Expanding its effort to alleviate the financial burden on low- and middle-income students and to continue to attract top students with diverse economic backgrounds, Penn will provide grants for undergraduate students from economically disadvantaged families with incomes of $50,000 or less, President Amy Gutmann announced last Thursday.
This move coincides with a $6.3 million increase in the University’s undergraduate financial aid budget for the coming academic year, with those funds targeted to middle- and low-income families, reaffirming Penn’s commitment to need-blind admissions and meeting the full need of all students.
“As we outlined in the Penn Compact back in 2004, increasing access to a Penn education is a top priority,” President Amy Gutmann said. “By eliminating loans for low-and middle- income students, our financial aid program now enables students from every family income level to enroll at Penn. By providing financial aid packages without loans to students whose parents earn $50,000 or less, we can ease their financial concerns, not only throughout their education but also after graduation, enabling them more freedom to choose the most satisfying careers.
“With this initiative, Penn becomes the first major research university that funds the majority of its financial aid from its operating budget to eliminate loans for low- and middle- income students,” President Gutmann said.
Penn spends more than $78 million per year of its operating budget on financial aid.
In conjunction with the reductions in summer savings requirements and increases in allowances for incidental expenses for students from low-income backgrounds, which were implemented in 2005-2006, the elimination of loans will mean that the highest-need students will each receive grant aid of more than $45,000 in 2006-2007. Additional grant aid for rising sophomores, juniors and seniors was also approved to moderate any self-help and/or loan increases they might anticipate.
Penn is projecting an increase of 7.7 percent in its need-based undergraduate grants and scholarships in the coming year (see article).
From 1997 to 2005, the percentage of the average freshman aid package met by grants has increased from 68 percent to 80 percent, while the average loan as a percentage of total aid has declined from 23 percent to 11 percent. The average freshman grant increased by 61 percent during this same period.
Roughly 40 percent of the University’s aided freshmen will have their need met without any expected student loan in 2006-2007.
Penn will continue, for the seventh year, the Summer Savings Waiver Program, which provides grants to offset the normal summer self-help work contribution requirement of students who participate in unpaid or low-paying community service or career-related activity during the summer.