Williams latest to replace loans

After dealing with GREs and job recruiters, students who graduate from Williams College will now have one less post-graduation concern.

Williams, one of the top liberal-arts colleges in the country, announced earlier this month that it is replacing all loans with grants for students applying for financial aid.

The school joins a number of elite liberal-arts schools who have taken the same step in their financial-aid policies. The move also reflects a growing trend of schools using attractive financial aid packages to compete with peer institutions for a diverse social-economic student population.

Paul Boyer, director of financial aid at Williams, explained that the decision was influenced by a peer institution, Amherst College, which also announced a similar loan-free policy for all students earlier this fall.

Penn's financial aid office currently offers no-loan financial aid packages to undergraduate students whose families earn less than $60,000 a year, but Director of Financial Aid Bill Schilling said the University has no plans to extend the offer to all students.

Penn's current policy is similar to other Ivy League schools. Columbia University, for example, offers no-loan packages for incomes up to $50,000, while Harvard and Yale universities have both eliminated parent contributions for low-income families.

Princeton University has eliminated loans from its packages for all students since 2001.

Schilling and other financial-aid directors said schools shape their aid policies partially to stay competitive with peer institutions.

"A lot of selective schools want to attract an economically diverse study body, and addressing the aid package is one way to do that," Schilling said.

A school's ability to eliminate loans for all students largely depends on a school's per-capita endowment, a category in which Penn has long been at the bottom of the Ivy League.

But according to Schilling, only a few schools have the endowments necessary to make changes similar in scope to Williams' new policy.

Schilling said the University might consider expanding its no-loan program, but will not be sure until March when the tuition increase and any endowment growth are known.

Expanding the no-loan program would also involve utilizing general-operating funds, Schilling said.

In the end, says Ashley Griffith, admissions counselor at Davidson College, each institution has its own priorities.

"It's what they want to focus on: recruiting students from diverse social economic backgrounds or focus on academic programs might funnel money into another program," Griffith said.

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