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N.C. universities are on unsustainable path

By Scott Mooneyham
Capitol Press Association
RALEIGH ó Lately, former University of North Carolina system president Erskine Bowles has been going around the country trying to sell the public and public officialdom on the idea that the nationís current fiscal course is unsustainable.
ěI think we face the most predictable economic crisis in history,î Bowles recently told The Wall Street Journal. ěThe economics is very clear. The politics, very difficult.î
Bowles was speaking in his role as co-chair of President Obamaís deficit reduction commission, which came up with a set of unpopular, painful and so far unacted upon budget cuts and tax hikes.
He went on to tell the newspaper how every single dollar spent last year by the U.S. government on discretionary programs could be seen as being borrowed.
ěThatís a formula for failure in anybodyís book,î he said.
Funny thing is, he could have used similar words, speaking in his previous role as UNC system president, about the current unsustainable path of our public universities.
The universities themselves may not be borrowing the money. But they are living on borrowed money. Itís just that the borrowing is by students and their families.
Consider that the average college student in North Carolina graduated with $25,250 of debt in 2010. Among the 16 public UNC system schools, tuition and fees for resident undergraduates will average $5,275 this year.
So, for an average resident student who takes five years to graduate, almost all of their tuition payments could be seen as coming from student loans.
Thatís not the unsustainable trend though.
Like the countryís rising entitlement costs weighed against borrowing and revenue, itís the rate of tuition increases weighed against debt and the ability of students to pay off that debt that canít be sustained down the road.
Over the last decade, tuition at UNC system schools more than doubled, rising 119 percent. Thatís an average annual increase of 11.9 percent. At UNC-Chapel Hill, tuition and fees jumped from $3,219 in the 2001-02 school year to $7,008 this year.
Meanwhile, the average student is graduating with about 50 percent more debt than they did a decade ago.
While college administrators engage in some hand-wringing about rising tuition and declining state support, they donít seem to acknowledge the obvious: Another doubling of tuition over the next decade ó combined with rising debt, rising student loan defaults and a questionable job market ó is untenable.
Something will have to give. At some point, a university financing crisis becomes predictable.
University administrators can pretend thatís not the case. They can keep on with their plans for more double-digit tuition increases.
Or they begin to recognize that their huge, complex institutions require significant reform to cut costs.
University officials may believe they have a problem with legislators and taxpayers right now.
Down the road, their bigger problem is going to be with their customers ó the students.
It would be nice to hear one of those former UNC officials come home to do a little preaching about that unsustainable road.

Scott Mooneyham writes abut state government for Capitol Press Association.

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