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Amherst College using endowments as student loan alternative
Devon Courtney, Collegian Staff
Issue date: 12/13/07 Section: News
As part of a growing trend in financial assistance, schools like Amherst College are using portions of their annual endowments to help students get through college without having to repay any loans.
"We were the first to go with dropping loans in '99," said Joe Paul Case, director of financial aid at Amherst College. "We're very fortunate to have the resources to devote to this."
Amherst College, which is a private higher-education institution, used 4.6 percent of its endowment last year to remove loans from accepted applicants whose family incomes total below $50,000 per year.
The reasons for this include the need to counteract both rising inflation rates and the increasing costs of higher education, not to mention an interest in helping students bear the burdens of credit damages later on in their lives.
"Let's say you have to borrow $5,000 in alternative loans each year," continued Case, referring to outside loans not offered through federal programs. "It's probably going to grow to $6,000 by the end of that year, and the interest rates themselves are subject to change over time."
"You'll probably be paying that off for the next 10 years," said Case.
An important question is whether or not public universities in Massachusetts will be able to follow suit.
"Public school bills in New England are based primarily on substantial fees," said Case. "The pressure is on state legislature to step up to the plate and provide proper appropriations."
Representatives from Governor Deval Patrick's press office could not be reached in time for comment.
Columbia University in New York is one of the private schools which adopted the student debt assistance program last year. It was in part due to a donation of $400 million from John Kluge, an alumnus of the university. It was the largest donation exclusive to student aid in history.
"I'm still working with about the same amount of funds on a day to day level," said Columbia sophomore Grace Duffy. "But in terms of my future, this means I'll be able to graduate completely free from loans, which is amazing."
"We were the first to go with dropping loans in '99," said Joe Paul Case, director of financial aid at Amherst College. "We're very fortunate to have the resources to devote to this."
Amherst College, which is a private higher-education institution, used 4.6 percent of its endowment last year to remove loans from accepted applicants whose family incomes total below $50,000 per year.
The reasons for this include the need to counteract both rising inflation rates and the increasing costs of higher education, not to mention an interest in helping students bear the burdens of credit damages later on in their lives.
"Let's say you have to borrow $5,000 in alternative loans each year," continued Case, referring to outside loans not offered through federal programs. "It's probably going to grow to $6,000 by the end of that year, and the interest rates themselves are subject to change over time."
"You'll probably be paying that off for the next 10 years," said Case.
An important question is whether or not public universities in Massachusetts will be able to follow suit.
"Public school bills in New England are based primarily on substantial fees," said Case. "The pressure is on state legislature to step up to the plate and provide proper appropriations."
Representatives from Governor Deval Patrick's press office could not be reached in time for comment.
Columbia University in New York is one of the private schools which adopted the student debt assistance program last year. It was in part due to a donation of $400 million from John Kluge, an alumnus of the university. It was the largest donation exclusive to student aid in history.
"I'm still working with about the same amount of funds on a day to day level," said Columbia sophomore Grace Duffy. "But in terms of my future, this means I'll be able to graduate completely free from loans, which is amazing."
Viewing Comments 1 - 2 of 2
CU Alum
posted 12/14/07 @ 1:28 AM EST
"Amherst College . . . used 4.6 percent of its endowment last year to remove loans from accepted applicants whose family incomes total below $50,000 per year. (Continued…)
Student loan consolidation
posted 6/20/08 @ 10:49 AM EST
That's admirable but I doubt that the sustained efforts of this college would make a big difference for student loans. These things should be handled on a microeconomic and politic level, we need all colleges to be an active part in such an action. (Continued…)
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