Trustees Meeting: Penn raises no-loan threshold to $60,000

A revamped financial-aid package will now grant a no-loan financial aid policy to families earning $60,000 or less per year.

This policy was announced by Vice President for Budget and Management Analysis Bonnie Gibson at the Board of Trustees Budget and Finance Committee meeting yesterday.

The new policy will impact 213 students, in addition to the 283 who benefitted from the no-loan policy last year, Gibson said.

This new initiative builds on last year's package -- a similar policy, which was capped at families who earn less than $50,000. Last year was also the first time that the University eliminated loans completely for students from certain low- and middle-income families.

And although hard data is difficult to come by, Executive Vice President Craig Carnaroli says there are signs that last year was a success.

"After we announced [the policy], we had a number of calls and interest." And, when Penn President Amy Gutmann "was up at a public school in New York, a lot of guidance counselors mentioned that they knew about the program. . [It's a] positive signal about the affordability of Penn," he said.

The extension of the policy comes along with Penn's 4.9 percent increase in total costs to $46,124.

The revenue generated from this increase totals $23.9 million, and $4.9 million of that will be put toward financial aid next year. Of that portion, $4.2 million will be used to cover current financial-aid costs, while $700,000 will go toward the new initiative.

In addition, Penn's $610 million endowment increase this past year will increase financial aid-based spending by a total of $7 million.

"What our need-based aid program does is price the Penn education at what the family can afford," Director of Student Financial Aid Bill Schilling said.

But, he added, the policy "is not always understood by a lot of people, particularly if they haven't had strong counseling."

As a result, the University is working on ways to get the word out about its policies.

"We're going to do more in outreach and make sure that our accessibility is more widely known," Gutmann said. "It's an important part of our mission, and our mission is not accomplished. We still need to get the word out."

In addition to eliminating loans for families that make less than $60,000 a year, Penn is also striving to decrease loans in financial aid packages for all students.

The average freshman financial-aid package has increased by 28 percent since 2001, Gibson said. In that package, the average grant has increased by 43 percent and the average loan has decreased by 37 percent.

University officials link this strategy of replacing loans with grants to a decreasing student debt.

For graduating seniors, "average debt has declined very modestly as we have continued to decrease loans in the freshman aid package," Gibson said.

As with the tuition increase, the new financial aid initiative was approved unanimously by the Trustees.

We're "sending the message that Penn is affordable to all strata in the population," Carnaroli said.

The changes will be in effect for the classes of 2008 and later.

Please note All comments are eligible for publication in The Daily Pennsylvanian.