Commentaries
No Detours on the Big Government Highway, Part I

Despite lots of rhetoric about cuts to the UNC budget, the university system's expansionary agenda keeps rolling along.

By Jay Schalin

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August 13, 2009

The impassioned health care debate in recent weeks has highlighted the growing philosophical division in this country between those who favor an activist government and those who prefer a limited government. This polarization exists in attitudes about higher education, as well.

The political right wants government’s powers to be limited as a basic principle—feeling, as did Thomas Jefferson, “that government is best which governs the least.” It therefore prefers that the university system limit itself to the main mission of education and to lesser roles in service and research.

On the other hand, the political left, which currently dominates North Carolina’s government and the university system, has ambitious plans for the University of North Carolina (UNC). Liberals see the universities as a solution for a wide array of problems—as an engine of economic development, as a force for income redistribution, and so on. For example, one bill passed into the law this year is S.L. 2009-407, which states “[T]he University of North Carolina Institute on Aging [an academic center located at UNC-Chapel Hill], and the Division of Aging and Adult Services, Department of Health and Human Services, shall help the State prepare for increased numbers of older adults….”

In recent years, with the state’s economy booming and the legislature emptying its stockpiles or reserves, the assembly’s largesse permitted the university system to implement many new programs that matched its philosophy. But this year, with the severe downturn, the expectations were that even the most liberal legislators would have to drop their plans for expansion and focus on fiscal austerity. Officials of all perspectives commented on how deep and painful such reductions were likely to be.

Yet after the dust cleared on Jones Street and the final state budget for the next two years was signed into law by the governor, it appears there was not quite the academic blood-letting that had been anticipated. While the final state appropriation of approximately $2.706 billion to the university system for operating expenses for 2009-10 is roughly 10.6 percent lower than this fiscal year’s projected budget of $3.026 billion, it is actually $23.6 million more (0.9 percent) than the budget approved by the legislature for fiscal year 2008-9. (UNC also gets revenue from tuition and private gifts).

One reason why the cuts were not higher is $137 million provided by the Education Stabilization Fund of the American Recovery and Reinvestment Act—the so-called “stimulus package.”

In fact, the downturn in the economy so far appears to be little more than a temporary speed bump for the large-government establishment’s agenda of expanding its reach via the university system.

One important area where the two perspectives are in conflict is access to higher education. There is some consensus on both sides of the aisle that public university systems exist largely to equalize opportunities by making higher education affordable for low- and middle-income citizens. But the limited government advocates tend to stress the opportunity side of the equation and perceive attendance at the state universities as a privilege bestowed on the students by the state’s taxpayers. Therefore, prospective students must compete and achieve to receive that privilege.

Those on the left favor the equalizing portion—they see university attendance more as an entitlement for everybody, regardless of ability or achievement. They also see the universities as a vehicle to address past grievances and cultural inhibitions to education held by specific groups. Thus their policies include directing resources to segments of the population who have not “earned” the privilege of a taxpayer-subsidized education through academic achievement and who do not have the wherewithal to pay even the low tuition afforded by the state’s subsidization.

In keeping with the “university education for everyone” approach, the new budget does little to limit UNC’s overall enrollment growth, which will be fully funded for both 2009-10 (an additional $44.2 million) and 2010-11 (an additional $97.6 million).

And while the EARN scholarship program, added in 2007-8, is being phased out (saving $16.2 million in 2010-11), the state’s university-based need scholarship program received a $23 million boost for 2009-10 (only $11 million will continue in following years).

The emphasis on need scholarships also reflects the political divide. Although both right and left recognize the value of need-based aid, their favored methods to deal with problems this aid creates differ. Many of the students who receive need-based aid do poorly in school, which is reflected by low graduation rates. At UNC-Pembroke, 44 percent of students qualify for federal aid (similar to the qualifications for state need scholarships) and only 38 percent graduate after six years, while at N.C. Central, 63 percent qualify for federal aid and 49 percent graduate after six years. Conversely, at UNC-Chapel Hill, only 14 percent of the student body qualifies for federal aid, but 84 percent graduate within six years, and at N.C. State the numbers are roughly similar: 18 percent federal aid and a 70 percent graduate rate.

While limited government proponents would prefer tougher admissions standards to improve graduation rates and to lower the cost of subsidizing the state universities, those who prefer an active government reject this type of exclusive policy. They prefer to increase performance by unprepared students by giving them extra attention (considered costly “hand-holding” by some). This year, Winston-Salem State University and Forsyth Technical Community College are getting $475,700 for additional counselors and to “create a Gateway Program to assist working adults with the transition to college,” while UNC-Pembroke is getting $300,000 for additional counselors and others to address the school’s low graduation rate.

The increase in need scholarships was in part balanced by the elimination or reduction of smaller scholarship programs and tuition waiver programs that were initiated in the last few years. Most were targeted to a small population or to a specific need, such as the Future Teachers Scholarship-Loan program ($1.3 million), which began in 2005 and was intended to attract more students to careers in teaching science, mathematics, and special education.

Other scholarships eliminated were narrowly focused middle-class entitlement programs, such as the UNC tuition waiver program for graduates of the School of Science and Mathematics (amount of aid unspecified) or the senior citizens’ tuition waiver ($300,000), which offered university classes free to state residents over the age of 65. A program of scholarships to the private medical schools at Duke and Wake Forest universities has been eliminated as well, saving $447,000 annually. Two other scholarships intended to help students attend the state’s many private schools—the Religious College Grant and the Legislative Tuition Grant—were reduced from $1,950 to $1,850. This resulted in annual saving of $3.2 million starting in 2009-10.

At the same time, tuition at UNC schools will increase considerably—by the lesser amount of $200 or eight percent for all students, graduate and undergraduate, in 2010-11. This will replace approximately $34.8 million in state funding. The brunt will be borne by the middle-class, who do not qualify for significant amounts of need aid.

Another facet of access to higher education that took a minor hit this year is the UNC system’s campaign to increase online education and off-campus learning centers. These measures are intended to improve access to students in rural areas and nontraditional working students who can neither commute to nor relocate to one of the main campuses. Online education cutbacks include a 19.5 percent decrease in the Reserve for Distance Education ($225,872) and a 25 percent drop ($250,000) in appropriations to the UNC-NCCCS (community college system) E-Learning Initiative, which enabled students to complete the first two years of college online. The Gateway Technology Center in Rocky Mount also had its $177,000 budget reduced by 10 percent.

But online education is still rapidly increasing in the UNC system, and a ten percent reduction to the appropriations at only one off-campus education center is hardly a drastic shift in priorities. This year’s budget features continued high levels of increased enrollment, additional money for need scholarships, and cuts that primarily affect the middle class—there is little diminution of the agenda to make easy access to the state’s university system a universal entitlement.

Editor’s note: On Monday, the second part of this article will examine the budget in light of some other areas where there are differences between the proponents of limited and active governments.

 


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