In his State of the University speech Oct. 1, UNC-Chapel Hill Chancellor James Moeser announced that the university would begin a new program designed to make it affordable for poorer people to send their children to Chapel Hill. Moeser’s “Carolina Covenant” would enable kids from families with incomes below 150 percent of the federal poverty level to attend UNC without having to borrow any money.
Instead of having to go into debt – that is, take out student loans – all a student would have to do would be to work 10 to 12 hours a week in a federal work-study job. In exchange, the covenant would cover all of his college costs. Sounds pretty nice.
Indeed, politicians and members of the education establishment immediately sang the praises of the covenant. Both Sens. Elizabeth Dole and John Edwards extolled it. Gov. Mike Easley said that it puts “the best interests of North Carolina students and their families first.” David Ward, president of the American Council on Education, called the program “bold and innovative.” Nothing but accolades.
Sorry, but color me skeptical about the need for the covenant. It seems to be another of those “feel good” measures so beloved of public officials, generating some good PR, but accomplishing nothing.
To start with, despite some small recent tuition increases, UNC is still one of the lowest-cost major state universities in the country. Taxpayers already cover a large percentage of the cost of attending Chapel Hill.
The cost to a North Carolina resident of a year at Chapel Hill is about $13,700, including tuition and fees, room and board, books, and supplies. For poor families, however, the university covers 86 percent of that with financial aid. All that remains is about $1,900. Some families can’t immediately afford that, but they do have some options.
One option is to borrow the money needed through student loans. Millions of families have done that. The debt is gradually paid off out of the earnings of the student after graduation. The earnings are presumably increased enough by the educational investment to make the debt manageable. There is no more reason to feel sorry for students paying off educational loans than there is to feel sorry for people paying off their mortgage or a business paying off a commercial loan to buy equipment.
But what if some poorer families are afraid of debt? UNC contends that the prospect of going into debt might scare families away from pursuing college. It’s hard to imagine that this happens very much, what with credit so widely used in our economy. To the slight extent that it does, however, a less-costly solution would be to counsel such families by showing them that students from families like theirs have successfully handled student loans.
Another option is for the student to work. Many students cover part of the cost of college through part-time jobs. By working about 12 or 13 hours per week at a common entry-level job, the student would have earned that $1,900. Yes, it would be nicer not to have to hold a job while in school, but it isn’t a terrible adversity.
Under the covenant, the student still has to do roughly the same amount of work, but in federal work-study jobs. Many of those jobs, students candidly admit, don’t entail very much work. A work-study library job, for instance, may be a good opportunity to get homework finished. The main effect, therefore, appears to be to shift covenant students out of more useful work in the free market and instead place them in the soft environment of the nonprofit sector.
UNC statistics show that 8 percent of its entering freshman class (281 students) comes from families that have incomes low enough to qualify for the covenant. What that proves is that a large number of poor families are currently able to afford UNC. They can combine student loans and work to pay the cost that remains. Why give them a free ride in hopes of attracting a few more students who might have been deterred from applying?
The Carolina Covenant is expected to cost about $1.38 million per year. There are certainly better uses for the funds than a program that treats the poor as though they’re so helpless that government must relieve them of the last small burden of sending a child to college.
George Leef is the director of the Pope Center for Higher Education Policy.