Smith College to replace student loans with scholarships
NORTHAMPTON – Smith College became the last elite college to phase out loans under its undergraduate financial aid programs on Friday, replacing them with college grants.
Smith College announced on Friday that starting next fall, all students with need-based institutional aid – over 60% of students, the college said – will receive an increase in their grant from l ‘school. In addition to replacing loans with grants, the school will also award one-time ‘seed’ grants of $ 1,000 to incoming students whose family contributions are expected to be less than $ 7,000, and ‘seed grants’ of 2. $ 000 to seniors in transition to life after college. .
In a telephone interview on Friday, college president Kathleen McCartney said the increase in financial aid – an annual increase of $ 7 million, bringing college aid next year to more than $ 90 million. dollars – will be a game changer for students.
“They are going to be able to leave school without going into debt,” said McCartney. “And I think that means it will be easier for them to start a career, to go to college.”
McCartney added that black and Latino students tend to graduate with more student loan debt across the country and that offering these scholarships will allow the college to attract the best students of all income levels.
“I think this sends a powerful signal about our commitment to racial justice and fairness,” McCartney said.
The announcement came shortly after the college board voted on the change on Friday morning. McCartney said the vote caused the board to rise to applause, some like her having shed tears at the announcement.
The money for the new financial aid grants will come from returns on the school’s endowment, which McCartney said has reached $ 2.6 billion, as well as donations from the school’s alumni.
“With careful management of these resources and our returns on investment, we are able to do this,” she said.
Joanna May, the college’s vice president of enrollment, said that currently when students receive financial aid from the college, those funds are bundled with federal loans – or, for international students, loans from the college itself. . Now those students will receive scholarships instead, though they can still take out federal or private loans to cover any other costs they have left, May said.
In making the decision to eliminate loans from its financial aid programs, Smith joins Amherst College and a handful of elite institutions including Harvard University, Yale University and others who have taken action. similar.
In 2007, Amherst College announced it was replacing loans with scholarships. At the time, higher education officials applauded the move while noting that few institutions have the money to make this kind of commitment.
In 2006, Amherst College’s endowment was $ 1.15 billion. That figure is now $ 3.7 billion. Earlier this week, Amherst College announced it was increasing its spending on financial aid for those coming to school from low and middle income families.
In a letter to campus on Friday, McCartney noted that she was a first-generation student who was dependent on financial aid.
“Higher education should be a right, not a privilege,” she wrote. “For this reason, I couldn’t be more proud to share this great news with you.”
Dusty Christensen can be contacted at [email protected]