In Feature

On her 100-day tour of the state last year, newcomer Margaret Spellings hung out in the cockpit of a training aircraft at Elizabeth City State University, wove a pine-needle basket at UNC Pembroke and cruised around the UNC Greensboro campus on a golf cart with Chancellor Frank Gilliam. The UNC System president delivered 17 dogwood trees to school leaders, enjoyed fireworks celebrating N.C. A&T State’s 125th birthday and listened to an oboe riff on Lady Gaga at North Carolina School of the Arts.

That was the fun part. Now, with a new strategic plan in place that will lift expectations for the system’s 17 institutions, Spellings’ job is about to get tougher. Her first year was a whirlwind of traveling, reorganizing staff and forging relationships with state legislators, administrators, faculty, students and alumni. It’s a formidable job that has been made more challenging by the extraordinary political divides and increasing tensions between rural communities clinging to fading economies and fast-growing metro areas luring the state’s best and brightest.

“It’s a big platform,” says Spellings, whose enthusiasm and good-humored style has drawn praise from state business and education leaders. “We have 17 outposts that are hugely valuable to the communities that they’re in, and regionally and nationally,” she says. “It’s an awesome task.” A Republican who over the years has taken stances that have roiled both arch-conservatives and liberals, the former U.S. secretary of education has brought a new perspective to a university system rooted in tradition but compelled to evolve amid the state’s rapid growth and increasingly diverse population.

Spellings came to North Carolina last March after three years leading the George W. Bush Presidential Center, a leadership institute and policy center based in Dallas. A senior adviser during Bush’s days as Texas governor, she became an assistant to the president for domestic policy, and later education secretary from 2005-09. She helped craft and promote No Child Left Behind, which aimed to improve K-12 education by holding schools more accountable for student outcomes. The program launched with bipartisan support, though it later became a punching bag for both tea-party conservatives who said it reflected excessive federal oversight of schools and Democratic-leaning teacher unions who criticized it for overemphasized testing.

As education secretary, she oversaw a nearly $70 million budget and more than 10,000 employees and contractors. Though that stage was much larger, Spellings now deals with bigger numbers: The UNC System spends more than $9 billion a year and has more than 60,000 employees. For the 2017-18 academic year, UNC is asking the state legislature to approve an operating budget of more than $2.76 billion, a slight increase over the current year. Tuition, grants and federal aid provide the balance.

“I always knew that North Carolina had this amazing history of inventing higher public education and investing heavily in this unique, system-wide platform,” Spellings says. What surprised her were the multiple layers of oversight surrounding the university system — in plainer speak, bureaucracy. “The way North Carolina governs things is interesting,” she says diplomatically. “There are a lot of players on the battlefield,” including the General Assembly, a large board of governors, and chancellors and trustees at each of the 17 institutions. “I think that can be a bit of a challenge in an environment like this,” she says. “The good of it is, there’s a lot of involvement and, theoretically, buy-in around decisions.”

While state lawmakers earlier this year passed a law to trim the 32-member board of governors to 28 this year and 24 in 2019, that’s still a lot compared with other systems. The University of Texas system has a nine-member board; Pennsylvania’s state system has 20. While slimming the board drew bipartisan support, some Democratic legislators questioned whether the current board — 20 of 32 members are white males — would become even less diverse. The board now has six women and four African-Americans, though five of the 17 institutions are historically black universities.

While Spellings supports the smaller board, she emphasizes that the quality of its members is more important than its size. “Whether a 28- or 24-member board, you can still accommodate diversity,” she says. “I think it can be a priority, and I think it should be a priority.” Having spent most of her life in Texas, where more than half the K-12 population is Hispanic, Spellings is sensitive to diversity issues. “You know, we don’t have any Hispanic representation on [the Board of Governors], and we’re becoming more and more of a Hispanic state,” she says. North Carolina’s population is expected to be 30% Hispanic by 2050, compared with 9.1% in 2015 and less than 2% in 1990, according to the N.C. FreeEnterprise Foundation, a Raleigh-based nonprofit research organization.

