Financial aid program expands under Moeser
By: Katie Hoffman, Senior Writer
Issue date: 4/24/08 Section: University
When Caitlin Shaw was accepted to UNC in 2004, she had one reservation - the price tag.
"I thought, 'Oh, that would be great to go there, but look at the price.'"
A few weeks later she got a packet in the mail saying she could be part of the Carolina Covenant - a new program that bundled federal, state, institutional and private funds to allow students from low-income families to graduate debt-free.
"It took me a while to realize they weren't joking," she said of the promise of no loans.
They weren't kidding.
This May, Shaw will be part of the first class of Covenant scholars to graduate from UNC.
The project was one of the largest of Chancellor James Moeser's term - almost doubling the number of students served and sparking more than 80 similar programs at universities across the country since its inception.
"We've become the gold standard for need-based scholarships," Moeser said.
When the chancellor leaves office in July, his successor will have to sustain that standard amid changing demographics and funding.
'We got lucky'
In need of more money to kick off the Covenant, its founders took a bet when it started - that state funding for financial aid would continue to increase. They were right.
When the program started in 2004, Covenant funding was composed of 15 percent state funds and 50 percent federal funds.
State funding for need-based aid continued on its upward path - increasing more than 800 percent for the past seven years. It is now 25 percent of the program's funding.
"We got lucky because we read the tea leaves correctly with what was likely to happen with public funding," said Shirley Ort, associate provost and director for scholarships and student aid, who is widely credited for the Covenant's start.
It was the increase that let the program succeed, she said. She even originally called it the Carolina Compact because she was unsure of the legal implications of the word covenant.
It was Moeser, she said, who insisted on coining the program as it is - making it a clearer, stronger promise to low-income families.
"I was delighted because I never thought it would get past the attorneys," Ort said.
But as more low-income students apply to college, it could put pressure on the program.
The number of Carolina Covenant scholars increased to 413 in 2006 from 224 in 2004.
Part of that increase stems from UNC widening the program's eligibility. In 2004 students whose families lived at 150 percent of the poverty line qualified, but in 2005 that threshold was raised to 200 percent. The total number of Covenant scholars in 2005 was 352.
Combined with the growing numbers of Covenant scholars, state financial aid is leveling off.
"We would all be happy if they just don't cut them," Ort said, noting that she does not expect the state legislature to do so.
To counter any possible shift in government money, UNC has focused on raising private funds.
The University reached its goal last year of $10 million in private funds and has launched another campaign to double that.
Much of the institutional - money from areas such as trademark and licensing - and private funds sit in an endowment as reserves.
"We've been serious about raising endowment money … to make sure the Covenant is on solid footing," Moeser said.
'More than just the money'
As more students have entered UNC as Covenant scholars, the program also has increased its support services.
"Now they have a community, and it's so easy to network with Covenant scholars," Shaw said. "Everything that I would have changed they're working on now."
The program now includes a peer mentoring system and a special orientation at C-TOPS.
Ort said these programs help take down some of the barriers to success.
"We know from a lot of studies that it's more than just the money," she said.
To further improve the program, UNC hired Research Triangle Institute in March to complete a study about the Covenant. The report should be finished in about a year.
The report will look at how the Covenant can do more to encourage and enable low-income people to apply to UNC, Ort said.
"Typically those families that most need to understand that there's money there for them are least likely to know it's there," Ort said.
Now that the first class is graduating, the RTI also can compare graduation rates of Covenant scholars against a cohort of 2003 students from low-income families.
Shaw said it has been exciting to watch the Covenant transition to a more comprehensive, inclusive program.
"Every day I come to school, and it's not just coming to school. It's a gift that Carolina gave me."
Contact the University Editor at udesk@unc.edu.
"I thought, 'Oh, that would be great to go there, but look at the price.'"
A few weeks later she got a packet in the mail saying she could be part of the Carolina Covenant - a new program that bundled federal, state, institutional and private funds to allow students from low-income families to graduate debt-free.
