Grants will replace loans for some students, and federal loan amounts will be capped for all students beginning next year, university officials announced Thursday.
In a statement, the university said it would replace loans with grants for students of “greatest financial need,” and it would cap all Stafford or Perkins student loans, which are federally subsidized, at $20,000 over the course of four years of study.
The changes will apply retroactively to all enrolled students, not just incoming freshmen.
Associate Provost Michael Mills said the administration was very happy with the policy, and especially pleased that it differed from recent financial aid improvements like those at Harvard University and the University of Chicago, which have strict income cutoffs for aid.
“We like the fact that we made it need-based instead of income-triggered,” Mills said. “Other universities have made it up or down. At the University of Chicago, your family makes $60,000 or less, and you pay no loans; if your family makes $60,001, you pay loans.”
In December, Harvard University announced it was making undergraduate education free for all students with families earning less than $60,000 a year; students with families earning up to $180,000 a year would only have to pay 10 percent of their family income.
In the wake of Harvard’s announcement, many other universities have announced changes to their financial aid programs, including Yale University and Dartmouth College, to expand aid to middle-class students
NU’s announcement is more in line with other universities, which target to lower-income students.
In light of these other policies, Dr. Richard Vedder, director of the Center for College Affordability and Productivity, said he was not impressed with NU’s new policy.
“The word that comes to mind is tepid,” the NU alumnus (Weinberg ’62) said. “It was better than nothing, but compared to the other universities it really wasn’t that great.”
The comparatively small amount – $3 million – budgeted for this change indicated the lack of commitment to easing student debt burdens, he said.
“Given the last fiscal year’s increase in Northwestern’s endowment, which was about $180,000 an (undergraduate) student, they could say that no student would ever have to take out loans period and they would have the means to do it,” Vedder said.
Furthermore, the average amount of loans an NU student in need receives is $18,000, which is $2,000 less than the cap, according to the release that accompanied the announcement.
Weinberg senior Katie Coleman “isn’t exactly sure” of the amount of loans she took out, but she said it would be between $15,000 and $20,000.
“If the cap is $20,000, I’m not sure how effective at helping students it will be,” Coleman said.
Christine Liu, a McCormick sophomore with an expected $12,000 worth of loans over four years, said she feels the comparatively low amount of aid is indicative of a broader pattern.
“I think they should give more (money) if they have it,” Liu said. “I think that NU wants to keep its students at a certain upper-middle class level and that they’re keeping it so that those outside that group will have to pay more than they can afford.”
Mills, on the other hand, said he finds the whole perspective of the debate over loan funding somewhat disingenuous.
“I’m a little worried about this notion of loans as an evil thing,” Mills said. “The evil thing is if we have excessive amounts of student loans, and that’s what we’re trying to curb.”
Reach Michael Gsovski at [email protected].
