Paying more for less? NC lawmakers propose UNC System tuition increases, budget cuts

North Carolina Republicans are eyeing large cuts to higher education spending and weighing whether to force state universities to raise in-state tuition for the first time in years — a decision that comes as the state legislature seeks to find ways to pay for further tax cuts.

Education spending on grade schools, colleges and universities makes up about half of the state’s $33 billion annual budget. Lawmakers are now looking there for savings, as they grapple with the fiscal reality of continued tax cuts and a looming budget deficit that the legislature’s own analysts predict could hit the state as soon as next year.

The state House and Senate each have their own budget plans, which they’ll use as a basis for negotiations that are expected to stretch into the summer. And while the precise details vary, both chambers agree on this much for higher education: Freeing up more than $100 million in state spending through a combination of tuition hikes and budget cuts.

At the same time, both chambers propose major new tax cuts: $200 million worth of tax cuts in the House budget plan, and $1.1 billion in the Senate budget.

The UNC System has long sought to keep tuition low; its flagship school UNC-Chapel Hill is regularly ranked the No. 1 best-value public university in the nation, in an analysis that combines schools’ cost and quality.

For the past nine years, the state has managed to stave off tuition increases across the entire UNC System for in-state students by raising out-of-state tuition and by increasing student fees. Fees vary by campus and can be used to fund athletics, campus security, buses and more.

On average, in-state students pay $7,336 annually in tuition and fees.

University leaders favor some cuts

Regardless of what budget cuts and tuition hikes the legislature ends up ordering in the new state budget, however, UNC System leaders have already begun cutting spending on their own. In a letter to the system’s Board of Governors last month, UNC System President Peter Hans said he’s directing cuts to the bureaucracy and administration of the university system and individual campuses.

“The goal of this effort is to rebalance and calibrate the university back toward its core missions of teaching, research, and service — and to remove accompanying administrative burdens that make it hard for us to thrive,” he said.

The system as a whole, as well as each individual campus, is currently led by Republican political appointees picked by GOP legislative leaders. They include political donors, campaign operatives, lobbyists and former legislators. They chose Hans, a former Republican congressional aide and lobbyist, to become president of the UNC System in 2020.

Last year the system eliminated all of its diversity-, equity- and inclusion-related programs and jobs, freeing up $17 million. More recently, UNC-Greensboro and UNC-Asheville have also voluntarily cut their budgets by several million more dollars. That work could make them exempt from some further cuts, at least in the Senate version of the budget.

And across all campuses, more widespread cuts to administrative spending are on the way, Hans told the board of governors in April.

The focus on cutting university administration — which could range from academic counselors to regulatory compliance staff — has been well received at the James G. Martin Center for Academic Excellence, a Raleigh think tank that advocates for conservative-leaning reforms to higher education in North Carolina.

“This is a good area for cuts,” Jenna Robinson, the group’s president, said in an interview. “I think it makes a lot of sense.” She added that almost every school in the UNC System has at least twice as many administrators as it does faculty members.

Some professors, however, say their departments’ administrative staffers do valuable work helping students, and they help free up the faculty to focus more on teaching.

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Some at the state’s flagship university might also wonder where new administrative cuts could be found. UNC-Chapel Hill’s budget for the current school year shows that of eight “peer” institutions — other highly rated, research-focused public universities — all but one of those peers spend more on administration.

“This is the third public university I’ve taught at, and it’s the most thinly staffed,” Carissa Byrne Hessick, a UNC School of Law professor who previously taught at the University of Utah and Arizona State University, said in an interview. “So I’m not sure where administrative cuts could come from that wouldn’t negatively impact students. But I can only speak to what I see at the law school.”

The looming cuts might not just be limited to campus bureaucracy, however. The Senate wants to require universities to cut at least $53 million worth of academic programs and jobs.

The House budget proposal would order even larger cuts to higher education spending — about $70 million — but it would give university leaders wide latitude to choose where to make those cuts. That could limit any hits to academic services.

“They told us they knew cuts were coming, but they wanted flexibility,” said Rep. Brian Biggs, R-Randolph, an education budget-writer in the state House. “So we're giving as much flexibility as possible.”

University system leaders don’t appear dissatisfied with the news of impending budget cuts and tuition increases. On the same day this month that the House rolled out its budget plan, the UNC System Board of Governors voted to increase Hans’ annual salary by $145,000 — a 32% raise — as well as to give him a $442,000 bonus.

In the House budget plan, most other state employees would receive a 2.5% raise, spread over two years. The Senate plan proposes a 1.25% raise for most state employees.

In last month’s letter to the BOG, Hans said he hopes the looming budget cuts make the state’s universities more nimble and in turn help increase the general public’s satisfaction with them.

“It’s not only that growing bureaucracies cost a lot of money,” he said. “They also sap initiative, creativity, and drive with too many layers and too much duplication. They make it harder for American institutions like the university to accomplish the grand designs we expect of them – which, in turn, undermines confidence.”

