freshmen abroad and 567 freshmen in-state.
FY 2009-10: ECU was assessed a penalty of $260,220 for 26 students over the limit. In the fall of 2009, ECU enrolled 738 freshmen abroad and 3,218 freshmen in-state.
Fiscal Year 2010-11: UNC Chapel Hill was fined $158,225 for 13 students over the limit. In the fall of 2010, UNC Chapel Hill enrolled 726 out-of-state freshmen and 3,234 in-state freshmen.
For the 2015-16 fiscal year: UNC Chapel Hill was fined $1,041,017 for exceeding the limit by 76 students. In fall 2015, UNC Chapel Hill had 796 out-of-state freshmen and 3,280 in-state freshmen.
The UNC system is loosening the cap on out-of-state students at five campuses
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