Spellings weighed in on the federal immigration debate in a February op-ed in The Washington Post, urging President Donald Trump to not deport students protected under the Deferred Action for Childhood Arrivals program. She tells the story of a straight-A student who moved to the U.S. from Latin America when she was 6 years old, grew up in Greensboro and now attends UNC Chapel Hill, paying out-of-state tuition. “[She] has never known any other home but this and wants to be a social worker or service-oriented person — to give back. If we can’t have compassion for those students, then shame on us. That’s just how I feel about it.”

Her support for a welcoming immigration policy extends beyond DACA. “I think it’s unwise for us, in an economic argument and just a competitiveness argument, to underinvest in our people. And other states will beat us at our game. Immigration is an asset. If you want to see what our future looks like without doing that, just look at Japan, look at Germany or some of these places where they have a social safety net they can’t sustain and support.”

• • •

Spellings, 59, was hired after the UNC Board of Governors decided to replace predecessor Tom Ross, putting her at the center of controversy before she arrived on Tar Heel soil. Ross’ supporters, including many friends developed over his decades of public service, were incensed at the ouster. Conservative lawmakers who applauded the change questioned former board Chairman John Fennebresque’s handling of the search process, citing a lack of transparency. Fennebresque says interference from lawmakers made the hiring more difficult.

Despite the rocky process, Spellings was a standout among the 10 finalists for the job, Fennebresque says. “She struck the entire committee as knowledgeable, inspired and passionate about education,” he says, and she showed more enthusiasm about the position as the process went on. “That enthusiasm was infectious. She is a clear thinker who did not grow up in the ranks of college and university bureaucracies.” Her connections to key U.S. education policymakers were a plus. Fennebresque resigned from the board three days after Spellings’ hiring amid calls from fellow members requesting his departure.

A year into her job, Spellings appears to have impressed her colleagues. In March, the Board of Governors awarded her a $90,000 bonus on top of her base salary of $775,000. As part of a five-year contract that expires in 2021, Spellings could earn as much as $125,000 in yearly incentives based on goals that will be adjusted annually. By comparison, Ross earned a salary of $600,000 in his last year as president.

“With all that has gone on, I feel like it’s been 10 years,” says board Chairman Lou Bissette, a lawyer and former Asheville mayor, referring to Spellings’ first year that was marked by protests surrounding her hiring, the House Bill 2 controversy and continued turmoil from the UNC Chapel Hill athletics scandal. “All of those things she has taken on and handled in a very sensitive way,” Bissette says.

With HB2, Spellings showed how to not get “caught up in the weeds,” says Paul Fulton, a former Sara Lee Corp. president who leads Higher Education Works, a Raleigh group that advocates for the UNC System. “She said the law was unenforceable, and there was nothing she could do about it. She made clear it was kind of silly,” he says.

“There was some initial pushback from faculty, but she’s worn extremely well,” Fulton says. “What I like is she isn’t afraid to make fun of herself, and she is smart as hell.”

Despite her lack of background in North Carolina politics or the inner workings of the UNC System, Bissette says Spellings’ experience equipped her to run a complex institution that has to satisfy a wide variety of constituents. “She is an unbelievably fun person to work with,” he says. Spellings’ tour of every UNC campus in 100 days was a stroke of genius, Bissette says. “People got to see her. Once you’ve seen her, you can’t help but like her.”

Before arriving in North Carolina, Spellings commissioned a study by Boston Consulting Group. Getting the ball rolling early allowed her to begin reorganizing and making new hires quickly, Bissette says. “It’s like coaching basketball in the ACC. Nobody is willing to wait five years for [the team] to start winning. People want instant gratification.”

