Penn keeps on following Harvard, announces new no-loan financial aid program

Colleges and Universities A-Z University of Pennsylvania
1

<p>This came in my e-mail from Gutmann earlier today.</p>

<p>Subject: Penn announces new no-loan financial aid program</p>

<p>Today we are announcing a far reaching new financial aid initiative that will eliminate loans for financially eligible undergraduate students regardless of family income, making it possible for students from a broad range of economic backgrounds to graduate debt-free.</p>

<p>Penn's new program is the latest step in our efforts to widen access for students from all economic backgrounds, by expanding our no-loan program from low and lower-middle income families to include middle and upper-middle income families.</p>

<p>This new program will begin in September 2008, and include all eligible undergraduates, not just entering freshmen. Effective that year, students with calculated family incomes under $100,000 will receive loan-free aid packages, while families above that level will receive a 10 percent reduction in need-based loans.</p>

<p>By fall 2009, all undergraduate students eligible for financial aid will receive loan-free aid packages, regardless of family income level.</p>

<p>This is a transformative moment for higher education and for Penn. Making a Penn education accessible to students from the broadest array of economic backgrounds possible is fundamental to our mission. Our nation's young scholars should not be deterred from pursuing their dreams for fear of being a financial burden to their families.</p>

<p>We began our commitment to increasing access by addressing the needs of low income and lower middle-income families. We are now responding to the needs of middle and upper middle-income families, who have carried the greatest debt burden. We are sending a clear message to them that Penn is committed to supporting them as they seek to provide the best educational opportunities for their children.</p>

<p>We proudly join with a handful of other selective colleges and universities in eliminating loans from financial aid packages and, of those, we have the largest undergraduate enrollment.</p>

<p>We are fortunate to be launching our new initiative just months after announcing the Campaign for Penn, which has set a $350 million goal for undergraduate financial aid endowment that will be used to finance this new program.</p>

<p>This new initiative expands our long-standing commitment to need-blind admissions, which means students are accepted based on academic achievement, regardless of their ability to pay. Fewer than 50 private institutions across the nation have need-blind admissions policies and even fewer have financial aid based exclusively on need.</p>

<p>I also want to take this moment to thank each and every member of our extended Penn family for everything you do to help make Penn the place where revolutionary ideas, passionate people, and practical pursuits come together to make the most positive difference in our world. Happy Holidays!</p>

<p>You can find more information about this new program at: Penn:</a> Office of University Communications</p>

2

<p>Full news release:</p>

<p>
[quote]
Penn Expands Financial Aid Program to Eliminate Loans
December 17, 2007 </p>

<p>PHILADELPHIA -- The University of Pennsylvania today announced a far-reaching new financial aid initiative that will eliminate loans for financially eligible undergraduate students regardless of family income, making it possible for students from a broad range of economic backgrounds to graduate debt-free.</p>

<p>The new program is the latest step in Penn’s effort to widen access for students from all economic backgrounds, expanding its no loan program beyond low and lower-middle income families to include middle and upper-middle income families. Currently, one-half of the approximately 4,000 Penn undergraduates who receive aid have a loan as part of their need-based financial aid package. The new initiative will substitute grants for loans for all Penn undergraduate students who are eligible for financial aid. </p>

<p>“This is a transformative moment for higher education and for Penn,” said Penn President Amy Gutmann. “Making a Penn education accessible to exceptionally talented students from the broadest array of economic backgrounds possible is fundamental to our mission. No longer will students need to think twice about applying to Penn for fear that they will emerge with overwhelming debt. This represents a tremendous commitment—and enormous investment—on Penn’s part to increasing access for thousands of students. Talented, hardworking young people should not be deterred from pursuing their dreams for fear of being a financial burden to their families.”</p>

<p>The new Penn program will be phased in beginning September 2008, and will include all eligible undergraduates, not just entering freshmen. Effective that year, students with calculated family incomes under $100,000 will receive loan-free aid packages, while families above that level will receive a 10 percent reduction in need-based loans.</p>

<p>By fall 2009, all undergraduate students eligible for financial aid will receive loan-free aid packages, regardless of family income level.</p>

<p>“We have previously addressed the needs of low income and lower middle income families, but now must respond to the needs of our middle and upper middle income families, who are facing the highest levels of debt,” Gutmann said. “We want to send a clear message to them that Penn is committed to supporting them as they seek to provide the best educational opportunities for their children.”</p>

<p>Gutmann said the new initiative will be financed in large part from funds raised by Making History, The Campaign for Penn, the University’s five-year, $3.5 billion fundraising campaign, which includes a $350 million goal for undergraduate financial aid endowment. </p>

<p>Penn currently spends more than $90 million per year of its resources for grant aid to undergraduate students. When the new initiative is fully implemented, that figure will increase more than 20 percent, to more than $110 million.</p>

