Should UNC Wilmington Enroll Fewer Out-of-State Students?

The question is not as simple as a recent penalty suggests.

The University of North Carolina at Wilmington (UNCW) is facing a large monetary penalty for enrolling too many out-of-state students two years in a row. One question looms: How does this affect North Carolinians?

The UNC System has maintained a cap on non-resident enrollment since 1986 to encourage in-state enrollment; this policy has been adjusted over the years and recently saw updates in April of 2022. The Policy on Non-Resident Undergraduate Enrollment establishes non-resident enrollment caps for all constituent institutions (with the exception of UNC School of the Arts).

The original policy capped out-of-state enrollment at 18 percent, but the system office has since made adjustments for a number of institutions. UNCW maintains the original 18-percent cap, meaning, for example, that it could enroll only 438 out-of-state students in fall ’22. The caps updated or renewed that year were “calculated as a percentage of the previous year’s first-time freshman cohort.”

Allowing for increased non-resident enrollment may not be to North Carolinians’ disadvantage.In the fall of 2022, four institutions exceeded their out-of-state caps, including UNCW. Of those four, UNCW had the second-lowest excess percentage (20 percent), with a surplus of 44 students. All four institutions were thus in dangerous territory, as the system policy states that penalties will be given after two consecutive years of exceeding the cap.

UNCW apparently did not heed that warning. The following year (FY 23/24), UNCW exceeded the cap again (at 27 percent), with a surplus of 204 out-of-state students. It was thus penalized per UNC-System policy. The penalty for non-compliance is having one’s state operating budget reduced, and for UNCW this reduction totaled $4 million.

Given the size of the penalty, one is inclined to wonder if these new students are actually costing N.C. taxpayers anything. Furthermore, are they occupying seats that could have gone to state-resident students?

Careful consideration reveals that there may be circumstances when allowing for increased non-resident enrollment is not to North Carolinians’ disadvantage. As long as N.C. taxpayers aren’t financially burdened and seats aren’t being taken from state applicants, perhaps some institutions could stand to have their cap increased, as has occurred in the past.

For example, if institutions are charging enough out-of-state (OOS) tuition to cover all of the education and related (E&R) spending for those OOS students and also have enough capacity to house and teach them, then it is to the university’s benefit to allow more non-resident students. Ultimately, so long as North Carolina taxpayers are not footing the bill for non-resident-student costs and capacity is available, we should welcome out-of-staters.

With this in mind, let’s break down the numbers for UNCW. Analyzing E&R spending helps to explain the total cost of student learning, as it is largely focused on instructional expenses. A Delta Cost Project report defines education and related spending as follows: “E&R includes spending on instruction, student services, and a portion of general support and maintenance costs associated with these functions.”

Using the E&R formula and IPEDs data, the Martin Center calculated the total E&R spending per out-of-state student for fiscal year 2021-22 at UNCW, arriving at $16,816. By contrast, out-of-state tuition that year was $21,199, a difference of $4,383 per student. UNCW enrolled 630 out-of-state students in fall 2023 (up from 482 in fall 2022), which means that the university made approximately $2.7 million from out-of-state students. While this is merely an estimate—IPEDs does not yet have more recent E&R data—it looks as though UNCW exceeding its cap has not been detrimental to N.C. taxpayers, as tuition is high enough to ensure that educational costs are covered.

So long as North Carolina taxpayers are not footing the bill, we should welcome out-of-staters.As for instructional space, it appears that the institution definitely has room for more students. The UNC System’s 2021 facilities study shows that UNCW is under its target hours for both classroom and laboratory usage. Classrooms are being utilized for 24 hours per week (combined day and nighttime hours), which is well under the target of 35 hours, and laboratories are under the 20-hour target at 17 hours per week (combined day and nighttime usage). Additionally, the university has room for growth when one considers classroom and laboratory stations (the amount of desk space available). Usage is below the 65-percent target for classrooms and the 75-percent target for laboratories.

Housing capacity is slightly more complicated, as UNCW has been continuously growing over the past several years and is one of the fastest-growing institutions in North Carolina. To keep up with this growth and maintain its competitive edge, UNCW is working on a new Campus Master Plan, to be completed over 10 years with a main focus on student housing.

UNCW did face housing shortages in the fall of 2023. In part because freshmen and sophomores were required to live on campus, there were 245 first-year students without beds. (They were instead housed in dorm common areas and office space.) And while there does seem to be some correlation between the surplus of OOS students (204) and the number of students without beds (245), it is difficult to determine so precise a reason for the housing shortage. Since there has been overall enrollment growth in recent years, it seems unfair to blame the housing struggles solely on OOS students.

Reached for comment, university representatives told the Martin Center that “it can be challenging to predict how many out-of-state students will accept our offer to enroll at UNCW.” Nevertheless, the institution “take[s] our mission to serve the citizens of North Carolina very seriously, and, overall, about 86-88 percent of the nearly 18,000 students enrolled at UNCW typically come from our home state.”

In any case, UNCW’s move doesn’t appear to have been an unwise one. Data show that N.C. taxpayers are not funding non-resident education, that tuition is high enough to cover those costs, and that the university has room for more students. The only possible question is whether housing is sufficient. However, as long as N.C. taxpayer dollars are not funding housing projects designed exclusively for the benefit of OOS students, there doesn’t appear to be a true issue there either.

Overall, it would seem that UNCW is simply enrolling the students who are expressing interest and trying to utilize their facilities as much as possible. With enrollment down for all UNC-System institutions, it seems like a fair move to capitalize on those interested in attending. Since OOS students are not taking spots from interested resident students, there seems to be no real reason to put an end to it. Perhaps the UNC System should consider an enrollment-cap increase once the UNCW penalty has been taken care of. At the very least, it will be interesting to see if OOS enrollment continues to creep up this coming fall or if UNCW will stick to the 18-percent cap following recent repercussions.

Ashlynn Warta is the state reporter for the James G. Martin Center for Academic Renewal.