News Release

CHAPEL HILL - The University of North Carolina at Chapel Hill is expanding its groundbreaking Carolina Covenant initiative to make a debt-free college education possible for more low-income students.

"These changes send an even stronger message about accessibility and the traditional commitment to opportunity in Chapel Hill for qualified students -- regardless of their ability to pay,"
Chancellor James Moeser said today in his annual State of the University speech.

"Our university is leading a true movement in American higher education," he said. "We hope our leadership in establishing the Carolina Covenant, and our increased commitment to the Covenant today, will challenge other universities to make similar investments to ensure affordability and access for deserving students."

Launched this fall, the Carolina Covenant covers 225 freshmen who can graduate without debt. Instead, they agree to work on campus 10 to 12 hours weekly in a federal work-study job, and Carolina meets the rest of their needs through a combination of federal, state, university and other privately funded grants and scholarships.

Now the university is increasing the financial eligibility requirements for the program to cover an estimated 120 new students. Starting next fall, students and their families must be at or below 200 percent of the federal poverty level -- up from 150 percent this year. That raises the threshold to cover a family of four with an annual income of about $37,000 or a single parent with a child who makes about $24,000. This year, those income levels were at about $28,000 and $18,000, respectively.

Carolina became the first major public U.S. university to announce plans for such a program last fall. Since then, several universities, including Virginia, Maryland, Nebraska, Harvard and Brown have created or announced plans for similar programs. Financial criteria vary by campus. Virginia, for example, uses the 150 percent poverty level standard

UNC-Chapel Hill consistently ranks among the national leaders in making education financially accessible to students. Carolina also meets the full need of middle-income students, with financial aid packages comprised of two-thirds grants and scholarships and one-third loans and work-study. (Most aid packages nationwide are closer to two-thirds loans and one-third grants.)

In recent years, when UNC has enacted a campus-based tuition increase, it has dedicated 35 percent of the revenue to aid for needy students, and every needy student received a grant to cover a campus-based tuition increase. The average cumulative indebtedness of a graduating senior who borrowed dropped from $13,700 in 2000 to $11,519 in 2003.

Moeser met with several of the new Carolina Covenant students and their parents over the summer as part of his "Carolina Connects" outreach visits across North Carolina.

"They are truly outstanding students who have impressed me with their academic credentials, their passions and their interests," he said. "More than half of them are first-generation college students. They came to us highly prepared, with an average 4.21 GPA and 1,209 SAT score."

The average annual income for a Carolina Covenant Scholar last year was $13,400, or $400 less than what North Carolinians pay to attend the university this year.

Since tuition accounts for only about a third of the total cost of attendance, the Carolina Covenant covers room and board, books and other related educational expenses.

Carolina’s initiative comes when the cost of college is rising steadily. Nationally, the average student loan debt doubled to about $17,000 in just a decade. Approximately one-fifth of the full-time students working log 35 or more hours a week. As a result, many low-income youth abandon plans for college - or drop out -- because the burden of that debt and workload is too much. Research also shows that low-income families need more information -- and greater predictability -- about the availability of financial aid.

The Carolina Covenant responds to such concerns. The university’s increased commitment to this program is made possible because of the university’s policies emphasizing need-based financial aid and strong state support in providing financial aid funding as the cost of education rises, Moeser said.

Private donors have committed nearly $2.7 million in private gifts for the Carolina Covenant. Donors include UNC Basketball Coach Roy Williams and his family. Williams endorsed the program in UNC’s 30-second half-time television spot airing during basketball and football games.

-30-

Carolina Covenant Web site: www.unc.edu/carolinacovenant/

Contacts: Mike McFarland, (919) 962-8593, or the News Services staff, (919) 962-209