The Class of 2012 will have it pretty good at some colleges and universities. No loans to repay after graduation.
In an attempt to combat the ever escalating price of higher education, some schools are replacing loans with grants in their financial aid packages. Locally, the University of Pennsylvania, Swarthmore College and Haverford College are forgoing loans for scholarships.
In a news release, Penn President Amy Gutmann said, “This is a transformative moment for higher education.
“No longer will students need to think twice about applying to Penn for fear that they will emerge with overwhelming debt,” Gutmann said.
Penn has the largest undergraduate enrollment of all the schools that are moving to grant policies in their financial aid programs.
Sources at Temple say that the change at other schools will not be coming here. Temple’s endowment isn’t as large as the schools going the loan-free route.
Beginning in September 2008, students at Penn with family incomes less than $100,000 will receive loan-free financial aid packages. Students from families whose income is above $100,000 will see a 10 percent reduction in need-based loans, according to a news release.
Eventually, all students who are eligible for financial aid will receive loan-free packages. The loan-free aid for all eligible students will begin in the fall of 2009.
The initiative will be largely
financed by Making History: The Campaign for Penn, a $3.5 billion fundraising endeavor. The five-year fundraising campaign includes a goal of $350 million for undergraduate financial aid endowment.
To fund its loan-free financial aid, Haverford College is looking to its students. The school is eliminating loans for incoming freshman and replacing them with grants. David Hoy, director of financial aid at Haverford, said that current students will be involved in the financial aid overhaul but how exactly hasn’t been decided.
The change in aid includes a new endowment fund, the Next Generation Fund. The fund will help pay for the extra aid given to students, Hoy said. The Next Generation Fund centers on the idea that Haverford students will contribute to the fund after they’ve graduated. Emerson said they will be giving back and helping future students. There is no set amount of how much students should contribute.
“Students will not be obligated to sign something. It is a moral obligation,” Hoy said.
“The Next Generation Fund will show how an individual’s actions can have a direct impact on our community. It will help ensure that others who follow enjoy the same privilege that we have enjoyed,” said Haverford President Stephen G. Emerson, who is also a Haverford graduate.
Previously, Haverford included up to $14,000 in student financial aid packages. The move to eliminate loans is part of the school’s 25 percent increase in financial aid commitment, according to a news release.
Hoy said that prospective students and their parents were very excited about the announcement.
At Swarthmore College, loan-free financial aid will be expanded from one-third to all students by the 2008-2009 academic year, according to Swarthmore’s financial aid Web site. The school has had a long standing tradition of its highest need students graduating with little debt. Often, their annual loans totaled about $1,000.
Even though loans are being removed from the financial aid program, parents will still be expected to contribute what they can. The financial aid Web site is still asking Swarthmore students to contribute earnings from campus and summer jobs for their education.
All previous loans for continuing students will still have to be paid back when they are out of school. Incoming students are receiving the benefit of a loan-free four years. Swarthmore does not want the burden of debt to influence student’s career or major choice, according to the financial aid Web site.
LeAnne Matlach can be reached at firstname.lastname@example.org.