What N.C.’s Budget Includes On Higher Ed Spending

North Carolina lawmakers released a long-overdue budget on Tuesday, over a month after Republican legislative leaders first announced a framework. The plan is a year late, and is the first comprehensive budget agreement since 2023.

The 600-plus page bill includes a number of provisions related to higher education funding and makes some statutory changes that will affect schools across the state.

Lawmakers plan to approve the budget later this week and send it to Democratic Gov. Josh Stein’s desk. Here’s what the plan includes for higher education.

Enrollment Funding

The UNC System got its top priority funded in full, with an allocation of $153.8 million for enrollment growth.

The funds, which have been long awaited, subsidize the cost of teaching more in-state students, allowing schools to hire academic advisers, offer more courses, and accommodate last fall’s record enrollment.

Although Chief Financial Officer Jennifer Haygood told the Board of Governors in May that the system had been “assured” of legislative support for enrollment funding, she simultaneously told campus leaders to be “vigilant in [their] advocacy” for the money. Notably, there was no mention of enrollment funding in the original budget agreement Republican legislative leaders announced last month.

North Carolina is one of 29 states that rely on some measure of student enrollment to determine funding for four-year institutions. The funding is considered an incremental adjustment to annual funding requests, which were also provided for in the released budget.

The formula for calculating how much money each school receives depends on a few factors, including how many credit hours are provided for each discipline, the research capacity of the institution, and general overhead costs. This means the amount of money schools will receive widely varies; N.C. State University had the largest request—over $35 million—while Winston-Salem State University requested just over $1.4 million.

The legislature specifically prioritizes enrollment funding for credit hours in engineering, nursing, business and other health and STEM disciplines. Funding from other classes totaled over $12 million, or just 8.1% of the total. 

The funding “keeps our universities strong, fiscally sound, and focused on serving North Carolina,” said UNC System President Peter Hans in a statement. “At a time when other higher education systems across the country are cutting back, the UNC System is reaching more students, graduating more of them on time, and meeting the workforce needs of a fast-growing state.”

Another provision in the budget further incentivizes UNC System schools to support health care workforce development by providing $20 million to the Board of Governors to be distributed to support developing and expanding courses that lead to related degrees. 

Disciplinary Records

Records related to disciplinary proceedings at the state’s public universities—including those related to sexual misconduct that contain personally identifiable information under federal law—are now exempt from the state public records law. 

The “Protect Campus Survivors Act,” which Republicans first introduced last year, essentially undoes the state Supreme Court’s 2020 ruling against UNC-Chapel Hill that required public universities to release certain information about these cases, such as the name of the perpetrator and the school’s sanctions. 

Republican Sen. Michael Lee said in a legislative committee meeting in May that the intent of the act was to protect survivors of sexual misconduct by ensuring that information that could inadvertently identify them is not subject to release. But some have raised concern it will shield perpetrators and universities from scrutiny.

Lawyer Hugh Stevens, who represented The Daily Tar Heel and other media outlets that sued UNC-CH over disciplinary records, previously told The Assembly that the legislation would prevent students from knowing if classmates had been found responsible for misconduct or assault. It could also prevent the public from evaluating whether universities properly handled investigations, he said.

The act allows universities to release information about disciplinary proceedings that do not include identifiable student information, such as “aggregated data, guidelines, instructions, or summaries.”

Propel NC

The North Carolina College Community System will receive most of the funding they requested to implement a new funding formula, “Propel NC.” The system asked the legislature for $68.5 million in recurring funds to modernize the workforce sector funding formula, but the final budget allocated $57.5 million.

Propel NC would prioritize programs designed to lead to high-demand jobs. It’s been more than a decade since the community college funding model was last updated, and the new version has been marketed as a “first-of-its-kind” plan that could serve as a model for community colleges nationwide.

“We are grateful to the General Assembly for its support and proposed investment in the North Carolina Community College System and Propel NC, ensuring our community colleges are prepared to meet the needs of all students and job creators,” Alex Fagg, the system’s vice president of government and external relations, wrote in an e-mailed statement.

The budget also fully funds the system’s request for a $6 million enrollment growth reserve, which would provide funding to community colleges if they experience enrollment spikes.

SCiLL

UNC-CH’s School of Civic Life and Leadership is already set to become an independent academic unit in August, moving it out of its original home in the College of Arts and Sciences. But legislators are now requiring it by law.

The budget states that the university must “establish and maintain the School of Civic Life and Leadership as a separate reporting unit.” The school will also receive $5 million in recurring funds.

The legislature was an early supporter of SCiLL, allocating millions in start-up funds and mandating that it hire faculty from outside the university. The UNC System last year identified the school as one of a handful of programs for which it would seek additional state support.

SCiLL has been a source of controversy on campus. Last fall, the university launched an investigation after reports of turmoil among the school’s faculty and leaders; The Assembly and other media outlets have sued UNC-CH to obtain the results of the probe, which the university says are not subject to disclosure under state law.

NCInnovation

House Republicans and Democratic Gov. Josh Stein wanted to fully claw back $500 million that lawmakers previously allocated for NCInnovation, a nonprofit intended to help university researchers commercialize their work. 

Senate Republicans were willing to strip $400 million from the program and leave it with $25 million annually over the next four years. In the end, the budget didn’t address NCInnovation at all, meaning the $500 million allocation remains in place.

NC Promise

Out-of-state students attending one of the UNC System’s four NC Promise schools, which offer lower tuition rates than the others, will pay more starting in the 2027-28 academic year. 

Out-of-state students will pay $4,000 per semester, up from the $3,500  a smaller spending bill legislators approved last fall set for the upcoming year. Before that, the out-of-state rate was $2,500.

The initiative offers in-state tuition at $500 per semester for Elizabeth City State University, UNC Pembroke, Fayetteville State University, and Western Carolina University.

NC Promise has operated at a deficit for several years, in part due to enrollment being higher than system officials projected.

In-State Tuition Exemptions

Effective December 1, any public university student who is convicted of assaulting a police officer or state employee while enrolled will be disqualified from receiving the in-state tuition rate. They will also be ineligible to receive state-funded scholarships or grants. The ban would begin in the semester immediately following the student’s conviction.

Helping N.C. A&T Reach R1

In a news release about the budget, Republican legislators touted their allocation of $10.6 million to N.C. A&T State University to help it achieve Research 1, or R1, status in the Carnegie Classification system.

A&T, the country’s largest historically Black university, narrowly missed the criteria to clinch the ranking last year. The money allocated in the budget is intended to help the school increase its research spending and the number of doctoral degrees it grants each year, both of which will be considered in the next round of classifications in 2028.

ApprenticeshipNC

To make up for a loss in federal grant money, the state will allocate $3.1 million to ApprenticeshipNC, the state agency responsible for registering and supporting apprenticeship programs. This fully funds the agency’s request.

The agency had previously said that U.S. Department of Labor grants, which supported 65% of their operations, would expire in June. Without the additional money, they warned, the agency could lose up to 18 apprenticeship experts and all marketing and communications capacity.

Additional reporting from Bryan Anderson.