One small step for Penn

It was with much fanfare that a press release from Penn's Office of Communications announced a new financial-aid initiative Thursday. The University "will provide grants for undergraduate students from economically disadvantaged families with incomes of $50,000 or less," it read. If you thought that such students would now be attending Penn free of charge, you would not have been alone. The next day, online collegiate news site Inside Higher Education wrote that "Penn will pay full costs for students with family incomes up to $50,000."

And the way Penn billed the initiative, the mistake isn't surprising. But the new financial-aid decision -- which replaces all loans for qualifying students with grants -- is not a major change in policy.

The good news is that part of this is because the University has been moving away from loans in financial aid for years. Since 1997, the percentage of Penn's average financial-aid package made up by loans has decreased from 23 to 11 percent, while grants have increased from 68 to 80 percent.

So, with this announcement, the remaining loans will become grants. And with fewer than 400 students affected, the total cost to the University -- even if all 400 students receive complete financial aid packages -- would be less than $2 million. With an endowment of more than $4 billion, the change is hardly groundbreaking. In fact, it won't make a penny's difference in the contribution Penn expects from students' families.

But it's definitely a step -- albeit small -- in the right direction.

Penn's endowment is small in comparison to its peers -- Harvard University's tops $25 billion and Stanford University has more than $12 billion in the bank -- and the University could not forgo tuition and board for low-income families like other schools have done. However, Penn can work to catch up its financial-aid programs by using initiatives such as these as a stepping stone toward that larger goal.

Making college affordable and ensuring that all students, no matter their financial status, are able to attend this University is a noble and worthy goal. But to do it will take more than eliminating a small number of loans. It will take a major fundraising campaign -- which has already begun -- and a firm commitment from the University, which Penn has begun to show with an 8 percent increase its in financial aid budget, higher than its tuition increase.

According to Penn's Director of Financial Aid Bill Schilling, only 13 percent of financial aid is currently funded by the University's endowment; the rest comes from its operating budget. Penn must work hard to grow its endowment and continue soliciting donations to permanently endow financial aid.

Only then will the future of financial aid be secure, and only then can Penn truly claim to be affordable.

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