"It took me a while to realize they weren't joking," she said of the promise of no loans.
They weren't kidding.
This May, Shaw will be part of the first class of Covenant scholars to graduate from UNC.
The project was one of the largest of Chancellor James Moeser's term - almost doubling the number of students served and sparking more than 80 similar programs at universities across the country since its inception.
"We've become the gold standard for need-based scholarships," Moeser said.
When the chancellor leaves office in July, his successor will have to sustain that standard amid changing demographics and funding.
'We got lucky'
In need of more money to kick off the Covenant, its founders took a bet when it started - that state funding for financial aid would continue to increase. They were right.
When the program started in 2004, Covenant funding was composed of 15 percent state funds and 50 percent federal funds.
State funding for need-based aid continued on its upward path - increasing more than 800 percent for the past seven years. It is now 25 percent of the program's funding.
"We got lucky because we read the tea leaves correctly with what was likely to happen with public funding," said Shirley Ort, associate provost and director for scholarships and student aid, who is widely credited for the Covenant's start.
It was the increase that let the program succeed, she said. She even originally called it the Carolina Compact because she was unsure of the legal implications of the word covenant.
It was Moeser, she said, who insisted on coining the program as it is - making it a clearer, stronger promise to low-income families.
"I was delighted because I never thought it would get past the attorneys," Ort said.
But as more low-income students apply to college, it could put pressure on the program.
The number of Carolina Covenant scholars increased to 413 in 2006 from 224 in 2004.
Part of that increase stems from UNC widening the program's eligibility. In 2004 students whose families lived at 150 percent of the poverty line qualified, but in 2005 that threshold was raised to 200 percent. The total number of Covenant scholars in 2005 was 352.
Combined with the growing numbers of Covenant scholars, state financial aid is leveling off.
"We would all be happy if they just don't cut them," Ort said, noting that she does not expect the state legislature to do so.
To counter any possible shift in government money, UNC has focused on raising private funds.
The University reached its goal last year of $10 million in private funds and has launched another campaign to double that.
Much of the institutional - money from areas such as trademark and licensing - and private funds sit in an endowment as reserves.
"We've been serious about raising endowment money … to make sure the Covenant is on solid footing," Moeser said.
'More than just the money'
As more students have entered UNC as Covenant scholars, the program also has increased its support services.
"Now they have a community, and it's so easy to network with Covenant scholars," Shaw said. "Everything that I would have changed they're working on now."
The program now includes a peer mentoring system and a special orientation at C-TOPS.
Ort said these programs help take down some of the barriers to success.
"We know from a lot of studies that it's more than just the money," she said.
To further improve the program, UNC hired Research Triangle Institute in March to complete a study about the Covenant. The report should be finished in about a year.
The report will look at how the Covenant can do more to encourage and enable low-income people to apply to UNC, Ort said.
"Typically those families that most need to understand that there's money there for them are least likely to know it's there," Ort said.
Now that the first class is graduating, the RTI also can compare graduation rates of Covenant scholars against a cohort of 2003 students from low-income families.
Shaw said it has been exciting to watch the Covenant transition to a more comprehensive, inclusive program.
"Every day I come to school, and it's not just coming to school. It's a gift that Carolina gave me."
Contact the University Editor at udesk@unc.edu.
Viewing Comments 1 - 2 of 2
Marvin L Foushee
posted 4/24/08 @ 8:30 PM EST
If a student has a family income below $60,000, their family's economic circumstances pretty much get their sibling a full scholarship at a lot of the major colleges: Under 100 thousand would get the student scholar free tuition. (Continued…)
Marvin L Foushee
posted 4/24/08 @ 9:08 PM EST
A nonprofit organization should spend about 50 percent of it investment returns for the purpose for which is was endowed. If the purpose of the nonprofit organization is mission critical, the organization should spend 80-100 percent of it investment returns when the endowment reaches a certain level of financial security. (Continued…)
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