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In UNC System, Where Does Your Tuition Money Go?

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This week, WFAE explores the cost of the UNC system for students and universities. Tuesday, we explained how the state constitution specifies that public higher education should be as free as practicable for North Carolina residents. Today, we explain where the money goes after students and parents write tuition checks. Here's a hint: you don't pay for what you get.

The tuition bills the UNC system sent out this fall for the first time had a pie chart. It answers what seems like a simple question: When you write a tuition check, where does the money go?

Now, we’re not talking fees that students are required to pay for things like athletics or health services. Your bill tells you where that money goes. Tuition can be murkier, hence the pie chart.

Here's how it shakes out: the biggest slice of the pie, about 50 percent, goes to instruction. At UNC-Chapel Hill, senior Kiyah McDermid from Fayetteville says that makes sense.

"I would think that the majority of my tuition would go to paying my teachers' salaries anyway," she says.

Another 15 to 20 percent goes to what's called academic and institutional support: administrative staff, human resources, that kind of stuff.

A small percentage goes to student services - think: admissions and counseling. And 15 percent goes to keep the lights on, maintain the wi-fi and the classrooms.

Then there's a slice that ranges from 10 percent to 21 percent, depending where you're in school. It's labeled need-based financial aid.

We also talked through this with Carter Quinn. He's a UNC-Chapel Hill student from Carrboro who's paying for college with his mom's help.

When we told him some of his tuition is helping to pay for other people's tuition, he said that makes sense.

"I think that's good because someone like me who can afford to pay full price should be supporting people who can't," Quinn said.

About a third of the students we talked to knew about this.

Alex Reinhold is another one. She's a junior at UNC-Chapel Hill from Jacksonville. She's heard classmates say they think this is unfair.

"Some students may feel like, 'Hey, I didn't get financial aid. I had to take out a student loan to pay for my seat, so why is my student loan going towards me and the person next to me?'" she says.

That issue is a big reason UNC system's Board of Governors required the colleges to send out the pie charts this fall. 

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Credit Michael Tomsic
UNC system President Tom Ross speaks to the Board of Governors during a meeting this summer.

"The important thing for the students and for us is transparency," board member Marty Kotis says. "So where does the money go? Where does it come from? How is it being used?"

Setting some tuition aside to help pay for need-based aid is a relatively new use. The Board of Governors started requiring campuses to do that in 2000. The idea was to try to prevent the neediest students from being priced out as the cost of tuition increased.

"We've got to have the need-based financial aid; it's more important now than ever," says board Vice Chairman Louis Bissette. "But some people would say it's probably unfair to charge one family money to be used for another family."

The board has become more critical of this policy in recent years after Republicans took control of the General Assembly and appointed new members. Two years ago, they told campuses the policy was no longer required. But all 16 campuses still do it anyway.

"We’ve drastically increased tuition beyond what people can pay," board member Champ Mitchell says. "We’re crushing the middle class and part of that is being used to fund other people. The question is: how much can you ask folks to carry who are paying tuition and struggling?"

Board members came up with an answer to that question in August. They decided to cap the amount of tuition that can go to other students' tuition at 15 percent.

There are five campuses above that cap, including UNC-Chapel Hill at 21 percent and N.C. State at 18 percent. They can stay there but can’t go any higher. (Correction: the campuses over the cap are frozen at the current dollar levels they set aside for financial aid, not the percentages. That means as tuition increases, the percentages will eventually go down because the same dollars will be a smaller part of a bigger pie.) UNC Charlotte is the furthest under the cap at 10 percent.

North Carolina isn't alone in using some tuition to pay for need-based aid. Thirteen states require it, according to a report last year by the State Higher Education Executive Officers Association.

In the UNC system, about 40 percent of in-state students receive that kind of aid. It averages $2,000, and the majority goes to families making less than $40,000 a year. Some goes to families making $80,000.

That aid helped Taylor Walker from the town of Wake Forest go to college. 

"I remember sitting down where I was when I got it," she says. "I cried because I just knew, oh my God, I can go to college because what else am I going to do if I don't?"

Walker received a variety of need-based aid and scholarships to go to UNC-Chapel Hill.

But the single biggest thing that lowered the cost for her didn't show up on any financial aid forms. It's what the state pitches in for her and every other student in the UNC system.

In the final story of our series Thursday, we'll explain that side of how you're not paying for what you get - even if you're paying full price, you're spending way less than what your education actually costs.