The $1.1 million study, which was paid for with private funds raised by Spellings, was organized around five key priorities that became the basis for a new strategic plan for the system. To help develop and implement the plan, she hired Andrew Kelly as senior vice president for strategy and policy, a new position. Kelly was an executive at the American Enterprise Institute, a conservative Washington, D.C.-based think tank. After town-hall meetings on each campus and electronic surveys completed by faculty, staff and students, the Board of Governors unanimously approved the plan in January.

Spellings calls the plan clear, focused and concise. “It’s five major themes, not 500, with a measurable target.” Highlights include improving access and completion rates, limiting annual tuition hikes to no more than the increase in median family income and increasing the number of credentials awarded in job-creating sectors such as health sciences, K-12 education and STEM — science, technology, engineering and math. In addition to overall system goals, each campus will have its own set of targets.

Tracking those goals will require access to lots of information, and the UNC System’s data and management systems are antiquated compared with other states’, Spellings says. She is asking the legislature for about $28 million over the next two years to develop better systems. “We need to invest in that, especially if we’re going to hold ourselves accountable for meeting these goals.”

• • •

Born in Michigan, Spellings moved with her family to Houston when she was 7 years old. She earned a bachelor’s in political science from the University of Houston, a commuter school that historically has operated in the shadows of Texas A&M and the University of Texas. In her inaugural address in October, she spoke about how her middle-class family paid her college expenses without mortgaging their house or depleting savings. The oldest of four daughters, Spellings helped out by working part time at a local Handy Andy grocery store.

Nowadays, middle-class families often struggle to pay for their kids’ college education, and more and more jobs require at least some education past high school. “Our expectation [of students] needs to be not just get out of high school but to get 16 years of education, whether it’s a community college or a baccalaureate degree or a Ph.D,” Spellings says. School teachers trained in the system’s education programs need skills to teach rural, poor or non-English-speaking students to excel in postsecondary education, she says.

Beginning fall 2018, the new NC Promise program will offer $500-per-semester tuition for in-state students at three universities. Out-of-state students will pay $2,500 per semester at Elizabeth City State University, UNC Pembroke and Western Carolina University. Fees and room and board won’t be discounted. To make up for the lost tuition, the state will provide the schools about $50 million. The schools were chosen because each has room to grow and they are located near bordering states that compete for North Carolina students, Spellings says.

Scaled back from a controversial original plan that included Winston-Salem State and Fayetteville State universities, both historically black schools, NC Promise’s detractors fear it will cheapen the reputations of participating schools. One group that has criticized the program is the UNC Faculty Assembly, which represents the system’s 15,000 professors and faculty. Gabriel Lugo, the group’s chairman and a mathematics professor at UNC Wilmington, declined to comment for this story.

Spellings says the schools will benefit from the plan. “It’s back to this expectation. People will think, well, $500 a semester, that’s doable for me.” The low cost should boost applications, allowing the three schools to be more selective, she says.

North Carolina spends more on universities per student than virtually any other state, and Spellings is optimistic the system will remain a high priority. Two-thirds of voters favored a $2 billion bond package last year — $980 million will go to infrastructure improvements for the UNC System, while community colleges will receive $350 million.

“But on the downside, I think it’s easy to think it’s always been great, it’s gonna be great, and we don’t need to challenge ourselves.” Will lawmakers continue to make needed investments in the UNC System? “That remains to be seen. That’s my job. I certainly hope so,” she says. “And it’s not just the university, it’s the community-college system as well.”

Spellings could face more friction in the year ahead, when universities will be held accountable for meeting performance metrics outlined in the strategic plan. “I think her toughest task this year will be to implement the strategic plan and to be able to demonstrate to our constituencies that it’s working,” Bissette says. Selecting new chancellors, which can be a controversial task for system presidents, wasn’t a focus in her first year. Only one chancellor, East Carolina University’s Cecil Staton, joined the system in the last year, while a search is underway for a new leader at N.C. Central University in Durham.

“She’s set the table,” Bissette says. Now, North Carolinians, many passionate about their alma maters or state universities where they send their kids, will be looking to Spellings to uphold tradition while moving the system in new directions.

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