Following Princeton, Schools Switch to Grants

Since Princeton’s 2001 debut as the first private university to eliminate loans in favor of grants, many institutions have followed suit.

Although no other Ivy university has replicated Princeton’s move to completely eliminate loans in place of grants, in 2006, Columbia replaced loans with grants for families earning under $50,000 per year. Similar policies were enacted in 2005 by Dartmouth and University of Pennsylvania, which eliminated loans for families whose household income was less than $30,000 and $50,000, respectively.

With a current trend in independent colleges and universities transitioning from loans to grants for students whose annual household income is below $50,000, Wesleyan University is the most recent institution to jump on the financial aid bandwagon.

During his Nov. 2 inaugural speech, Wesleyan President Michael Roth announced, “Starting with the frosh class entering in 2008, we will significantly decrease student indebtedness and entirely eliminate required borrowing for our neediest students ... most students whose household income is under $40,000 will have Wesleyan grants instead of debt.”

Said Princeton University Director of Financial Aid Robin Moscato, “In 2001 we enacted a full ‘no-loan’ policy ... [because] undergraduate student debt was escalating.”

Along the same lines, Davidson College, Amherst College, and Williams College have in March, July, and November of 2007, respectively, announced a similar shift in policy to eliminate loans entirely from student financial aid packages.

“We try really hard to do what is right for our students,” Wesleyan University Director of Financial Aid Jennifer Lawton said.

There are two primary reasons to do away with loans, Moscato said—“To make sure education is available to students with a wide range of economic status and to make sure students are not overburdened with debt when they graduate.”

But such policies are currently impossible for other competitive universities with less substantial endowments to enact.

“We meet 100 percent of need.... The packages start with a campus job and student loan amount. The remaining need is guaranteed to be met with grants,” Director of Financial Aid at Vassar College Michael Fraher said.

According to the 2007 annual College Board survey of private colleges who provide aid packages, Columbia University provides $26,900 in average aid and $25,400 in average grants with 73 percent of applicants receiving this aid. Barnard provides $27,600 in average aid and $29,000 in average grants with 40 percent of applicants receiving this aid. Comparatively, 100 percent of students at Davidson College receive need-based grants, although the average grant at Davidson is $17,300.

Institutional grants have increased dramatically in the last decade. According to a report by the New York State Education Department, institutional grants given by private colleges and universities have risen from roughly $500 million in 1990 to $2 billion in 2003.