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So much for college tuition predictability for parents

RALEIGH — No matter the political party, North Carolina’s political leadership has made clear that it isn’t particularly interested in keeping the state’s historic commitment to low college tuition.

Some leaders might take issue with that statement. The facts don’t lie.

During the previous recession, average tuition at the 16 University of North Carolina campuses rose by more than 20 percent in both 2001 and 2002. From 1999 through 2003, tuition rose by 71 percent.

Those increases prompted outgoing UNC system President Erskine Bowles to announce a new tuition policy in 2006 limiting average increases over a four-year period to no more than 6.5 percent.

An annual 6.5 percent increase, of course, would still mean university tuition rising well above the rate of inflation.

Bowles, caught in the crosscurrents of demands by university administrators and declining state revenues, may have done his best to stave off higher increases. Still, the policy was being undermined even as he announced that he would be leaving the position of president.

Earlier this year, the UNC Board of Governors approved campus tuition hikes as high as $200 for the current school year. Then came a budget provision from state legislators that allowed another $750 increase to offset budget cuts.

At the state’s flagship, the University of North Carolina at Chapel Hill, tuition and fees rose $1,046, or 18.6 percent, in a single year. So much for tuition predictability for parents and students.

The Board of Governors also announced that, because four years had passed under this new tuition policy, it was time for a new four-year plan. Under the new plan, schools could go above the 6.5 percent tuition cap during “times of need.”

No doubt, a time of need is on the way.

Several schools have already announced that they will seek 6-plus percent tuition hike for the next school year. General Assembly-initiated tuition hikes could make a further mockery of a tuition cap.

Against this backdrop, North Carolina college students are racking up an average of  $19,983 in student debt while in school, according to the Project on Student Debt. Nationally, the amount of debt taken on by students rose 24 percent between 2004 and 2008.

Steve Eisman, the hedge fund manager whose bets against mortgage-backed securities were chronicled in Michael Lewis’ “The Big Short,” sees similarities between the mortgage industry earlier this decade and what’s occurring in the financing of higher education.

“It’s just like subprime, which grew at any cost and kept weakening its underwriting standards,” he said at a conference earlier this year.

For-profit, nonprofit or public, the unsustainable trends are the same: a commodity’s price rising far faster than inflation and more buyers taking on higher levels of debt to purchase it.

To reverse the trends, parents and students could turn to the courts. The state constitution calls for tuition to be free “to the extent practicable.”

They aren’t likely to get any relief anywhere else.

Scott Mooneyham writes about North Carolina politics for the Capitol Press Association.

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