Raising Stakes, Princeton Ups Financial Aid

Princeton University announced on Sunday that it will replace student loans with outright grants and scholarships, funding the change with its $8 billion endowment.

The policy change reduces the current average of $15,000 to $20,000 of debt that student graduate with annually.

Princeton's last major financial aid change was in 1998, and it substituted grants for loans for students whose families earn less than $46,500. Harvard followed suit, giving an additional $2,000 per semester to eligible students.

Harvard officials said they were also looking for ways to fund reductions in Harvard students' debt load.

"The $2,000 increase per student per semester worked for a while, but we are trying to reduce loan money," said Andrew Tiedermann, communications director of the University Development Office.

For the moment, however, Harvard officials say the University does not plan to take any action in response to Princeton's change in policy.

Princeton Director of Financial Aid Don Betterton said his university's latest financial aid reform was due in large part to its burgeoning endowment.

"We started three years ago with financial aid changes consistent with our values and actions. We want

to reduce pressure on parents and students," Betterton said. "This year, butressed by giving, a capital campaign and our successful endowment investments, we were able to do what we did three years ago for all our students."

According to Princeton spokesperson Marilyn Marks, the university has no intention of setting a precedent for financial aid reform.

"We are coming off a period where we've done well. Princeton is not pressuring anyone else, we just want to make sure that students who want to come to Princeton can," Marks said.

Harvard has not announced plans for a similar initiative, though Dean of the Faculty Jeremy R. Knowles says he supports Princeton's increase in aid.

"I am always pleased when a distinguished university improves the support of its students, for that opens the doors of higher education even wider," Knowles said.

Harvard's recent capital campaign raised $225 million earmarked specifically for financial aid.

"Financial aid was the largest goal in the capital campaign. The endowment is tightly restricted and we wanted to keep financial aid floating for the long term," Tiedermann said.

"Scholarships are a priority on the agenda but stand outside the endowment," Tiedermann added. "Part of the money that was raised was raised for scholarships, not student loans."

In addition to changing the face of undergraduate financial aid, Princeton's reforms mean that next year, an additional $6 million will be spent on graduate students.

Princeton plans to double the number of humanities and social sciences doctoral students it supports from 325 to 650 and provide all first-year doctoral students with a stipend and full tuition.

Peter T. Ellison, dean of the Graduate School of Arts and Sciences (GSAS), said he views Princeton's graduate school reforms as similar to many of the programs Harvard already has implemented for its students.

"Some of them [Princeton's reforms] are comparable to things we do now. We give health coverage to all our graduate students," he said.

But while Princeton's graduate school reforms support first-year students in the natural sciences, Harvard science students receive no such aid.

Harvard currently supports social science and humanity students for two years, but science students are forced to support themselves through teaching.

"Funding for science students is something that we are going to have to look at and change," Ellison said.

Ellison seemed skeptical about Princeton's motivations.

"It isn't that students are getting a better deal, it's that faculty grants will be reduced," he said.

Both Princeton and Harvard graduate students receive the same financial support, but much of Harvard's support for students tends to be internal. Princeton's changes reduce pressure on faculty to find research positions for doctoral candidates, especially in the sciences.

And in the wake of the Princeton announcement, Ellison said that GSAS has "to make choices about how to allocate our funds."

"We have some money from the capital campaign and the GSAS annual fund that isn't specifically earmarked for anything," Ellison said. "But decisions will have to be made carefully."

Whatever action Harvard finally takes will be carefully calculated.

"Harvard tends not to do things in response [to other schools]. We are concerned about what is going to be best for Harvard students," said University spokesperson

Sally Baker. "It took a while for things to change in 1998."

Knowles said the University continues to look at expanding financial aid.

"Having made large infusions into undergraduate and graduate student support two years ago, we continue to consider how to further improve both access to Harvard and the quality of the educational experience of our students once they are here," he said.

--Staff writer Nicole B. Usher can be reached at usher@fas.harvard.edu.