<p>“For many years, the Trustees have made the affordability of a Penn education a high institutional priority. The total elimination of student loans as part of our aid package is a critical next step in that process. We are pleased to join President Gutmann in supporting this important new program,” said James Riepe, chairman of Penn’s Board of Trustees. “The Trustees are committed to the funding of this initiative and are excited about the impact it will have on thousands of our students. This is a proud moment in our institution’s 267-year history.”</p>

<p>Of the handful of other colleges and universities that have adopted no-loan policies in their financial aid packages, Penn has the largest undergraduate enrollment (10,160).</p>

<p>Since 2003, Penn’s undergraduate financial aid endowment has more than doubled. Endowment income, however, can fund only 17 percent of the cost of the current aid program. The balance of financial aid funding comes from the University’s unrestricted operating budget. Both undergraduate and graduate financial aid are priorities for the University’s Making History capital campaign.</p>

<p>The new initiative expands Penn’s long-standing commitment to its need-blind admissions policy, which means students are accepted based on academic achievement, regardless of their ability to pay. Penn guarantees that any accepted student who matriculates with demonstrated financial need will receive a financial-aid package that meets the full extent of the student’s need for a full four years. Fewer than 50 private institutions across the nation have need-blind admissions policies and even fewer have financial aid based exclusively on need. Penn does not offer athletic or merit scholarships. Forty percent of Penn’s undergraduate students receive need-based financial aid from the University. </p>

<p>Penn also has recently launched a new outreach program targeting hundreds of schools and thousands of students from low and middle-income families -- who might never have considered applying to Penn -- to let them know that if they are accepted to Penn, they will receive a financial aid package with no loans. Penn is already seeing success in its efforts to improve access for lower income families, with a doubling of admitted high-need students with loan-free aid packages in the last year.

[/quote]
</p>

<p>Penn:</a> Office of University Communications: Penn Expands Financial Aid Program to Eliminate Loans</p>

<p>Of course, Albert, Penn doesn't follow Harvard in everything. It didn't follow Harvard's lead in eliminating its early admissions program, unlike a certain other Ivy in a neighboring state. :)</p>

3

<p>I expected this news today. After I was accepted on Friday, my regional rep called me and asked me about financial aid. He hinted that Penn would be able to make a better package offer next week. Now I know why.</p>

4

<p>is trailing in fifth out of several hundred(or thousand?) so bad?</p>

5

<p>Actually, Harvard followed Princeton's lead in the no-loan policy--however, for schools with the money to do so, these no-loan policies are wonderful, so I don't think it matters who followed whom.</p>

6

<p>It would be nice if Penn put a bit of money into fixing the decrepit urban infrastructure (the huge potholes, completely crumbled curbs from 38th st on come to mind) before pursuing an exercise in futility at out-spending Harvard (which, for perspective, has annual endowment RETURNS the size of our entire endowment)</p>

7

<p>i dunno, it seems to me that eliminating loans in financial aid ranks a little above fixing a couple potholes in terms of the long-term benefit it provides students, nevermind that those things are public property issues that the city, not Penn, is supposed to take care of.</p>

8

<p>also the whole discussion about who did it first seems rather silly, and I hardly think it's something harvard should be praised for. As has been pointed out, they have an absurd amount of money; the right thing for them to do would be to cease charging tuition all together, a move they have more than the means to do.</p>

9

<p>Are they going to be reevaluating aid packages for class of 2012 EDers?</p>

10

<p>did you not read the statement?</p>

11

<p>I did, but since we received financial aid offers when accepted, I was just wondering if we just ignore that or what. It just seems strange that they would send out offers (mine is completely loan-based) if they were planning this for this year.</p>

12

<p>if your package is entirely loan-based in its current form, most likely you only qualify for the 10% loan reduction for your first year anyway</p>

13

<p>While this is a great move for Penn, unfortunately the financial aid program at Penn still won't be nearly as generous as Harvard's (or, presumably, Yale's to-be-announced) program. </p>

<p>Penn's aid budget will be about $110,000,000, spread over about 10,000 undergraduates. </p>

<p>Harvard's aid budget will be about $120,000,000, but spread over only 6,500 undergraduates.</p>

14

<p>Given that undergraduates seem to be on a steady trend of becoming a net drain on university finances rather than gains, why doesn't Penn trim its undergraduate enrollment a bit?</p>

<p>It solves the housing crunch AND lowers the acceptance rate ;)</p>

15

<p>

True. But Penn's endowment is only $6.6 billion compared to Harvard's $34.9 billion. You gotta play the hand you're dealt and, looking at it that way, Penn's making a pretty big play here! :)</p>

16

<p>Yes, I agree. 20% is a significant aid jump. It's also a good PR move for them.</p>