No Loans At All at Southern LAC

Davidson College, a pretty neat liberal arts school down south, just instituted a policy that offers aid aid packages comparable to the new polices some of the Ivies have been introducing– eliminating all loans for low-income students and encouraging careers in public service.

[A]n economist of higher education said he saw the logic to the move. Michael McPherson, president of the Spencer Foundation and former president of Macalester College, said that many private colleges these days focus on “how to get more paying applicants,” so it is commendable for a college to be thinking about ways to get more low-income students.

McPherson said there is evidence that a very simple message can have a big impact. In 2004, Harvard University announced that it was eliminating all expected contributions from the families of students with family incomes of up to $40,000 (a level since increased to $60,000 ). When the university adopted its policy, it saw an immediate increase in the proportion of new students from low-income families

Before Harvard had its new policy, it was also giving very generous aid packages to students in this group, probably identically good, McPherson said, but applicants responded to the simplicity of the revised policy. “Anyone could have seen that if you got into Harvard, you would be able to afford it, but it seems true that when they publicly stated in a new way what they were already doing, they got a lot more of these applicants,” McPherson said.

A straightforward message “can be effective,” he said.

Robert F. Vagt, Davidson’s president, said it was also important to send a message to those who enroll about their post-graduation options. In the last year, he said, he has heard from at least six seniors who told him that they wanted to be teachers or work for a nonprofit group or take some socially valuable, but financially not so lucrative, job. “They are telling me, ‘I can’t afford to do that,’ ” Vagt said. “Debt is affecting students’ choice of careers,” he said.

By combining the need to attract low-income students with the goal of encouraging all students to consider service-oriented jobs, Vagt said, “this is the right thing to do.”

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