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Wednesday, 12 September 2012 00:00

WCU could benefit from more equitable state funding formula

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Western Carolina University leaders hope to benefit from a philosophical switch in state funding for higher education — one that would clamp down on universities gaming the system, whether on purpose or unintentionally, when it comes to funding student growth.

Every year, colleges and universities in North Carolina send the state their predictions for the following year’s enrollment. The state then allocates funding for each school based on the number of students it expects to attend.

Some schools meet or exceed their projected enrollment numbers, while others fall short. When universities don’t actually realize their expected growth, the state previously hasn’t made them return the extra money it had doled out.

“Theoretically, if you don’t make that target, that money should be taken away,” said David Belcher, WCU’s chancellor, at a Board of Trustees meeting last week.

That didn’t happen though.

A few schools did not reach their estimated enrollment goals this year because of extenuating circumstances, said Joni Worthington, vice president of communications for the University of North Carolina system.

Some students received less financial aid than they anticipated or needed and were forced to drop out, leading to unexpected drops in enrollment. Some schools toughened their admission standards, meaning they had a smaller pool of qualified applicants.

Starting next year, however, those who don’t meet their stated goals will have to forfeit additional money. The new reversion requirement would have gone into effect this year, but some institutions “would have hemorrhaged” from the loss, Belcher said.

“There were institutions that didn’t meet their enrollment targets, and it would have hurt them,” Belcher said.

Although he did not name names, Belcher said one school would have lost $5 million.

Belcher said he felt the current funding system negatively impacted schools like WCU who always meet or exceeded their goals.

“We didn’t get the rewards we were supposed to,” Belcher said, adding that he had phoned the president of the University of North Carolina system and expressed his concern about the funding model.

Schools that overstated their projected enrollment and sucked up money they weren’t entitled to could have been allocated to other universities instead.

The change to the funding model is part of a larger ideological shift among the University of North Carolina Board of Governors to move away from per-student funding and toward results-based funding.

“It was a transition in the philosophy of the board,” Worthington said. “Campuses needed to be held more accountable for reaching those goals.”

The Board of Governors, a policy-making body that oversees state colleges and universities, hopes to award money to schools based on markers such retention rates and the number of students who graduate each year, Worthington said.

How to fund financial aid

Belcher also briefed the trustees on a possible mandate that could come down from the Board of Governors in the future.

The Board of Governors recently discussed capping the percentage of tuition that schools can dedicate to financial aid at 25 percent. Currently, there are no restrictions, and WCU designates a little more than 25 percent to both financial and merit-based aid.

The fear is that “essentially you have some students paying so other students can go to school,” Belcher said.

Trustee George Little asked how Belcher thought the Board of Governors would vote on the matter.

Discussions just started recently, Belcher said, and it’s too early to tell how things will end up.

“They are all over the board on it,” Belcher responded. “There were some passionate requests for not having a cap at all.”

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