President's Message - Penn Expands Financial Aid Program to Eliminate Loans - December 2007
December 17, 2007
PHILADELPHIA -- The University of Pennsylvania today announced a far-reaching new financial aid initiative that will eliminate loans for financially eligible undergraduate students regardless of family income, making it possible for students from a broad range of economic backgrounds to graduate debt-free.
The new program is the latest step in Penn’s effort to widen access for students from all economic backgrounds, expanding its no loan program beyond low and lower-middle income families to include middle and upper-middle income families. Currently, one-half of the approximately 4,000 Penn undergraduates who receive aid have a loan as part of their need-based financial aid package. The new initiative will substitute grants for loans for all Penn undergraduate students who are eligible for financial aid.
“This is a transformative moment for higher education and for Penn,” said Penn President Amy Gutmann. “Making a Penn education accessible to exceptionally talented students from the broadest array of economic backgrounds possible is fundamental to our mission. No longer will students need to think twice about applying to Penn for fear that they will emerge with overwhelming debt. This represents a tremendous commitment—and enormous investment—on Penn’s part to increasing access for thousands of students. Talented, hardworking young people should not be deterred from pursuing their dreams for fear of being a financial burden to their families.”
The new Penn program will be phased in beginning September 2008, and will include all eligible undergraduates, not just entering freshmen. Effective that year, students with calculated family incomes under $100,000 will receive loan-free aid packages, while families above that level will receive a 10 percent reduction in need-based loans.
By fall 2009, all undergraduate students eligible for financial aid will receive loan-free aid packages, regardless of family income level.
“We have previously addressed the needs of low income and lower middle income families, but now must respond to the needs of our middle and upper middle income families, who are facing the highest levels of debt,” Gutmann said. “We want to send a clear message to them that Penn is committed to supporting them as they seek to provide the best educational opportunities for their children.”
Gutmann said the new initiative will be financed in large part from funds raised by Making History, The Campaign for Penn, the University’s five-year, $3.5 billion fundraising campaign, which includes a $350 million goal for undergraduate financial aid endowment.
Penn currently spends more than $90 million per year of its resources for grant aid to undergraduate students. When the new initiative is fully implemented, that figure will increase more than 20 percent, to more than $110 million.
“For many years, the Trustees have made the affordability of a Penn education a high institutional priority. The total elimination of student loans as part of our aid package is a critical next step in that process. We are pleased to join President Gutmann in supporting this important new program,” said James Riepe, chairman of Penn’s Board of Trustees. “The Trustees are committed to the funding of this initiative and are excited about the impact it will have on thousands of our students. This is a proud moment in our institution’s 267-year history.”
Of the handful of other colleges and universities that have adopted no-loan policies in their financial aid packages, Penn has the largest undergraduate enrollment (10,160).
Since 2003, Penn’s undergraduate financial aid endowment has more than doubled. Endowment income, however, can fund only 17 percent of the cost of the current aid program. The balance of financial aid funding comes from the University’s unrestricted operating budget. Both undergraduate and graduate financial aid are priorities for the University’s Making History capital campaign.
The new initiative expands Penn’s long-standing commitment to its need-blind admissions policy, which means students are accepted based on academic achievement, regardless of their ability to pay. Penn guarantees that any accepted student who matriculates with demonstrated financial need will receive a financial-aid package that meets the full extent of the student’s need for a full four years. Fewer than 50 private institutions across the nation have need-blind admissions policies and even fewer have financial aid based exclusively on need. Penn does not offer athletic or merit scholarships. Forty percent of Penn’s undergraduate students receive need-based financial aid from the University.
Penn also has recently launched a new outreach program targeting hundreds of schools and thousands of students from low and middle-income families -- who might never have considered applying to Penn -- to let them know that if they are accepted to Penn, they will receive a financial aid package with no loans. Penn is already seeing success in its efforts to improve access for lower income families, with a doubling of admitted students with family incomes under $60,000 in the last year.
December 17, 2007 Contact: University Communications
PENN EXPANDS FINANCIAL AID PROGRAM TO ELIMINATE LOANS: FACT SHEET
ABOUT THE UNIVERSITY OF PENNSYLVANIA
For more than two centuries, the University of Pennsylvania has been committed to excellence in scholarship, research, and service. From its highly regarded undergraduate, graduate and professional schools to its wide-ranging program of interdisciplinary research and scholarship, Penn takes pride in being a place where students and faculty can pursue knowledge without boundaries, a place where theory and practice combine to produce a better understanding of our world and ourselves.
