New Limits on Financial Aid Tied to Tuition in North Carolina

The Far-Right in North Carolina has received much national attention for passing blatantly anti-progressive legislation–most notably, more restrictive voting laws and dramatic reductions in funding for social safety-net programs. But, beyond the legislation that has generated the greatest controversy across the state and beyond, the Far Right legislature and governor—and the governor’s many appointees—have been pursuing all available opportunities to advance their extremist ideology. And higher education has been impacted in many ways by those efforts.

Most recently, the Far-Right majority on the UNC Board of governors, which oversees the public universities in North Carolina, has placed new limits on the percentage of the revenue generated by tuition that can be allocated financial aid. Institutions will now be able to deveote no more than 15% of their tuition revenue to financial aid.

Of the 17 public universities in North Carolina, six now allocate between 15% and 20% of their tuition revenues to financial aid. As the following charts of enrollments by institution within the UNC system and allocations of tuition to financial aid make clear, the two largest universities within the system, North Carolina State University and the University of North Carolina at Chapel Hill, are also the two institutions most exceeding the new cap, and the total current allocations exceeding the new cap amount to more than 10% of the total financial aid currently being awarded.

UNC Enrollment by Institution, 2012

UNC Four-Year Tuition and Fee Plan--Chart, Pg11


The board has justified this new mandate as a necessary step toward limiting tuition increases and thereby slowing the increases in student debt. But the logic in such thinking seems very superficial. In effect, this mandate seems primarily intended to allow the state to limit its fiscal support of its public universities and to pass even more of the cost on to certain groups of students. Most of the institutionally provided financial aid now supports need-based scholarships for students from economically disadvantaged and lower-middle-class backgrounds. Presumably, then, more of the students in those groups either will have to rely even more on student loans to cover the cost of attending the universities or they will not be able to enroll at all. At some point, the increased burdens placed on the students whose financial aid has been eliminated or reduced will reduce the numbers of them enrolling in the state’s universities, therby reducing the demand for the available financial aid by attrition. So, although the revenues not allocated to financial aid might ostensibly be allocated to cover other costs, it is more likely that this mandate will utimately reduce enrollment and cut into the other sources of revenue that enrollment produces. This mandate will do very little to reduce the costs being borne by most students because, at its core, it is simply another manifestation of the revenue squeeze on our institutions: that is, it simply adds a new dimension to these complexly interconnected problems, rather than providing any sort of solution to them.

This is the same sort of skewed logic that has been used by advocates of austerity during severe economic downturns, when most available evidence supports that austerity is counterproductive, making the crises even worse than they would otherwise be by reducing public employment and the economic activity that it supports. One wonders, for instance, how much more quickly the u.S. might have recovered from the Great Recession if both the federal government and the Far-Right-dominated state governments had not cut public employment—never mind passing “jobs bills” to increase it.

It is worth noting that the UNC Board has approved a 5% increase in tuition for this next academic year, but legislators have already warned the institutions that any allowable tuition increases in future years will be much more modest. That said, I have no idea of how substantive the impact of the current tuition increase will be. Given the Far Right’s track record on educational funding in North Carolina, I suspect that any revenue increases pale in comparison to the reductions that have preceded them.

A very recent post on Diane Ravitch’s blog makes the case that the pay increases for K-12 teachers that the Far Right has declared to be “historic” are, in even a short historical perspective, very modest at best. See James D. Hogan’s post, “The Pay Scale That No Politician Wants you to See”,” which is available at




3 thoughts on “New Limits on Financial Aid Tied to Tuition in North Carolina

  1. Pingback: 2014 Through the Academe Blog: August | The Academe Blog

Your comments are welcome. They must be relevant to the topic at hand and must not contain advertisements, degrade others, or violate laws or considerations of privacy. We encourage the use of your real name, but do not prohibit pseudonyms as long as you don’t impersonate a real person.