Williams College announced plans to revoke its no-loan financial aid policy on Sunday, citing a $500 million drop in its endowment over the past three years, increasing financial aid expenditures, and unstable economic conditions.
In response, President Barry Mills said that Bowdoin has no immediate plans to eliminate its own no-loan policy. Speaking at Monday's faculty meeting, he affirmed his commitment to the policy, stating that any changes would only be considered in light of economic conditions rather than peer schools' decisions.
"The no-loan program is certainly among the things to look at if we decided we needed to make adjustments based on the economy," he said in an interview with the Orient.
"But...we wouldn't move back just because the competitors allowed us to move back, merely to save money," he added.
Williams College Interim President Bill Wagner posted a letter on the Williams Web site stating that the college will "reintroduce modest loans for some aided students," beginning with the class of 2015. While some low-income students will still receive grants, others will receive loans adjusted to their family income.
Williams adopted the no-loan policy in 2008, replacing student loans for financial aid recipients with grants or scholarships from the college. Eliminating the no-loan policy will soon save Williams about $2 million per year, according to Wagner's letter.
Bowdoin implemented its own no-loan policy for financial aid recipients in 2008, adding about $2.7 million to financial aid expenditures. The policy sought to decrease student debt at a time of increasing tuition and demand for assistance.
Director of Student Aid Stephen Joyce said that offering grants and scholarships rather than loans helps to "take the pressure off the middle-income folks and give Bowdoin grads the flexibility of job choice, particularly in that first job."
In the 2007-08 academic year, before the no-loan policy was enacted, 85 percent of financial aid recipients took out loans through the College. In 2008-09, only 45 percent of aid recipients borrowed—a decrease of about 270 students. Joyce said that while some students still choose loans to pay for college, the plan resulted in $1.7 million less debt for students.
"There are a lot of good, principled reasons why we adopted the no-loan policy, and I think it would require good, principled reasons to abandon it," Mills said. "I think [a change] is going to have to be driven by a financial reality, and so I think at this point, it's too early to say."
Mills added that while today's economy is faring better than past years, in line with the College's previous financial predictions, it remains unstable. He said he is planning to resume meetings of the Blue Tarp Committee, originally created after the economic crisis in 2008 for faculty and students to evaluate the College's financial situation and policies.
"This isn't happening because Williams made the announcement, this is something that happens every budget cycle—what are we doing, what are the big-ticket items, what are we not doing that we'd like to do," said Joyce.
For the most part, Mills said, trustees and alumni were pleased with the no-loans policy and Bowdoin's increased commitment to financial aid assistance. However, Mills also said that the trustees and alumni understand the need to balance College finances, and would be realistic in any necessary considerations.
Since the implementation of the no-loans policy, Joyce said that financial aid requests are up. However, it's difficult to tell whether the increase is due to tougher economic times or increased interest in the no-loan policy. Further, he said it's hard to estimate the impact financial aid policies have on attracting students to the College.
According to The Project on Student Debt, 46 other schools currently have some form of no-loan or loan-limit policy for financial aid recipients. Some of these schools are making statements in support of their policies as reassurance against Williams's announcement.
A New York Times article on Monday reported that Amherst College, Davidson College, Haverford College and the University of North Carolina made statements that they will continue their no-loan policies.
Given that most colleges adopted a no-loans policy at the peak of endowment performance in 2008, Mills said that "it's not totally unexpected that someone has moved away" from the policy. However, Mills also said that he has "no doubt" a decision to revoke Bowdoin's policy would be unpopular.
"We've continued our policies and, in fact, become more generous over these periods. We're just going to have to see if we can afford it," he said.