How are universities reacting to the Supreme Court’s decision against racial preferences in admissions? At one of the losing institutions, the University of North Carolina–Chapel Hill, the chancellor has hastily announced a new income-based tuition giveaway without prior approval from his overseeing board. 

The UNC Policy Manual warns that “No action should be taken which would have the effect of establishing a new community service or student financial aid program without specific approval by the Board of Governors.”

But in response to the loss, Chancellor Kevin Guskiewicz announced on July 7 that, starting next year, Carolina will charge newly admitted students from North Carolina no tuition or required fees if their family income is under $80,000.

While the plan’s dramatic timing looks like an attempt to counteract the Supreme Court’s opinion, it should be examined on its own terms. It is bad policy for several reasons.

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First, the plan spends taxpayer money to give away college tuition. The required dollars must come from somewhere—such as taxpayer funds, new philanthropy, higher tuition for other students, or budget cuts. It is exceedingly unlikely that Carolina will stop putting its hand out for taxpayer dollars each year.

Second, the plan’s income threshold shows that it privileges middle-income, not low-income families.

Low-income families already have the Carolina Covenant scholarship—students at up to 200% of the poverty line must take a work-study job, but grants and scholarships cover all the rest of their financial need. For a student in a family of four, a family income up to $53,000 (the 38th percentile in North Carolina) triggers this scholarship.

This means that the new plan is directed at middle-income families. The $80,000 cap even reaches the 55th percentile of family income.

Third, unlike the Carolina Covenant scholarship, the new plan is a blunt instrument, taking no account of family size. Nor does it consider family wealth. It does not include work-study like the Carolina Covenant and Blue Sky programs.

Fourth, Chancellor Guskiewicz’s plan will change the balance of tuition revenue across UNC System institutions. Under the UNC System’s new, laudable performance-based funding formula, student debt and graduation rates are significant factors. Carolina and other universities are eligible for up to three percent bonuses for good performance. By changing the balance of student debt across the UNC System, Carolina is unilaterally changing its chance for a bonus versus the other UNC System institutions.

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Such effects on competition and enrollment justify why the UNC Policy Manual requires board permission. But Chancellor Guskiewicz did not even alert his own trustees—at least so far as recent public meetings are concerned. Such a plan seems not to be recorded.

The chancellor probably left the UNC System Board of Governors and state legislators equally in the dark. The latest budget request mentions no such plan.

What happened to shared governance among the UNC System faculty, administration, and board?

The chancellor is now pushing this scheme through after spending $24.5 million just to lose the UNC v. Students for Fair Admissions lawsuit, which put an end to racial preferences. That’s the equivalent of a full year of tuition for 3,500 North Carolina students.

If the university cut its $3 million diversity, equity, and inclusion bureaucracy to cover some of the costs, the changes might be more palatable.

However UNC intends to pay for it, it was a mistake to spring this rushed plan on the public and on UNC’s boards unilaterally.