Story by Bailey Pennington, data gathered by Danila Chenchik.
A thirty-year-old admissions policy is costing UNC system schools big bucks.
In March of 1986, the UNC Board of Governors adopted policy 700.1.3, which capped out-of-state enrollment at no more than 18 percent of total enrollment. However, this cap applies only to the incoming freshman class, meaning transfer and exchange students are not included in the allotted 18 percent. Likewise, the policy stipulates that the NC School of the Arts is exempt from the cap and other exceptions can be potentially granted upon request.
If system schools exceed this cap, the Board can reduce the university’s operating budget for the following year. In the 2014-2015 academic school year, UNC Chapel Hill surpassed the cap by 0.3 percent, enrolling a total of 41 students beyond the 18 percent limit. In response, the Board penalized the university one-million dollars.
Ashley Memory with UNC’s Admissions Office said this penalty is due to the unpredictability of the university’s yield. Yield is the difference between the number of admissions offered compared to the number of admissions accepted.
“There’s how many students do you admit and how many students do you enroll?” Memory said, “And because the cap still holds true, it does limit the amount of out-of-state students we can admit and ultimately enroll. And it’s difficult to predict how many students will accept that admission. That’s why we’ve had a couple of years where we’ve gone over on out-of-state enrollment a little bit and why we’re subject to penalty by the system.”
This penalty, a reduction in the operating budget, affects all parts of campus for the upcoming year. Phil Asbury of UNC’s Financial Aid Office said the Board’s penalty often does not affect financial aid for in-state or out-of-state students but causes a reduction in money available to both types of students in other aspects of campus life.
A key question is where and when did this 82-18 admissions ratio originate?
The first mention of the 18 percent cap came from former UNC system president William Friday. In a letter to the Board’s Educational Planning, Policies and Programs committee, Friday cited a rise in out-of-state enrollment and recommended the Board “establish more specific policies concerning out-of-state enrollment at the undergraduate level.”
The Educational Planning committee, led by Reginald McCoy, then drafted the policy, which was later adopted using Friday’s suggested 18 percent cap.
Both McCoy and Friday, as well as many other 1986 Board members, have since passed away, leaving few indicators in the Board’s archives as to where this specific ratio came from.
McCoy’s original statement in presenting the policy said out-of-state students were a “welcome and important segment of our population. At the same time,” he added, “we also recognize that as a state university we have a special obligation and responsibility for the education of North Carolinians.”
Thirty years later, some North Carolina lawmakers agree with this reasoning. Representative Nelson Dollar said, “Out-of-state students provide additional diversity in the student population and cover a larger share of the cost. On the other hand, our long-standing taxpayer support depends on in-state students being able to access the University system their family’s taxes are paying for. That’s the basic answer.”
The policy reflects a desire for UNC institutions to serve state residents first and foremost, but the reasoning for choosing an 82-18 percent split is still unknown.
After repeated attempts to get in contact with the current UNC Board of Governors as well as system president Margaret Spellings, the question remains unanswered. And an even bigger question still looms: should this thirty-year-old policy still apply today?
In a recent article by Douglas Dibbert titled “Where Tar Heels are Born and Bred,” he examined the sixteen system school’s in-state to out-of-state student enrollment. Exceptions to the out-of-state enrollment cap have often been granted for NC A&T engineering students, and the policy explicitly states it does not apply to the School of the Arts. Otherwise, the other 14 universities average about 13.3 percent of out-of-state enrollment, with UNC Chapel Hill being the only one occasionally exceeding the cap.
UNC’s out-of-state enrollment is significantly lower that the majority of its public peer institutions. The next closest to the 18 percent cap is Maryland’s 28 percent out-of-state enrollment. The numbers increase from there, such as Virginia’s 34 percent out-of-state enrollment and Michigan’s 45 percent. These enrollment percentage differences lead to even greater revenue differences.
UNC Chapel Hill’s current revenue totals about $367 million but, applying Michigan’s current student distribution of 66 percent in-state and 34 percent out-of-state, would result in a gain of $111 million in revenue. The School of the Arts, which is exempt from the cap, has an almost even student distribution of 48 percent in-state to 52 percent out-of-state. Applying such an evenly spread student distribution to UNC Chapel Hill would result in an enormous gain of $238 million in tuition revenue, a total of a whopping $605 million. While these are estimations, it is evident that having a larger out-of-state percentage would result in huge gains in revenue for UNC Chapel Hill. (For more information regarding the differences in system and outside revenue, please see our interactive chart here.)
So the question remains, why are UNC system schools restricted to an 82-18 percent enrollment ratio of in-state to out-of-state students? After thirty years, the Board of Governors has yet to answer that question.