Details of the plans

The state Senate voted in April to approve a budget plan that would cut $70 million from public universities and $57 million from community colleges, along with orders to enact more than $46 million worth of tuition increases in the UNC System, but only on out-of-state students.

On Thursday the House of Representatives approved its own budget plan. It would order the UNC System to enact $30 million worth of tuition increases — and to slash $80 million from their budgets next year, growing to $100 million worth of cuts in the 2026-27 school year.

Unlike the Senate, the House doesn’t seek to cut community college funding. The House plan, also unlike the Senate’s, would open the door to in-state tuition increases. It would average out to about a 2.5% increase, legislative staffers said Thursday in response to questions from Rep. Wyatt Gable, R-Onslow, a 22-year-old state legislator who graduated this month from East Carolina.

The two budget plans agree on some cuts: Both suggest slashing graduate student tuition waivers by $3.5 million and eliminating $7 million worth of vacant positions.

They also both propose getting rid of a $5.3 million program that helps students close to graduation with tuition if they’re hit with unexpected financial burdens — money that Rep. Zack Hawkins, D-Durham, said ought to be added back in.

“If you're in college and you're a few credits from graduating, and your car breaks down, house burns down, some emergency falls upon your family, and that prevents you from continuing your education, that is serious,” Hawkins said.

Unlike the House plan, the Senate plan would also cut several million dollars worth of funding from scholarships, research funds and other sources.

Both chambers are also thinking about different strategies to take back the $500 million given in the 2023 state budget to NCInnovation, a public-private project meant to identify and fund university research with commercial promise. Republican President Donald Trump has also pushed to massively cut funding for university research, grants and other funding.

Some of those federal funding cuts have already happened; others have been temporarily blocked in court.

Some spending might rise

One of the few areas where Republican lawmakers want to grow university spending is at UNC-Chapel Hill, and specifically its new School for Civic Life and Leadership — an effort to increase the representation of politically conservative classes and faculty members on campus.

UNC officials sometimes pitch the school as nonpartisan, although when the school was first created in 2023 the chairman of UNC’s Board of Trustees — Chairman Dave Boliek, a Republican who now serves as state auditor — told Fox News the new school was created “to try to remedy” a lack of “right-of-center views” on campus.

When the legislature first created the School for Civic Life and Leadership in 2023, it said it should have between 10 and 20 faculty members. The Senate budget imagines a ramped up staff of “at least 20” professors, with $8 million per year to make that happen. The House budget proposes $4 million.

Rep. Maria Cervania, D-Wake, equated the school to DEI for Republicans and questioned why the legislature would boost its funding when it’s eliminating all other DEI programs.

“The UNC system already has taken steps to eliminate diversity, equity and inclusion policies and positions, to ensure that our academic institutions remain centers centered in unbiased education,” Cervania said during debate over the House budget. “This significant recurring investment warrants thorough scrutiny — especially in light of the recent legislative actions that aim to promote institutional neutrality.”

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Cervania proposed taking away all of the funding for the school and instead putting that money toward efforts across the UNC System to study hate crimes, and to give campus police more training.

The House shot down her proposal in a mostly party-line vote. One Republican sided with Cervania; three Democrats voted against her amendment.

“UNC-Chapel Hill has already got the School of Civic Life kicked up, and it's a very popular school,” said Rep. Kyle Hall, R-Stokes.

Private college cuts

Both budget plans would also limit the ability of North Carolinians from low-income families to receive need-based scholarships at private colleges and universities.

Republicans created those state-funded scholarships for private school students in 2011, the same year they took control of the legislature. But now some see the program as one that could be trimmed. Currently all accredited private schools are eligible for that state-funded aid, but both chambers suggest a partial cut.

The Senate budget proposes limiting those scholarships to only schools with an endowment of less than $1 billion. Sen. Kevin Corbin, R-Macon, told WRAL that schools with such a large endowment should be using their own money, rather than relying on state taxpayers, to help out lower-income students.

There are dozens of private colleges and universities in North Carolina. Only three have wealthy enough endowments to be affected: Davidson College, Wake Forest University and Duke University. And Corbin added that at least one of them has already taken steps to do what the legislature wants: Duke, which offers free tuition to any undergrad student from North Carolina or South Carolina whose family makes less than $150,000.

“By providing more equitable access to a Duke education, and ensuring students have the additional support and resources they need to truly thrive while here at Duke, we will also make our campus community stronger,” Duke says on its website.

Duke announced that policy in 2023. The same year, UNC-Chapel Hill announced free tuition for undergrads whose families make less than $80,000.

Duke’s endowment was $11.9 billion last year, the 16th biggest in the nation, according to the National Association of College and University Business Officers. Wake Forest’s was $2 billion and Davidson’s was $1.4 billion. Two public universities in the state also have ten-figure endowments: UNC-Chapel Hill with $5.7 billion and N.C. State University with $2.2 billion.