The Struggle Over Loans

Recently two exclusive American colleges, Williams and Dartmouth, ended their short-lived policies of offering only grants for financial aid. So far the move back to student loans has ended with these schools but, according to an Associated Press article by Eric Gorski in USA Today, other colleges are feeling pressure to change some aspects of their financial aid generosity:

“We… have to remain accessible to the middle class, where we had under-representation and where there is so much talent,” Amherst President Anthony Marx said. “Maintaining a no-loan policy seems to help us make Amherst more accessible to the middle class and also eliminate the constraints of debt on those students’ career choices.”

Amherst is asking students on financial aid to contribute more of their summer earnings to their education — a step that’s anticipated at Swarthmore College and other schools.

Swarthmore announced earlier that was slashing its financial aid budget 2 percent. But as the article points out, many colleges can only dream of offering grant-only financial aid. Most schools simply don’t think they can afford such generosity. Between 30 and 40 colleges have replaced loans entirely with grants, though 54 schools have endowments over $1 billion. Many worry that colleges in tough financial times may give up on needy students and try to attract more people whose families can afford full tuition.

At least in a few places, however, students are hoping Dartmouth and Williams are anomalies, not part of a trend. The Cornell Daily Sun ran an editorial earlier this week urging the school to maintain its current financial aid policies:

Cornell was quick to jump on the “no loans” and “limited loans” financial aid bandwagon sweeping its peer institutions back in the days of double-digit endowment returns in 2007 and early 2008. However, we hope it steers clear of any current trend in which schools renege on their financial aid promises.

While universities may genuinely face difficulties in funding these initiatives, they have an obligation — as does the government and society — to make a college education accessible for students of all economic classes.

Daniel Luzer

Daniel Luzer is the news editor at Governing Magazine and former web editor of the Washington Monthly. Find him on Twitter: @Daniel_Luzer