EDITORIAL: Financial aid for the 21st century

The University won't be able to match Princeton's innovative plan targeting low-income families. If implemented, Princeton's new system will replace all student loans for families with incomes below $40,000 with no-strings-attached grants. Families earning $40,000 to $57,500 will see more scholarships and fewer loans. And the university will no longer factor in home equity in determining aid packages for families earning less than $90,000. All this is made possible by Princeton's hefty $4.8 billion endowment. The school puts an annual $24 million toward financial aid, 95 percent of which is covered by the endowment. Many higher eduction institutions -- including several Ivies -- are likely to follow Princeton's lead, resulting in increased competition among the nation's top schools. Unfortunately, Penn will not be among those revamping their financial aid systems. With only a $2.5 billion endowment and a much larger student body than that at Princeton, the University is only able to cover 4.6 percent of the $50 million it spends annually on financial aid with its endowment. Allocating any more would be financially unfeasible. The situation can be altered in the long term by working to increase Penn's endowment. This is among Board of Trustees Chairperson Roy Vagelos' top priorities, and he should continue his efforts in full force. But in the interim, the University should try to counteract the increased competition induced by the Princeton plan by focusing on expanding its recruitment efforts and boosting Penn's other attributes to attract prospective students. The University does have a lot to offer, including a strong financial aid program, which offers generous packages and allows some students to attend Penn for less than it would be to enroll in their state schools. And hopefully, the school will be able to expand current opportunities in the future.