Princeton University takes a radical step: replacing student loans with grants
Princeton University undergraduates on financial aid will no longer have to borrow money to pay for college, university president Harold Shapiro announced last weekend.
The plan, which will allow many students on financial aid to graduate without any debt, was approved unanimously by the Board of Trustees as part of a $57 million increase in endowment-income spending. It will affect all undergraduate students at the university beginning this fall semester.
The school's "need-blind" admissions policies will be extended to international students for the first time under the plan. No undergraduate will be required to obtain a loan under the plan. Instead, aid packages will consist solely of grants that do not need to be repaid.
Undergraduates will still have to pay for part of their aid package from jobs during the school year and in the summer, but the size of those required contributions will be reduced.
Princeton, the first Ivy League school to announce that aid recipients will not be required to obtain student loans to pay for their education, is acting against a national trend in which loans make up an increasing portion of student aid packages.
Approximately 40 percent of Princeton's 4,600 undergraduates receive financial aid.
Princeton's 1,750 graduate students also will benefit from the beefed-up budget. A $4.2 million expanded fellowship program will provide all first-year doctoral students in engineering and other sciences with full tuition and a stipend to assist with living expenses. Doctoral students in the humanities and social sciences will receive $1.8 million worth of stipends for summer research.
"I think it's great. It's a long time in coming to give more money to graduate students," says Brian Steensland, a graduate student in the sociology department.
Mr. Shapiro, who leaves his job at the end of the academic year, said the new financial aid policies were made possible by a growing endowment - now at $8 billion - and the success of Princeton's annual giving program.
He added that he hopes other universities follow Princeton's lead.
"We want our competitors to see this," Shapiro says. "We want these initiatives to reach a larger group of families than just those of Princeton students."
University Provost Jeremiah Ostriker said that the plan will help attract students intimidated by the $33,613 cost of undergraduate tuition and room and board.
"We do fear that there are many students who don't apply, because they're not aware how much aid is available," Ostriker said. "They only see the sticker price of Princeton, which is very high."
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