Story posted January 24, 2008
Bowdoin College announced Jan. 18, 2008, that it will eliminate loans for all new and current students receiving financial aid, replacing those loans with grants beginning with the 2008-09 academic year.
Bowdoin is one of only two colleges with endowments of less than $1 billion to eliminate loans for both new first-year and current students.¹ Bowdoin is the first college in Maine to eliminate loans for all students.
Bowdoin's new "no-loans" policy is among the more ambitious announced thus far, given the size of the College's endowment, the percentage of students at Bowdoin who receive aid, the size of the aid package provided, and Bowdoin's commitment to meet the full demonstrated need of its students for all four years.
|Endowments at Select Institutions Eliminating Loans for All Students (June 30, 2007)|
|Harvard University (Mass.)||$34.6 billion|
|Yale University (Conn.)||$22.5 billion|
|Princeton University (N.J.)||$15.8 billion|
|Williams College (Mass.)||$2.0 billion|
|Pomona College (Calif.)||$1.8 billion|
|Amherst College (Mass.)||$1.7 billion|
|Swarthmore College (Penn.)||$1.4 billion|
|Bowdoin College (Maine)||$ 828 million|
In announcing the "no-loans" initiative, Bowdoin President Barry Mills acknowledged concerns in the higher education community that the elimination of student loans by wealthy colleges and universities may force less well-endowed colleges to shift away from need-based aid and to admit more wealthy and middle-class students at the expense of the poor. But Mills vowed that this would not be the case at Bowdoin.
"With approximately 13 percent of our students currently receiving Pell grants for low-income students, Bowdoin is considered to be among the most economically diverse liberal arts colleges in America," said Mills. "While eliminating loans for our students on financial aid will be expensive, Bowdoin will not abandon its commitment to educate the poorest in our society in order to fund this new initiative."
Bowdoin currently provides need-based financial aid to 40 percent of its 1,710 students, with the average financial aid package (Bowdoin grant, loan, and work-study) approaching $30,000 in the current academic year, including a typical grant of $24,000. Current first-year students had been expected to graduate in 2011 with an average loan obligation of $21,000 — a number that would have continued to increase for subsequent classes. But by converting loans to grants, Bowdoin will eliminate a significant debt burden for next year's entering class while capping debt at current levels for continuing students.
"The vast majority of our students go on to pursue graduate or professional study after Bowdoin," said Mills. "Some see a calling in such vital but often low paying fields as teaching or social work. With significant debt at graduation, some students will undoubtedly be forced to make career or education choices not on the basis of their talents, interests, and promise in a particular field, but rather on their capacity to repay student loans. As an institution devoted to the common good, Bowdoin must consider the fairness of such a result."
By eliminating student loans, Bowdoin also seeks to attract and enroll students of great promise from all income levels who might otherwise choose a different college simply on the basis of cost and debt.
Bowdoin's comprehensive fee (tuition, room, board and fees) is currently $46,260. For the past decade, Bowdoin has been "need-blind" in its selection of first-year candidates. The College customarily budgets enough grant aid to meet the full calculated need of all enrolling students without using financial need as a criterion in the selection process. Need-blind admission is practiced at only three dozen colleges and universities in the U.S.
Support for financial aid is an important goal of The Bowdoin Campaign, which ends in 2009. Bowdoin is committed to enrolling the most talented and promising students, regardless of their ability to pay for a Bowdoin education.
In order to fully fund its financial aid program — including the conversion of student loans to grants — Bowdoin will earmark approximately $22 million in fiscal 2008-09, or 16 percent of its $140 million operating budget. The financial aid budget is expected to increase annually as the cost of higher education also continues to rise.
The move to convert student loans to grants is also in keeping with Bowdoin's long-standing commitment to students from Maine. While 12 percent of Bowdoin's students come from Maine, they receive a disproportionate 18 percent of Bowdoin's aid budget. The new "no-loan" initiative will have a similarly positive impact on Maine students.
The announcement is the latest effort by Bowdoin to maintain access to college for low- and middle-income students from Maine and across America. Student aid is the single largest component in The Bowdoin Campaign, a five-year effort to conclude in June 2009 that seeks to raise $250 million for the College. Of this amount, nearly $77 million is earmarked for financial aid.
¹Davidson College (N.C.) has also eliminated loans for both incoming and current students. Haverford College (Penn.) has announced that it will eliminate loans for all incoming first-year students while reducing the loan burden for continuing students.