Columbia Trades Loans for Grants

<p>Financial Aid Policy Change Will Give Families Making
$50,000 or Less Relief From Debt</p>

<p>Emily Baneman and Kate Linthicum</p>

<p>Beginning with the 2007-2008 academic year, Columbia's Office of Financial Aid will issue grants instead of loans to all current and incoming Columbia College and Engineering students whose families earn less than $50,000 per year, the office announced publicly today.</p>

<p>Coming in the wake of recent financial aid policy changes enacted by the University of Pennsylvania, Harvard, and Stanford, the shift stands to affect about 14 percent of current students in the College and the Fu Foundation School of Engineering and Applied Sciences according to the financial aid office, as well as an uncertain proportion of the incoming class of 2011.</p>

<p>The new initiative is expected to cost the University $3.5 million per year, increasing the annual financial aid budget from $55 million to $58.5 million. Driven by current funds and future fundraisers, including a $4 billion capital campaign the University will launch publicly later this month, Columbia hopes to raise $425 million for financial aid endowment within the next five years.</p>

<p>University President Lee Bollinger applauded the initiative for reducing the importance of the bottom line in the decision-making of low-income applicants.</p>

<p>"We want a policy in our financial aid that will make young people's life choices as little affected by money as possible," he said.</p>

<p>Austin Quigley, Dean of Columbia College, stressed that the new policy was just the first step toward implementing a program that will eventually lessen the burden on all students. He also emphasized how the policy change would help diversify the undergraduate student body.</p>

<p>"The College's capacity to enroll a diverse student community is as vital to its future as to its past," he said in a written statement on Monday.</p>

<p>The announcement comes almost seven months after the student group Financial Aid Reform called for Columbia to enact far more ambitious changes: replacing all loans with grants, eliminating family contributions for low-income families, and increasing aid for international students. Yet Seth Flaxman, CC '07, who was elected Columbia College Student Council president after making financial aid the focal point of his campaign, said he was pleased that the University responded.</p>

<p>"This sounds extremely exciting," he said. And although he declined to discuss specifics before the announcement was officially made, Flaxman said, "I'm looking forward to reading through the details."</p>

<p>Although today's announcement marks a major change for Columbia, the revised policy remains more modest than those at schools such as Harvard and Princeton. In 2001, Princeton replaced loans with grants for all students. And in March of this year, Harvard announced that it would eliminate family contributions from all families earning less than $60,000 per year and reduce contributions from those earning between $60,000 and $80,000 per year.</p>

<p>Bollinger said he would like to enact more far-reaching changes, but that the University lacked the financial resources of some of its peer institutions; Columbia's endowment is $5 billion, while Princeton's and Harvard's are $10 billion and $25 billion respectively.</p>

<p>The University of Pennsylvania, whose $4.4 billion endowment is slightly smaller than Columbia's, enacted similar financial aid reforms in March. Penn announced that it would replace loans with grants for current and incoming students of families earning less than $50,000 per year.</p>

<p>"You always want to do more than you actually can," Bollinger said. "We could do so much more if we just had the resources."</p>

<p>Currently, 35 percent of Columbia's financial aid budget is provided by the endowment and 65 percent is provided by the University's annual operating budget. But some of Columbia's peers fund as much as 70 percent of their financial aid from their endowments, according to the financial aid office.</p>

<p>Although Columbia may offer less financial assistance to low-income students than other schools, Bollinger stressed that the University still boasts a very socioeconomically diverse student body.</p>

<p>"Among these institutions, Columbia's performance, who we admit, the diversity of our student body, and the inclusion of people from different parts of the socioeconomic spectrum is absolutely first rate, first rank," Bollinger said. The Office of Financial Aid emphasized that Columbia enrolls the highest percentage of students who receive Pell Grants in the Ivy League-grants only available to students whose families earn less than $40,000 per year.</p>