University Gazette, November 10, 1999

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Trustees trim tuition proposal

The University Board of Trustees approved a proposal Oct. 28 that scaled back three of four tuition increases recommended as part of a package of revenue sources to close the faculty compensation gap between Carolina and its peer universities.

The board-approved plan leaves unchanged the other two recommendations on revenue sources -- more state funds and private dollars -- called for by the University Committee on Faculty Salaries and Benefits.

The plan now will go to UNC General Administration as Carolina's proposal to be included in a UNC systemwide review requested by the N.C. General Assembly. Any increase in tuition would have to be approved by the UNC Board of Governors and could be amended by the General Assembly.

According to Joni Worthington, General Administration's associate vice president for communications, the Board of Governors is not expected to take formal action on any tuition proposals until February 2000.

Carolina's proposal calls for tuition increases of $1,500 over the next five years for all students -- in-state undergraduate, out-of-state undergraduate, in-state graduate and out-of-state graduates. Professional schools would not be affected.

The Committee on Faculty Salaries and Benefits had recommended tuition increases of $1,500 over the next three years for in-state undergraduates and $2,000 over the next four years for all other students.

Trustees agreed that the compensation gap needs closing but expressed concerns that the committee's tuition recommendations asked for too much of an increase over too short a time.

"Fifteen hundred dollars over three years -- that's tough," said Trustee Richard "Stick" Williams, who made the motion calling for the scaled-back proposal.

Trustees agreed that the compensation gap needs closing but expressed concerns that the committee's tuition recommendations asked for too much of an increase over too short a time.

"Fifteen hundred dollars over three years -- that's tough," said Trustee Richard "Stick" Williams, who made the motion calling for the scaled-back proposal.

Financial aid included

The board approved the proposal with the understanding that students who qualify for financial aid would not be hurt by the increase. The vote was 9-3, with Student Body President Nick Heinke, Cressie Thigpen and Richard Stevens dissenting. Several hundred students showed up at the meeting to protest a tuition increase, an issue debated in an Oct. 26 campus forum.

The board unanimously accepted the Committee on Faculty Salaries and Benefits' report, which included principles dictating that undergraduate and graduate tuition for in-state students would remain in the bottom 25 percent compared to Carolina's public peers; that undergraduate and graduate tuition for out-of-state students would be in the median range compared to Carolina's public peers; and that the University would aggressively educate prospective students and their families about financial aid opportunities.

Shirley Ort, associate provost and director of scholarships and student aid, said research indicates that tuition increases don't deter low-income students from going to college provided that grants increase to offset the hike.

Exceptions to that may be Hispanic and African-American students, and Carolina will need to make sure these students are aware of financial aid availability, Ort said.

According to Ort, the last tuition increase at Carolina -- a 1996 increase of $400 -- did not hurt access to Carolina for low-income students. The trustees called for up to 45 percent of the revenue generated to be set aside for student grant money, and the state legislature changed that amount to at least 35 percent.

Ort said that only 30-33 percent has been needed and that the tuition increase actually has expanded access because her office has used the leftover funds to provide financial aid. After all eligible students get $400 grants to offset the tuition increase, $300,000 is left each year to bolster grant funding, Ort said.

"As director of financial aid, it's my job to make sure that the interests of financial aid-eligible students are covered," Ort said after the meeting. "I'm pleased that this proposal builds on prior experience and once again covers tuition increases dollar-for-dollar.

"I know of no other institution or state that has acted as responsibly in the face of proposed tuition increases."

Trustee Williams said he was confident that the University would maintain access for all academically qualified students.

"I'm very pleased with the partnership between admissions and financial aid," he said.

Increases for graduate student teaching assistants and research assistants will be covered by tuition remissions, according to Linda Dykstra, interim vice provost for graduate studies and research and Graduate School dean.

State and private dollars in package

The proposal also calls for the state to commit to a target of 5.5 percent as an annual increase over four of the next five years to go to faculty compensation. The increase would be 3 percent in the first year (2000-01).

The 5.5 percent target represents the average increase in state support from 1997 to 1999 for faculty salaries at three of Carolina's traditional peers -- the University of California at Berkeley, the University of Michigan at Ann Arbor (projected) and the University of Virginia. The state raised Carolina faculty members' salaries by 4 percent in 1997 and by 3 percent in 1998 and 1999. The national average is 4.8 percent.

In light of the state's need for dollars to put toward Hurricane Floyd recovery efforts and past record of support for faculty salary increases, some board members doubted whether the 5.5 percent target would become reality.

"That (the state not contributing 5.5 percent) is what frightens me, but I'm not sure there's anything we can do about it," said Trustee Tim Burnett, who also served on the Committee on Faculty Salaries and Benefits.

With the proposal, Burnett said, the University is saying to the legislature: "We're doing our part -- now do yours."

The third piece of the proposal -- private dollars to fund professorships -- calls for University Advancement to raise $80 million to generate endowment income of $1 million each year beginning in fiscal year 2001-02 and running through 2004-05.

Holding back 30 percent of tuition revenue for financial aid, the three-part package would generate an additional $15.48 million to go to faculty salaries by 2004-05. According to data from the provost's office, the amount needed to close the compensation gap with three of Carolina's traditional peers would be: $16.86 million (Berkeley), $9.82 million (Michigan) and $7.25 million (Virginia).

Compromise struck

Carolina officials see closing the faculty compensation gap as critical to recruiting and retaining top faculty members, a sentiment echoed by board members.

"A great university can withstand a lot of problems but it can't withstand a bad faculty or a mediocre faculty," Trustee Charles Sanders said.

After the vote, Faculty Chair Richard "Pete" Andrews called the scaled-back proposal a "truly fair attempt" to strike a compromise between current students and the long-term needs of the University.

"Faculty are concerned about students, they're concerned about fairness, but they're also concerned deeply about the quality of this institution -- that has to come first," he said.

Interim Chancellor William O. McCoy said he endorsed the proposal because it addressed a documented need and called for a three-pronged approach to closing the compensation gap.

And McCoy said the proposal meets the state constitution's call for as-low-as-practicable tuition for North Carolina's public colleges because it passed with the understanding that, compared to Carolina's peers, in-state tuition would remain in the bottom 25 percent and out-of-state tuition would be in the median range.

"I believe that what we're doing preserves the intentions of [the state constitution]," he said.

As dictated by the systemwide study, Carolina identified 15 schools as peer institutions, including five privates and its four traditional public counterparts: Berkeley, Michigan, Virginia and the University of California at Los Angeles.

In 1998-99, Carolina's average faculty compensation lagged behind all four of those publics as well as the five privates: Duke University, Emory University, Johns Hopkins University, University of Chicago and Vanderbilt University.

The compensation proposal comes with the backdrop of an expected boom in retiring faculty. Using 66 as an average retirement age, 18 percent of Carolina's current tenure/tenure track faculty will retire within five years and 33 percent within the next 10.

According to Carolina officials, the University traditionally has filled most openings created through retirement by promoting from within, but that could grow difficult if other schools -- particularly privates -- offer better benefits to lure away younger Carolina faculty members. The board approved the proposal with the understanding that students who qualify for financial aid would not be hurt by the increase. The vote was 9-3, with Student Body President Nick Heinke, Cressie Thigpen and Richard Stevens dissenting. Several hundred students showed up at the meeting to protest a tuition increase, an issue debated in an Oct. 26 campus forum.