In December, senior staff will give a PowerPoint presentation to the faculty and hold an open meeting for students on possible changes to the no loan financial aid policy, which could be eliminated entirely or altered to reintroduce loans for some students.
While the agenda for the next meeting of the Board of Managers has not been set, President Daniel Weiss said in an interview last Friday that it’s likely they will take up the issue and make a final decision at their February meeting.
Since the policy’s introduction starting the 2008-2009 fiscal year, the College has continued to debate the overall cost of the no loan policy, a question which became more acute in 2008 during a global recession which caused the College’s endowment to lose nearly one third of its value.
As administrators have framed it, that loss to the endowment and the rising cost of providing financial aid overall suggests the policy will be difficult to sustain in the near- and long-term.
The no loan policy eliminates loan expectations from financial aid packages, meaning that rather than asking students to take out loans, the college replaces that expectation with grant aid. According to the College’s financial aid webpage, the standard loan expectation in years prior to the no loan policy’s implementation was “$3,350 for the second year, and $4,200 per year for the third and fourth years.”
According to the 2012-2013 Haverford College Factbook, the College awarded $22.8 million in grants last year, or 84% of total aid administered.
Last year, 50 percent of first-year aid applicants received College grant aid, with the average grant around $36,025, according to the Factbook.
Weiss framed the debate as seeking a balance between three issues: affordability for students, maintaining the college’s competitive edge over peer institutions and the financial cost of the program itself.
The College could choose to eliminate the no loan policy and reintroduce loans for all students, or implement an income-contingent policy that would continue replacing loan expectations with grants for students below a certain income threshold.
A number of other peer institutions have ended their no loan policies. Claremont McKenna College announced it would reintroduce loans earlier this year, after implementing the policy in 2008. Williams College announced it would pull the plug on their no loan policy in 2010, after only two years of implementation. Last year, Businessweek reported that larger institutions are starting to scale back their aid despite recovering endowments.
While senior staff have had several discussions about the no loan policy over the past two years, including during Joanne Creighton’s time as interim president, Weiss said senior staff have not yet come to a consensus on the policy and what recommendation they will ultimately give to the Board.
That recommendation will likely be delivered to the Board in February.
The Clerk is seeking input from students, faculty, staff and alumni on the no loan policy. How has the policy impacted your Haverford experience? What decision do you think the Board should make in February? Send your responses to firstname.lastname@example.org or contact the author of this article at email@example.com.