Currently, about 39 percent of Wesleyan’s graduating class ventures out into the working world with an average tuition debt of $16,834. When President Michael Roth met with Dean of Admission and Financial Aid Nancy Meislahn earlier this semester to discuss financial aid, he felt this number was way too high.
“Originally we didn’t think we could eliminate loans for neediest students,” Roth said. “Then we decided it was worth it to find a way not to especially burden that group with loans. The amount we were asking students to borrow seemed very glaring to me.”
At his inauguration last Friday, Roth announced that starting with the class of 2012, first-year students whose total family income is less than $40,000 will receive grants instead of loans. Beginning with the same class, all other students who receive financial aid will graduate with a four-year total loan indebtedness reduced by an average of 35 percent.
The initiative will cost the University approximately $3.2 million annually.
“I think some people are surprised that we did this [so] quickly,” Roth said. “We will do more, I think, if we can show our supporters that we’re serious about the initiative and we’ve being careful with the money and creating educational innovations as well.”
According to Dean Meislahn, Roth made the announcement at the inauguration in an effort to garner as much media attention as possible. E-mail announcements were also sent out over the weekend to students applying to Wesleyan, high school guidance counselors, and the Wesleyan Alumni Admission Volunteers in order to better spread the word.
With the first Early Decision Application deadline looming on Nov. 15, the announcement is hopefully expected to have an impact on both the number of students who end up applying to Wesleyan Regular Decision by Jan. 1, and also those who decide to matriculate if accepted.
“We expect that some students who might not have applied will do so; we also anticipate that more students who are admitted and will say YES to WES because of the decreased loan burden,” Meislahn told The Argus in an email.
She also noted the potential benefits for attracting prospective students.
“The elimination of loans for the neediest and the reduction in loans for all should make Wesleyan aid packages more competitive and in that sense the recruitment easier,” she said.
Decreasing and eliminating loans is part of a larger national concern. While financial aid assists students whose families fall within the lower income bracket, middle-class students are increasingly caught in the middle.
Such is the case for students whose families make enough money to disqualify them from receiving federal grants, but not enough to afford the University’s total cost of $46,936 for first year students and sophomores, and $48,318 for juniors and seniors.
“I’m in the worst situation when it comes to Wesleyan’s system of financial aid,” said Jessica Jones ’08. “I come from a middle class family that’s getting increasingly upper middle class. That’s great for my parents of course… but contrary to the Financial Aid Office’s belief, if your parents fit a certain income bracket, it doesn’t mean they’re paying for your education.”
Jones applauded the University’s effort to help lowest-income students, but criticized Financial Aid’s approach to determining aid.
“[T]hey don’t work on a case-by-case basis like they say they do,” she said. “They draw a line at a certain income bracket and from there on up, it’s not very human-focused, it’s all number crunching. People at [Financial Aid] apologize to me when I explain my situation to them but their response is basically, ’sorry, that’s just how it works.’”
Replacing loans with grants may also help students at Wesleyan who are funding their education without any parental assistance.
“It may seem like at this school that everybody’s parents pay for their tuition, but there are a number of students who pay their tuition entirely on their own,” said Annalee Pratt ’08. “Wesleyan doesn’t take this circumstance into account. When I asked one of the [Financial Aid] staff about this, he basically told me that they couldn’t do anything about it and that essentially, parents were just expected to pay. That’s a nice optimistic outlook, but it’s very unrealistic.”
Currently, 40 percent of Wesleyan’s 2,900 students receive an average financial aid package of $27,151. 13 percent of Wesleyan students are also eligible for federal Pell grants, which are given to students demonstrating the highest levels of need.
Those who do graduate with loans usually pay them back on schedule. According to Director of Financial Aid Jennifer Lawton, the number of students who can’t make loan repayments on time is just below 0.7 percent, well below the national average.
Jones said that she currently has approximately $67,000 in private bank loans, with 8 to 9 percent monthly interest rates. She estimates she will pay about $550 a month in loan repayments when she graduates.
“I tried speaking with several [Financial Aid] officers about the fact that yes, my parents make ’x’ amount of money but I make practically nothing, and I am the one who will be taking out and paying for the loans,” she said. “But they say I have to be an ’independent,’ and that the process is so complicated, it would mean…lots of bureaucratic stuff.”
$10 million has already been raised to pay for the initiative. According to Roth, most donations have come from alumni and other donors Roth has met with this semester in visits to New York City, Chicago, Los Angeles, San Francisco, Philadelphia, Washington D.C. and Boston.
“I focus on two things when I travel,” Roth said. “Listening to what they value about Wesleyan and focusing on what can be improved.”
The initiative will also be partly funded by the projected $60 million to be added to the endowment in the next few years. Fundraising efforts will mostly be conducted through University Relations and the President.
The same day as Roth’s announcement, Williams College also announced that its Board of Trustees had approved an initiative to replace all student loans with grants in financial aid packages. The initiative will cost an annual $1.8 million, $1.4 million less annually than Wesleyan’s initiative. Williams currently has a $1.89 billion endowment, the second largest for a liberal arts college in the United States. Wesleyan’s endowment is currently approximately $619 million.
“Other financial aid students had been expected, depending on income, to borrow cumulatively over their four years $3,800, $7,800 or $13,800,” Williams President Morton Owen Schapiro released in a statement. “No more.”
Princeton University eliminated all loans in 2001, with Davidson College and Amherst College making similar announcements in the spring and summer this year respectively.
The other question, of course, is whether Wesleyan will ever have the financial resources to eliminate loans completely.
“It’s really hard to say at this point,” Lawton said. “We will need to raise significant endowment dollars in order for this to happen. We are just getting started, but there has been strong support for this initiative and I hope we’ll be able to revisit loan levels again soon.”
Meanwhile, students with high economic need will continue to pay their tuition through a variety of strategies: loans, fellowships, work-study, and just plain pinching pennies.
“I just wish they had implemented this change three years ago,” Pratt said.
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