The University of North Carolina at Chapel Hill unveiled a new financial aid plan earlier this month that will cover poor students’ need without loans, but officials say such a plan is not feasible for the University of Michigan at this time.

The Carolina Covenant — as the UNC financial aid initiative is called — aims to lift much of the financial burden of higher education from the shoulders of needy students and their families.

The Covenant pledges to cover 100 percent of the demonstrated need of these students — without the use of loans — provided the student works 10 to 12 hours a week in a work-study job.

The Covenant applies to students at or below 150 percent of the federal poverty level. A family of four at this level would have an annual income of about $28,000. Approximately 8 percent of next year’s freshman class — 281 students — will be eligible for the program, said Vince Amoroso, deputy director of financial aid and scholarships at UNC.

Amoroso said the Covenant is “an out-growth of the university’s desire (for) access to be available to any student who wants to attend,” and has the ability and academic record to succeed at UNC. The introduction of the Covenant has led to a flurry of interest in UNC’s financial aid program, said Mike McFarland, UNC spokesman.

Amoroso said his office has received “literally hundreds of inquiries” from parties across the country interested in the Covenant, including the University of Michigan and other public schools.

Pam Fowler, the director of the University financial aid office evaluated the feasibility of a Covenant-like plan for the University community.

The University currently has no loan-free plan for needy students like the Covenant.

Instead, it “(strives) to achieve a 65/35 ratio of gift aid to self help aid in the overall (financial aid) package,” Fowler said in a written statement.

Students normally receive 35 percent of their aid in loans or work-study programs.

The remaining 65 percent is drawn from grants available to students, which totaled over $85 million in the 2001-2002 academic year. Although Michigan does not guarantee 100 percent loan-free financial aid, Fowler said UNC accounts for only the direct cost of attendance — such as books, tuition and housing — when calculating financial aid.

In contrast, the University takes into consideration such factors as travel and miscellaneous expenses. This results in “a student at UNC (getting) only a little more grant aid than a student with the same family contribution at Michigan, because UNC does not include the miscellaneous costs that we include,” Fowler said.

Fowler said the Covenant will “reduce the total indebtedness” of needy students at UNC.

But in a phone interview, Fowler said a plan like the Carolina Covenant is not being considered at the University.

The higher amount of out-of-state students at the University — 32 percent compared to 17 percent at UNC — and the University’s higher tuition are two major reasons that such a plan is not financially viable at this time, she said, as both factors lead to higher financial aid needs, and a greater stress on resources.

In her statement, Fowler outlines the increases in financial aid funding that would be needed to implement a Covenant-like plan at the University.

Fowler said that while UNC estimates the total cost of their plan to be $1.38 million after four years, the University would require an additional $844,272 in grant funding this year alone.

Fowler said that the current state of the economy prevents these funds from being raised. She did not, however, rule out a Covenant-like plan for the future, “that mainly depends on the success of the upcoming capital drive during which we hope to raise funds for financial aid.”




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