North Carolina’s top public university leaders convened Thursday for their final meeting before the start of the 2025-26 school year in August, which will kick off amid a cloud of financial uncertainty.
The state legislature’s failure to pass a new state budget has presented budgetary pressures for the state’s 16 public universities, most of which are growing but will nevertheless have to operate on outdated budgets from last year.
However, Republican state lawmakers are also likely to force the UNC System to raise tuition and cut millions of dollars in spending once the new budget does pass, to help pay for new tax cuts. But while the budget remains in limbo, the exact details of what any cuts might look like are still a mystery. The state House and Senate both want to see higher education funding cuts and tuition hikes, but they’ve presented very different proposals for how exactly to accomplish that.
Universities in North Carolina are also facing pressures from the federal government, as Republican President Donald Trump has pushed to slash funding for scientific, medical and other research nationwide. Republicans in Congress also voted last week for Trump’s plan to eliminate federal funding for public broadcasting, including TV and radio stations operated by the state’s public universities.
Jennifer Haygood, the UNC System’s chief financial officer, told the Board of Governors meeting Thursday that UNC-Chapel Hill will be by far the most heavily impacted by those federal cuts. She said it has done good work preparing for the hits so far, but that it will need to remain flexible. Further cuts could still come, depending on what else the Trump administration or Congress decide to do.
“UNC-Chapel Hill in particular took very proactive steps to anticipate cuts in federal funding,” she said. “They obviously are the institution that receives the most federal research dollars … but again, budgets are just plans. They will have to continuously be adjusted as updated forecasts indicate circumstances are changing.”
The rapidly changing nature of college athletics also presents major financial considerations for nearly every public university in the state — including two schools with a “negative athletics fund balance” — according to a budget document prepared for Thursday’s meeting.
The board didn’t only discuss finances, however.
UNC System President Peter Hans also gave an update on new accreditation efforts.
The UNC System is leaving its current accrediting body to join with Florida, Texas, South Carolina, Tennessee and Georgia to form a new group. It’s the brain-child of Florida Gov. Ron DeSantis, a Republican and possible 2028 presidential candidate, who has said they’ll fight against perceived “woke” standards used by other accreditors.
Hans didn’t address concerns over wokeness Thursday, instead focusing on what he said will be “an accreditor laser focused on student outcomes” and with less bureaucratic red tape.
“This is what reform — national reform — of higher education looks like,” Hans told the BOG Thursday, drawing praise from Wendy Murphy, a former teacher and member of a prominent farming family who serves as chair of the Board of Governors.
“That’s certainly been a topic since I came on the board in 2017, so I’m excited to hear more about and see it come into fruition,” Murphy said.
Hans said in June, when the new partnership was made public, that “by creating an accreditor closely focused on the needs and responsibilities of public universities, we can help strengthen these vital institutions.”
Universities around the nation have faced political attacks from the right for years, with the most recent critiques focusing on pro-diversity efforts. On Thursday Hans said he hopes the new accredditing group helps rebuild public trust in higher education in North Carolina while also focusing schools on preparing students for the modern economy.
“Higher education is going to face some enormous challenges in the years to come” Hans told the Board of Governors, including “deep disruptions in the world of work and learning, and the need to maintain trust with a skeptical public. We need an accreditor who understands those challenges and is ready to work with us in meeting them.”
Poe Hall, Children’s hospital
State funding for universities in North Carolina is based partially on their enrollment numbers.
Nearly all are expected to have more students this year than last year. But because of the state legislature’s failure to pass a new budget, they may have to start the year operating under last year’s budgets.
However, a few universities are expecting their enrollments to drop this coming year: East Carolina, N.C. A&T and Winston-Salem State.
The lack of a new state budget has also injected uncertainty into the future of large capital projects — including a multi-billion-dollar plan to build a new children’s hospital co-led by UNC-Chapel Hill and Duke University, and plans to remediate Poe Hall at N.C. State University following cancer concerns there, which could cost upwards of $180 million, as well as smaller-scale projects on campuses across the state to spruce up dorms, libraries and other campus buildings.
On Thursday the board approved plans to fund some of the smaller projects, such as to repair leaking roofs or crumbling parking lots. But the larger projects will require the legislature to act first to appropriate the funds.
College athletics money
It’s not just the state legislature that has university leaders feeling uncertainty. A budget document prepared for the meeting reveals that the money brought in by college athletics remains a near-universal concern for the state’s public universities.
That budget document lists two or three top “areas to monitor” for each of the 16 UNC System schools. For 10 of the schools, one of those top concerns is “athletics financial stability.”
For two others — the state’s biggest athletic powerhouses, UNC and N.C. State — it’s a different concern, over the broader “evolving athletics landscape.” And other concerns for various schools are also listed, including lagging athletic ticket sales and donations. Other concerns, specifically for N.C. Central and Fayetteville State universities, include a “negative athletics fund balance.”
Haygood told the BOG on Thursday that Fayetteville State has already made some improvements and they’re hoping to see improvements out of Central soon, too.
Last month a federal judge approved a legal settlement that will forever change the landscape of college sports, WRAL reported, by putting up to $2.8 billion more into the hands of college athletes around the country. And it’s not just public schools reeling from the new reality. Wake Forest University Athletic Director John Currie told WRAL the new settlement is “perhaps the most significant thing in higher education” in the past 50 years.
However, much of the details of how to handle those payments will likely be left up to the leaders of the individual campuses, and not the Board of Governors who oversee the university system as a whole.
The state legislature could also give universities funds for some of those payments, from the state’s sports gambling revenues, if the new version budget is approved.
