Princeton University's decision to end financial aid loan requirements remains a bold step that few, if any, other universities can match. And Penn, despite a recent donation that earmarked roughly $6 million for financial aid, is no different. "Essentially, the endowment we have for financial aid is lower per student than our peer institutions," Vice President for Finance and University Treasurer Craig Carnaroli said. Penn's endowment is one of the largest in the country, at roughly $3.2 billion, but it ranks among the lowest on a per student basis. Carnaroli also said that because Princeton has fewer programs and schools to fund than Penn, it comes more easily for Princeton to make such a drastic change in financial aid policy. "Princeton is in a unique situation with the size and focus of their school," Carnaroli explained. "Penn is just different." Last month, Princeton's Board of Trustees decided to eliminate all undergraduate student loans and replace them with grants and scholarships. Princeton, whose endowment was up 36 percent at the end of Fiscal Year 2000, was one of several institutions which cashed in on the technology stock boom of the late 1990s. Penn's endowment, on the other hand, was down 1.8 percent at the end of the same time period, though it had gained some of the loss back by the end of the first quarter of FY 2001. And Penn is not alone in its inability to match Princeton's new aid program. Jim Belvin, director of financial aid at Duke University, said that Duke has no plans to adopt the Princeton model in the near future. "I cannot imagine that we would be able to match that in any way, shape or form," Belvin said. Belvin went on to say that Princeton's decision challenged a long-standing "partnership" in which students, parents, universities and the government work together to help finance higher education. Like Princeton, Duke saw its endowment skyrocket last year, closing FY 2000 up 59 percent. Cornell University Financial Aid Director Thomas Keane agreed with Belvin's description of a partnership, saying that students get more out of an education if they have to work for it. "In addition to the academic investment, the financial investment makes [students] appreciate their education more," Keane commented. Last week, Princeton Director of Financial Aid Don Betterton said that ending loan requirements was not a competitive move but rather was an attempt at easing the burden on students. "This is the fourth year of changes that we've made to relieve the pressure [on students] that we felt was becoming too great," Betterton said. Officials from many of Princeton's peer institutions accepted Betterton's statement. University President Judith Rodin, for one, has said that such a move would help Princeton diversify their student body. According to Rebecca Dixon, associate provost of enrollment at Northwestern University, the Princeton decision will help draw students from diverse backgrounds -- particularly minority students -- to the school. "To the extent that there is a correlation between being disadvantaged and being a minority, costs would have been deterrent to these people," Dixon said. Keane offered a slightly different explanation of the dropping of loan requirements, saying that Princeton "certainly hopes" that their financial aid plan will cause admitted students to chose Princeton when it comes time to decide which school to attend. However, Keane did not seem worried about the effect that the new plan would have on Cornell's admissions. "[Princeton's changes in financial aid over the last five years] hasn't cut into our applicant pool, or our pool of students who say that they are going to come to Cornell," Keane said.
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