An $11.5 million increase to the financial aid budget will mean fewer loans and less debt for financial aid recipients, starting next fall.
All students from families making under $100,000 a year will have loans eliminated from their aid packages. That includes about 62 percent of financial aid recipients, said Director of Financial Aid James Tilton.
For the rest – those from families making more than $100,000 a year – loans will be cut significantly. Loans will be reduced to $3,000 a year for students from families making between $100,000 and $125,000, to $4,000 a year for those from families making $125,000 to $150,000 and to $5,000 a year for those from families making more than $150,000.
In addition, students’ loans will not increase from year to year. For most families with incomes under $60,000, the parental contribution will also be eliminated. Families with incomes under that mark but with assets greater than $100,000 will still be required to make a parental contribution, but that amount will be calculated based on their assets and come out of their assets – not out of their income, Tilton said.
Currently, 12 percent of students receiving financial aid are exempt from the parental contribution, Tilton said. Under the new plan that number will rise to 33 percent, he said. Those students’ packages will consist of only grants and work-study grants.
But the new financial benefits will not come without a cost.
The “no-work” rule for first-year aid recipients – which protected freshmen from having to work during their first year at Brown – has been eliminated, Tilton said. But he said that feedback from freshmen indicated that although they appreciated packages without a work requirement, they would prefer a reduction in loans.
Tilton and Dean of Admission Jim Miller ’73 presented several proposals for financial aid to the University Resources Committee, which prepares a budget recommendation for the president. The other proposals were “just a different take” on the same concepts that appeared in the final plan, Tilton said.
Students from families making under $60,000 were of particular concern, Tilton said. The rationale for the new plan was not just increasing scholarships, he said, but decreasing student debt.
Under the current financial aid policy, students from families making under $100,000 currently graduate with total debt between $10,250 and $25,850, according to a University press release on Saturday. That debt load will drop to zero for new students.
The plan also reflects students’ concerns over limits on outside scholarships, Tilton said. Currently, outside scholarships can only reduce the “student-effort expectation,” according to the financial aid Web site. Starting next year, those scholarships can reduce loans, work and the summer savings, Tilton said.
The changes do not include aid for students not currently receiving it, Tilton said.
“We may experience some growth of financial aid on the margins” as more people see the announcement and apply, he said, but the number of students on aid won’t increase significantly.
Next year’s 20 percent increase in the financial aid budget far outstrips recent increases, which have held somewhere just below 10 percent.