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Revisiting the Out-of-State Cap

The UNC system considers changing the geographic background of its students.

By Duke Cheston

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February 07, 2013

Would enrolling more out-of-state students help finance our state’s university system, raise its national reputation, and spur the economy? Or would it be a slap in the face to state citizens who support the system with their taxes?

State leaders have been wrangling with such questions. A proposal to raise the cap surfaced recently at the January meeting of the UNC Board of Governors.

 The UNC system currently limits to 18 percent the number of out-of-state students that each university can enroll. The Board of Governors put the cap in place in 1986 and in 1994 started enforcing it with budget penalties for universities that went over the cap. For example, UNC-Chapel Hill was supposed to pay $335,000 in fiscal 2011 after it went over the limit by 24 students. That penalty was cut to $158,225, however, officially because it was deemed too harsh in light of recent budget cuts.

For some schools, the cap is irrelevant. At UNC-Pembroke, for example, only 3 percent of students who enrolled in 2012 were from out of the state.  Only 12 percent of UNC-Asheville’s freshmen were from out of state, in the latest year reported by the College Board.

But UNC-Chapel Hill has chafed under the limitation for years. A number of its peer institutions, not burdened by such a low cap, enroll a much larger proportion of out-of-state students. For example, 22 percent of Penn State students, 33 percent of University of Virginia students, 35 percent of University of Southern California students, and a whopping 43 percent of University of Michigan students are from out of state. 

Those schools have an advantage in both revenues and in student selectivity. Tuition at UNC-CH for out-of-state students is $28,250, nearly four times the $7,500 charged to in-state students. In addition to receiving more tuition, the universities draw from a larger pool of applicants.

But this time NC A&T University is at the center of the debate. At the January meeting, Chancellor Harold Martin said that his university finds it especially difficult to find qualified students. As a historically black school that specializes in challenging fields like engineering, he’s looking for talented students in a talent pool that is already eagerly picked over.

NC A&T went over the cap by a considerable amount this past fall, admitting 31.4 percent out-of-state students in its freshmen class—going over the 18 percent limit by more than 50 percent. Although the overshoot is so high as to suggest the university was making a political statement, school officials insist it was just a fluke. The school changed its enrollment process slightly this year and had not predicted that so many accepted students from outside the state would actually enroll. 

Clearly, administrators at NC A&T would like to see the cap raised. NC A&T has struggled to find enough qualified students from North Carolina. In 2002, each school in the UNC system set a ten-year goal for enrollment growth; after 10 years, NC A&T is about 5,000 students short of its goal, the furthest behind its goal by far of any UNC school.  “Absolutely no in-state student who qualified for admission . . . was denied admission because of an out-of-state student accepting admission,” Wanda Lester, associate vice chancellor for academic affairs at NC A&T, told the Pope Center. 

Lester supports raising the cap in order to improve the quality of academics at UNC schools and to improve the long-term economic outlook for the state. “I’m not saying there should be no limits,” she said, but a higher cap would be beneficial nonetheless.

Proponents of increasing out-of-state enrollment say it would benefit the state economy because more bright students would stick around after graduation, but it’s a difficult claim to verify. Indeed, it’s difficult even to say how many out-of-state students stay and work in the state after graduation.

Proponents also say that it would not mean fewer spots for in-state students; the proposal would expand enrollment overall, keeping the number of in-state students the same and just increasing the number of out-of-state students allowed in.

Unfortunately for NC A&T, proposals to increase out-of-state enrollment have been floated before and they never got very far.

For one thing, state taxpayers don’t like the idea of subsidizing students whose families don’t pay taxes in North Carolina. Even though out-of-state tuition is much higher than in-state tuition, it still is far from covering the cost of a UNC education. In 2009, UNC-CH spent $58,379 per student, according to National Center for Education Statistics data.

Another objection is that allowing more students from outside the state would make it more difficult for North Carolina students to get into a North Carolina school such as Chapel Hill. This is perhaps the strongest argument among parents with college-age children. “When you have children, you would certainly hope that you could get the best value for their education,” Irvin Roseman, a Board of Governors member from Wilmington, told this reporter.

A raised tuition cap may not be palatable to state leaders, but a related idea might be: setting a new tuition level—higher than out-of-state—for international students. The idea is the brainchild of Bill Daughtridge, former member of the Board of Governors and current secretary of administration for Governor Pat McCrory. 

Across the country, many colleges have tried to recruit foreign students as a way to boost revenues, since foreigners often pay full price to attend. “This is becoming kind of big business,” Peggy Blumenthal, an expert on international education, told the New York Times in December. Some colleges, such as Dickinson State in North Dakota, have been so eager to fill seats that they are willing to accept foreign students who can’t even speak English. 

So far, though, all that the UNC Board of Governors has proposed along the lines of increasing out-of-state students is to increase the number of graduate students at UNC. Since there is no cap on the number of out-of-state graduate students, some of the benefits of loosening the cap will prevail. That is, more students will pay out-of-state tuition, and perhaps they will add to UNC’s prestige.

All in all, a change in the undergraduate cap is unlikely right now. But if pressure continues to build, the issue will surface again.

 


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