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Raleigh, N.C. — President Erskine Bowles announced Friday morning that he will retire as head of the 16-campus system by the end of this year, or as soon as a successor can be named.

"I know in my head that this is the right decision at the right time," Bowles told the UNC Board of Governors during its monthly meeting.

in January 2006, and he said Friday that he had always planned to stay in the position for no more than five years.

He called the university system "the best in the country" and said he is proud of its standing as he hands the reins off to a successor.

Before coming to UNC, Bowles worked as an investment banker in Charlotte, and he served as head of the Small Business Administration in Washington, D.C., and as chief of staff to former President Bill Clinton. He also ran unsuccessfully for the U.S. Senate, losing to Elizabeth Dole in 2002 and to Sen. Richard Burr in 2004.

Former UNC President William Friday said he regrets the Bowles won’t continue heading the university system.

"He brought very seasoned experience to the job," Friday said. "It’s a splendid example of a native son coming home to his native land to help the people of North Carolina."

When he took office, Bowles promised to work to keep tuition low. On Friday, the Board of Governors approved tuition increases that state lawmakers mandated last year to help balance the budget. Under the guidelines, each campus must raise tuition for the 2010-11 school year by the lesser of 8 percent or $200, and the extra money would go back to the state’s General Fund, not the schools.

The budget deficit also forced the UNC system to cut hundreds of jobs, and Bowles pushed for campuses to revamp their management structures after an independent consultant noted that administrative expenses were growing faster than academic spending at UNC-Chapel Hill.

Bowles’ tenure was also marked by scandal at several campuses. He replaced the chancellors at both Fayetteville State University and North Carolina A&T State University because of financial mismanagement, and last year, he called for the resignation of North Carolina State University Chancellor James Oblinger amid a federal investigation into the hiring and promotion of Mary Easley, the wife of former Gov. Mike Easley