In fall of 2004, the University of North Carolina-Chapel Hill joins the ranks of Harvard and Princeton Universities as it becomes the first public university in the country to implement an innovative student financial-aid program.

Under Chapel Hill’s program, beginning with 2004’s freshmen class, loans will be replaced with grants from qualifying students’ financial-aid packages. The students will be required to work 10 to 12 hours a week on the campus.

Chapel Hill’s financial-aid program is made possible partly through the state’s Constitution, which mandates that the state provide affordable education. The college currently uses grants and scholarships to cover 86 percent of the financial needs for students from low-income families. The new program will use funds from the Federal Work-Study program and institutional aid when it switches from loans to grants.

Shirley Ort, associate provost and director of scholarships and student aid for Chapel Hill, described how university officials wanted to send a clear signal about the predictability and availability of aid at Chapel Hill.

“We became concerned, given all of the national and local press on ‘spiraling tuition’ and ‘escalating college costs,’ that more and more students, particularly low-income students, may self-preclude from attending college,” said Ort, adding that students also were instead opting to attend cheaper community colleges.

Across a five-year period, tuition at UNC-Chapel Hill has risen 80 percent for in-state students and 38 percent for out-of-state students. For the 1999-’00 school year, in-state tuition was $2,262; out-of-state tuition was $11,428. For the 2003-’04 school year, in-state tuition totals $4,072, and out-of-state tuition is $15,920.

Ort said that had Chapel Hill’s program been in use for the 2003-’04 academic year, 281 students, or roughly 8 percent of the freshman class, would have qualified for financial aid. Of those students, more than half are minority students. Ort also expects to see a one to two percent increase yearly in the number of students who qualify.

Jacob O. Stampen, University of Wisconsin educational administration professor, said Chapel Hill’s financial-aid program reflects a change in thinking by both educators and state and might reverse the never-ending trend of higher tuition.

However, Stampen is skeptical of UW adopting a similar program anytime soon.

“Because of the negative interaction between the two ends of State Street, I doubt UW could sell an idea like this to the Legislature,” Stampen said.

Representative Mark Gundrum, R-New Berlin, also agrees that UW is unlikely to see a change in its financial-aid distribution.

“UW’s tuition is still low compared to most Big Ten universities,” Gundrum said. “Wisconsin residents are still getting a deal.”

Ort emphasized that UNC-Chapel Hill is not telling other universities what to do, but hopefully Chapel Hill’s example will provoke a healthy discussion about financial aid.

“We are experiencing wonderfully positive feedback, from our campus community, our state legislators, our alumni and the public at large,” Ort said.