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Considering the current UNC roster has 12 players from out of state, I would doubt that is true. However, if you are infering that UNC wants only players it has seen in person, that could be true. And the best place for those players to be seen by UNC coaches probably is in North Carolina itself.
Obviously this is not true. But it would be accurate to say that there are many good reasons why UNC should, and therefore does, recruit hard in state.

First of all, I am told there used to be some rule imposed on the team that they had to have a certain % of guys from in state, but I was further told that rule was lifted.

Even without it, though, it is a fact that a state-supported school can make its 11.7 go farther if it focuses on in-state players.

And it's not like they lack talent in the immediate area. UNC can do very well just by being the "dream school" for the Carolina player. And it's easier to be that, than to recruit all across the nation.

Though where they are now, they are obviously attracting talent from every corner of the U.S.
UNC recruits both in and out of the state of North Carolina, and a look at this year's roster will give you a sense of the usual proportion of in-state to out-of-state players.

I note, bhs, that you're from South Carolina. Two of next year's signed players hail from the Palmetto State, while 7 of the 12 are North Carolinians. The remaining 3 are from Connecticut, New Jersey, and Florida.

Here's a link to the official announcement of that NLI class:
Class of 2007-2008 Announcement

After you've read it, I'd suggest that you take the opportunity to look around the official website from which it's taken. Like other programs' sites, it'll tell you a lot about the program.

In addition to the "scholarship stretching" dynamic to which Midlo Dad correctly points in an earlier post, another factor that ends up affecting all of UNC's athletic programs to a certain extent is that admissions standards are generally higher for out-of-state students. Because the "bar" is generally higher, it stands to reason that fewer out-of-state players would make the roster.

If you or others have specific questions about the program or school, send me a private message; and, I'll do my best to help you with information.

Best of luck to you.
Last edited by Prepster

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