A new policy released Monday from Davidson College in North Carolina will allow all students to graduate debt-free beginning in August 2007.

The policy eliminates loans from financial aid packages and replaces them with both grants and student employment.

Bill Giduz, director of communication at Davidson College, said too many students were choosing not to apply at Davidson because of the high cost of education.

"All they see is that Davidson costs $43,000 per year, so they don't even consider applying here," Giduz said. "With this policy, you don't have any debt, so there is no reason not to apply."

Giduz also said the board of trustees at Davidson has enough money to fund the program for the next four years. During that time, he said they plan to raise $70 million to create a permanent endowment for the program.

The board hopes to "make a Davidson education available to all students while increasing socio-economic diversity," Giduz added.

University of Wisconsin System spokesperson David Giroux said affordability has always been an issue for the UW schools despite the fact the UW System is already one of the most efficient in the nation.

"In Midwestern four-year research institutions, Wisconsin is ranked second out of 12 states in overall affordability," Giroux said.

Minnesota gained its first-place ranking using a high-cost, high-loan model, Giroux said. The state has raised tuition rates, he added, but raised financial aid investment at an even higher rate.

Susan Fischer, director of student financial services at UW, said she thinks the Davidson policy would be nearly impossible for the University of Wisconsin.

UW educates a drastically larger number of students than Davidson, which only has 1,700 students, so a policy conducive to Davidson is not necessarily plausible for UW, Fischer said.

"Davidson and Madison — it's like comparing apples to oranges," Fischer said.

But since 1988, UW's fast track program has provided money for 600 in-state undergraduates to get all of their need requirements met.

"[Fast track] contains a work component and a small loan," Fischer said. "A modest loan program is not a bad idea, because it allows you to invest in yourself."

Fischer also said she believes the students with the most need should be the first to get financial aid money. However, most aid money coming from the school is merit-based.

"I would like to see more need-based grants," Fischer said. "We are trying to fundraise; … today we have $5 million in need-based grants."

Fischer said according to various reports, some eighth-grade students already believe they will not be able to afford a Wisconsin education.

"We have to get the message out early, so students will apply themselves," Fischer said. "Why work hard in high school when you know that you can't afford college anyway?"

And according to Giroux, tuition rates could be lowered if students worked hard and prepared themselves for college.

"One of the things that will drive down the cost of higher education is if high school graduates come to college fully prepared," Giroux said.