After months of speculation, and just nine months after Biddy Martin argued that Cornell couldn't afford to go no-loan fo its neediest students, Cornell has done it. Starting next year, Cornell drops need-based loans for undergraduate students from families earning under $75,000. It's going to cost the University an additional $14 million dollars a year -- the University is already spending $116.8 million a year on undergraduate aid. That's a huge amount of money for a relatively cash-strapped institution like Cornell. Why is this announcement so important? Because due to Cornell's financial position and more economically diverse student body, the announcement represents a much larger commitment of resources than some of Cornell's peers. As David Harris so adequately put it: While the administration has obviously been considering this move for a while, I'll speculate that the turning point might have been Dartmouth's announcement earlier this week. While the Harvard, Yale, and Princetons of the world have all adopted more assertive policies, Cornell honestly doesn't compete for many students with these schools. But for Dartmouth, there is a pretty strong cross-admit recruiting battle with Cornell, and as I mentioned last year, game theory plays a large role in higher education. If you read between the lines, however, what's not clear is whether or not the University is actually adopting a "free tuition" policy as Dartmouth and Harvard have (Dartmouth for families under 75k, Harvard for families under 120k). I suspect that the no-loan policy actually still involves expectations that Cornell students will work during the year and the summer and contribute to the cost of their education. Which if you ask me, is a good thing. More analysis to come.The university expects to spend $116.8 million of its own resources on undergraduate financial aid in 2007-08, 94 percent of which will be spent on grant aid. More than 60 percent of Cornell's undergraduates receive some form of financial aid. Cornell has a greater number and a higher percentage than most of its peers of Pell grant recipients -- students from families that have annual incomes below $45,000. For fall 2007, Cornell enrolled 1,799 Pell grant recipients, representing 13.3 percent of its undergraduate student body.
Deputy Provost David Harris added: "Because Cornell's financial-aid population is larger than the entire undergraduate student bodies of a number of our fellow institutions, the challenge was especially significant here. This initiative will strengthen the economic diversity of our student body and, most importantly, free our students to pursue studies and careers that match their skills and interests, rather than those that ensure they will be able to repay their loans."
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