Penn is a highly selective university composed of 12 schools, with a full-time enrollment of just under 20,000 undergraduate, graduate and professional students. The 10,163 undergraduates represent one of the largest undergraduate student bodies in the Ivy League.
Penn received 22,646 applications for admission to the Class of 2011. Of those applicants, 3,628, or 16 percent, were offered admission. Ninety-six percent of the students admitted for Fall 2007 came from the top 10 percent of their high school graduating class. Over 66% of admitted students choose to attend Penn.
Undergraduate tuition for academic year 2007 – 2008 is $32,160. Total charges, including fees and room and board are $46,124.
Penn has a long-standing need-blind admissions policy, which means students are accepted based on academic achievement, regardless of their ability to pay. Penn guarantees that any accepted student who matriculates with demonstrated financial need will receive a financial-aid package that meets the full extent of the student’s need for a full four years. Fewer than 50 private institutions across the nation have need-blind admissions policies and even fewer have financial aid based exclusively on need. Penn does not offer athletic or merit scholarships.
Fifty five percent of all undergraduates receive some form of financial aid, including grant, loan, and work-study job. Over forty percent of all undergraduates are eligible for need-based aid. This year Penn will award over $102 million in grant aid: of that total $12 million is funded from outside sources, including government grants, while $90 million is funded from Penn’s resources.
PENN’S COMMITMENT TO INCREASING ACCESS
At her inauguration in 2004, University of Pennsylvania President Amy Gutmann articulated an exciting new vision for the University, including a commitment to make a Penn education affordable to all outstanding students of talent and high potential.
Over the past three years Penn has moved aggressively to enhance our undergraduate financial aid programs, including the elimination of loans for students from families with income under $50,000 in 2006, with that threshold increasing to $60,000 in 2007. Through these efforts, we have doubled the number of high-need freshmen with loan-free aid packages. Overall, the percentage of admitted freshman grant recipients with loan-free packages has increased from 31% to 49%. In addition, our new policies have decreased the average debt at graduation from $20,927 in 2006 to $18,800 in 2007, a decrease of 10%.
ELIMINATION OF LOANS TO IMPROVE AFFORDABILITY
With the enthusiastic support of the Penn Trustees, President Gutmann is announcing a bold new initiative to eliminate loans for all students eligible for financial aid, regardless of family income. Consequently, effective academic year 2009-2010, a student admitted to Penn who is eligible to receive financial aid will no longer have to take on any loans to study at Penn. This transformative initiative will continue Penn’s commitment to lower- and lower-middle income students while also lifting the burden off of students from middle- and upper-middle income families, who typically have carried the greatest debt from higher education.
Beginning in fall 2008, all undergraduate students – not just entering freshmen – from families with calculated incomes under $100,000 will receive no-loan aid packages. Families with incomes above that level will receive a 10 percent reduction in need-based loans.
Beginning in fall 2009, all undergraduate students eligible for financial aid will receive loan-free aid packages, regardless of family income level.
- This new initiative is the latest step in the University’s goal to make a Penn education affordable and accessible to students from a wide spectrum of economic backgrounds. Penn currently spends more than $90 million per year of its resources for grant aid to undergraduate students. When the new initiative is fully implemented, that figure will exceed $110 million – an increase of more than 20 percent.
- The new financial aid initiative is expected to benefit more than 40 percent of Penn’s undergraduates. The University will finance this initiative largely through funds raised from its recently launched, five-year, $3.5 billion Making History capital campaign, which includes a $350 million goal for undergraduate financial aid endowment. During the silent phase of the campaign Penn raised over 400 new aid scholarships.
Penn also has just recently launched a new outreach program targeting hundreds of schools and thousands of students from low and middle income families – who might never have considered applying to Penn – to let them know that if they can get accepted to Penn, they will receive a full financial aid package with no loans.
ALL STUDENTS BENEFIT FROM PHILANTHROPY
Like most highly selective universities, tuition does not cover the full costs of instruction at Penn. Tuition and fees cover only 72 percent of the cost of providing a Penn education. Every student who attends the University of Pennsylvania, whether they qualify for need-based aid or not, benefits financially from the support provided by the endowment and other philanthropy.