No-loan plan at Swarthmore

Swarthmore College will replace all student loans with scholarships in financial aid awards beginning next fall, the dean of admissions said yesterday.

Swarthmore's move will put the elite liberal arts college in Delaware County in a league with Harvard University, Princeton and a handful of other colleges and universities that also have replaced loans with grants for all students who qualify for financial aid.

Other colleges and universities in the area, including the University of Pennsylvania, are considering similar changes.

Tuition, room and board at Swarthmore is now $45,700, Jim Bock, the dean, said yesterday. The average aid award for students is $31,388.

About half of the school's 1,500 students receive need-based financial aid. Swarthmore has already replaced loans with grants for 250 whose families have incomes of $60,000 or less and pay $3,500 or less in tuition. Now, 500 more students from families with income as high as $180,000 stand to benefit from the new policy. The policy applies to current and future students, and will cost the college about $1.7 million a year, Bock said.

The college has not yet determined how it will make up that amount. He said its endowment was a healthy $1.5 billion.

The new policy "gives our graduates the opportunity to take an internship or go to Teach for America or to graduate school, to a social service project or the Peace Corps," Bock added. "It gives them opportunities that were only open to some students before this."

Students were elated at the announcement. "Holy moley, that's great," Swarthmore sophomore Nancy Chu said after learning that she wouldn't have college loans in her junior and senior years.

Chu, 19, from northern California, said her loans last year were just a few thousand dollars. She wasn't sure of the exact amount of her loans this school year.

"As a student it's definitely a load off my mind," said the English major, who expects to go to graduate school and take out more loans.

Jenna McCreery, 19, a sophomore from Tuscaloosa, Ala., said the grant program would help students like her who have the added burden of travel expenses. Her parents, she said, were thrilled with the news because she has two younger sisters also headed to college. One is waiting to hear from Davidson College, which is also a no-loan school.

"We're just so excited that Swarthmore is taking this step," said the linguistics major.

Yesterday's announcement is the continuation of a long-term trend, Bock said. Swarthmore limited loans to $1,000 for the lowest-income students starting in 1981 and eliminated them for the lowest-income students two years ago.

Students now receiving loans typically end up with about $15,100 in debt after four years, Bock said.

In addition to the financial benefit of the new policy for students and their families, Bock said, it makes it easier to impress upon potential applicants the idea that going to Swarthmore is financially within their reach. "There are a lot of people who should be looking at a place like Swarthmore but simply don't because of the perceived cost," he said. "This is a way of addressing that."

The Swarthmore decision was made before Harvard announced this week that it would replace all loans with grants and increase its financial aid to middle- and upper-middle-class students, Bock said. "It had nothing to do with that."

Princeton University in February 2001 became the first college nationally to offer a comprehensive no-loan policy for all those on financial aid, not just low-income students, said Cass Cliatt, director of media relations at Princeton.

University officials are pleased with the results.

"Our no-loan program absolutely has had an effect on the number of low-income students who enroll," Cliatt said. "Our low-income numbers are up around 100 students for the Class of 2011, or almost 114 percent.

"Low-income students made up about 8 percent of our class before we initiated our no-loan program to benefit this group, and, currently, low-income students make up about 15 percent of the most recently entered freshman class."

Low-income students are defined by the federal median income of families earning in the $53,000 range.

The University of Pennsylvania also has been looking at making changes in its financial-aid packages and could have an announcement as soon as next week, university spokesman Ron Ozio said. The Ivy League university already gives grants rather than loans to students from families with income below $60,000 to help cover the $46,124 cost of tuition, fees, and room and board.

President Amy Gutmann "wants to enhance it further," Ozio said.

At Haverford College, "our board is addressing that right now," said spokesman Chris Mills. "We want to make Haverford education as accessible as possible to as many as possible. . . . We expect to make an announcement shortly."

But most Pennsylvania schools would be hard-pressed to make such a move, said Don Francis, president of the Association of Independent Colleges and Universities of Pennsylvania, which counts more than 80 schools in its membership, including Swarthmore and Haverford.

"They already give out over $1.3 billion in institutional financial aid every year," he said. "If you were to do what Swarthmore is talking about doing, that would add another several hundred million dollars in total to those schools."

In 2005-06, 63 percent of need-based financial aid for students at the association's member institutions was in the form of grants from the schools, and 20 percent was in loans, Francis said. The rest came from state and federal grants and work study.

Francis said he was not aware of any other college in Pennsylvania taking such a step.

Several schools in the area, including Arcadia and Lehigh Universities, said yesterday they would stick with their current policies.

At Arcadia, 95 percent of the student body receives some type of university grant or scholarship, based on need or merit, said Lori Bauer, director of university relations.

"But we are not at this time looking to move to all grants to replace loans," she said.