DURHAM, N.C. — Duke University on Saturday became the latest elite college to announce a major boost in financial aid. But like even some of its wealthiest peers, it isn’t going so far as to guarantee all its students will graduate debt-free.
Instead, Duke — which has a list price of more than $45,000 per year — said it would stop requiring any parental contributions from families earning under $60,000. Students from families earning less than $40,000 will get a full ride, without being asked to take out any loans.
But while better-off students won’t have to borrow as much as before, Duke will still ask them to take out some loans. That differs from new policies announced by a handful of prominent colleges recently, including Princeton, Davidson, Amherst and Williams — all of which have replaced loans entirely with grants that don’t have to be repaid.
Duke says even with a $5.9 billion endowment, it doesn’t have as much to spend per student on financial aid as the schools that have eliminated loans. But even some schools with much bigger endowments than Duke, including Harvard, Yale and Stanford, still ask students to borrow. They argue a degree from an elite school is worth so much over a graduate’s lifetime that a small loan is a reasonable investment to require.
“In my judgment it is not inappropriate to students to consider helping support their cost of attendance,” said Duke financial aid director Jim Belvin. “What we want to do is lower that burden on students.”
Duke officials say that as they debated how to cut Duke’s expanding financial aid pie, they decided to lower the maximum students have to borrow, but to channel much of the break to parents, since it’s students who benefit most directly from the degree.
“We’ve done away with the parental contribution for what amounts to half the population, the bottom half of median income in America,” Duke President Richard Brodhead said in a telephone interview.
Duke’s announcement is the latest in a string by prominent schools which, even as their list prices skyrocket, are competing to offer better and better deals to low-income students. As a group, elite campuses have faced criticism for their lack of economic diversity.
The Institute for College Access and Success, an independent nonprofit group, has identified 31 schools that, like Duke, have taken steps to limit graduates’ debt burdens. But with a handful of exceptions, most colleges have been unable or unwilling to eliminate loans entirely.
In 2001, Princeton became the first to eliminate all borrowing for undergraduates. Liberal arts colleges Amherst, Davidson and Williams have since followed, with others, like Wesleyan, the University of Virginia and now Duke, eliminating loan requirements for the poorest students.
Some critics, however, have wondered why graduates of such schools should have any debt. At Yale, whose endowment has passed $22 billion, about one-third of last year’s graduates took out loans, graduating with about $12,000 in debt.
At Harvard, with an endowment of more than $30 billion, one-quarter of last year’s graduates took out loans. The median graduating debt was about half that reported by Yale. At Stanford, it was about $17,000.
Still, despite four-year costs approaching $200,000, borrowers at all three schools graduate with less debt than the national average.
“We felt like it was very reasonable to ask students, before we give them thousands of dollars in institutional scholarship funds, to take on a portion of the burden,” Stanford financial aid director Karen Cooper said. Stanford has lowered its expected student contribution and raised grant aid, and Cooper notes that even families earning $200,000 can get some help.
At Yale and Stanford, parents earning under $45,000 pay nothing, while at Harvard the threshold is $60,000.
About 40 percent of undergraduates receive aid at Duke, which said total aid spending would rise 17 percent next year to $86 million.
The schools that have dropped loans say they want to remove all obstacles for low-income students, and there is some evidence it works. At Princeton, the percentage of low-income students has jumped from 8 percent to 15 percent since the policy was changed.
But others question their motives, saying the schools are trying to snap up the best students and doing little overall good.
“It sounds as though it’s a policy that benefits low-income students, but when you cut to the core of it, it really is price positioning on the part of institutions that can afford to do so,” said Dr. Robert Massa, vice president for enrollment at Dickinson College in Pennsylvania. “The institutions that can afford to do this today are taking a short-term view to react to national pressure about controlling the price of higher education.”
Massa argues that the practice actually inflates the overall cost of higher education. He says if more schools followed Princeton’s lead, colleges like Dickinson would have to join the financial aid arms race just to attract good students. And where would that money come from? The tuition they charge everyone else.
He thinks colleges have better places to spend money — more professors, better programs — than on promises to students they won’t be saddled with even a penny of debt.
“Cut the tuition!” Massa says. “That’s the way to control the price!”
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