UPDATED 12/08/14 3:45pm
The Board of Managers voted Saturday morning to modify the no loan financial aid policy and reintroduce loans for students with a family income above $60,000 a year, President Daniel H. Weiss announced in a campus-wide email.
The Board voted to accepted a modified loan policy put forward by senior staff which is projected to eliminate $820,000 a year in financial aid costs.
Senior staff and members of the Board have framed the decision as a reluctant one driven by financial pressure and the rising cost of education nation-wide. Saturday morning’s vote is perhaps no surprise, as discussion of the no loan policy has been ongoing since the policy’s original implementation five years ago. This weekend, the Board is not only discussing the no loan policy but also assessing the College’s short- and long-term budget outlook.
Student representatives from a group called Fords for Affordability presented to two Board committees late Friday afternoon, pitching an argument to maintain the policy and urging the Board to consider cuts elsewhere.
Weiss thanked the students after the meeting and in his email. He said the Board has asked the College to evaluate the feasibility of a loan forgiveness program, an idea originally pitched by students.
Text of the email is below:
I am writing to report that the Board of Managers decided at their meeting this morning to modify the no-loan component of our current financial aid policy:
- Haverford will remain need-blind in our admission process.
- Our neediest students and families – 40% of those who receive financial aid – will continue to have financial aid packages that do not include loans.
- Beginning with the class of 2019, students from families with income above $60,000/year will see their packages evaluated on a tiered basis, with a total, four-year loan expectation at graduation ranging from $6,000 to a maximum of $12,000.
- Current students will not be affected by this change, nor will students who are awaiting word on their application for admission to the Class of 2018. For them, all financial aid packages will maintain the no-loan component.
The Board has decided to modify the financial aid policy as part of our ongoing effort to balance an unwavering commitment to ensuring that a Haverford education remains affordable for all students and their families with our need to manage resources in a way that aligns with our commitments to academic excellence and financial sustainability.
These competing objectives have become increasingly difficult to achieve in an economic environment characterized by high levels of volatility in the financial markets and generally lower levels of endowment returns. Indeed, without the subsidy generated by returns on our endowment, annual charges for a Haverford education would be close to $90,000 per year.
In order to manage our resources carefully during this challenging period, we have had to reflect carefully on every spending category within our budget. In the past five years, faculty and staff salaries have not kept pace with inflation, we have reduced operating budgets in many areas (but not for academic and instructional programs), and we have sought to reduce annual tuition increases below historical levels, even while maintaining the no-loan policy, which was first implemented in 2009. During this period, financial aid expenditures have grown at two and a half times the rate of growth in student charges.
With this in mind, over a five-year period – and especially during strategic planning conversations of the past two years – we have engaged in a process of evaluation and reflection with respect to our financial aid policies. During this period, we have received input from students, staff, Board members, and alumni, including a 2012 plenary resolution endorsing both need-blind admissions and the no-loan policy. We have sought an approach to our financial aid policy that meets three objectives:
- Our financial aid program should support our mission of admitting the best students to Haverford, regardless of ability to pay, and making a Haverford education accessible and affordable to those students.
- Our program should minimize, to the extent we can afford to do so, Haverford students’ debt at graduation and be comparable to that for students at peer institutions.
- Our program should be financially sustainable given our resources, current obligations, strategic objectives, and in light of foreseeable economic conditions.
We believe that the model the Board approved this morning accomplishes these objectives. Haverford remains committed to admitting students who will most benefit from and contribute to this unique community of scholars and citizens, regardless of their ability to pay. We are pleased that so many share our goal of preserving a need-blind approach to the admission process. Similarly, we want to do all we can to unburden students of debt, not just because doing so will enhance their experience here and in the world into which they will graduate, but so that the world, in turn, may benefit from our students’ pursuit of careers of service that are often less remunerative. Such were our goals in 2008, and they remain so today. These modifications to our financial aid policy are a necessary step in ensuring that Haverford remains a world-class institution that offers an experience like no other, on behalf of students like none elsewhere – and will do so in perpetuity if we operate in ways that are fiscally sustainable.
It is worth noting that the financial challenges driving this modification are by no means unique to Haverford. Indeed, peers such as Williams and Dartmouth have likewise decided to modify their no-loan policies while others have stepped away from need-blind admission. And with the changes, Haverford remains one of only ten colleges that are need-blind in their admission process for US Citizens and permanent residents, meet the full demonstrated need of admitted students, and have some no-loan component in their financial aid packages. The others are: Amherst, Bowdoin, Claremont McKenna, Davidson, Pomona, Swarthmore, Vassar, Wellesley, and Williams.
In addition, the Board and administration commend the students, especially the student group Fords for Affordability, who have demonstrated a deep commitment to the no-loan policy and to ensuring that Haverford does all it can to remain affordable for all students. We will soon be reaching out to student leaders to discuss what we might do together to evaluate the feasibility of a loan forgiveness program, an idea that the Board has asked us to pursue.
In closing, I wish to thank the many students, faculty, staff members, alumni, and friends of the College who have participated in this important conversation. Haverford is stronger for your dedication. I look forward to continued collaboration as we move forward together.
Daniel H. Weiss