PHILADELPHIA –- To ensure that talented, high-achieving students can chart their educational paths without regard to financial resources, the University of Pennsylvania has launched a new financial-aid initiative to make a Penn education affordable for students from low- and middle-income families.
Also, the Penn trustees today approved the smallest percentage increase in tuition and fees in seven years.
Under the new financial-aid initiative, a student from a typical family with income less than $90,000 will no longer pay tuition. A student from a typical family with income less than $40,000 will not be expected to pay tuition, room or board.
The program, reviewed today at a meeting of the Penn trustees' executive committee, eliminates loans for financially eligible undergraduates, enabling students from a broad range of economic backgrounds to graduate debt-free.
Increasing educational access has been a priority of Penn President Amy Gutmann since she took office in 2004.
"Low- and middle-income students are underrepresented in enrollment at most of the nation's highly selective colleges and universities, both public and private, including Penn," Gutmann said.
"It is our responsibility to ensure that we help educate future generations of leaders, regardless of economic background. The excellence of the education we offer on our campuses also depends on our attracting students with varied economic and cultural backgrounds and contrasting life experiences who live and learn together," she said.
About 60 percent of the approximately 4,000 Penn undergraduates currently receiving aid have loans as part of their need-based aid packages. Penn's new initiative will substitute grants for loans for all aid-eligible undergraduates.
In September, all undergraduate students with calculated family incomes of less than $100,000 will receive loan-free packages, while other undergraduates will receive a 10 percent reduction in their need-based loans. By the fall of 2009, all undergraduate students eligible for financial aid will receive loan-free aid packages, regardless of family income.
Penn will continue to assess each student's eligibility for financial aid based on a comprehensive review of the family's financial circumstances, including assets and other pertinent factors. Penn's financial-aid program provides assistance to students from families with incomes ranging from less than $10,000 to more than $200,000, depending on individual circumstances. Not all families at the same income level will be expected to contribute the same amount because they may have different financial need overall.
Under Penn's enhanced financial aid program:
- A typical student whose family income is between $30,000 and $40,000 will receive grant aid of $48,150.
- A typical student whose family income is between $80,000 and $90,000 will receive grant aid of $37,550.
Penn also has launched a new outreach program aimed at thousands of students who might never have considered applying to an Ivy League university such as Penn.
Penn's financial-aid initiative has already improved access for lower-income families, with a doubling of admitted high-need students with loan-free packages in the past year.
"Many students and their families are not aware of the opportunities available to them at Penn," James Riepe, chair of the Board of Trustees, said, "because some families take one look at the listed tuition and fees for a selective university like Penn and never even consider applying. The University's trustees are absolutely committed to assuring such families that they can afford Penn and encouraging them to give us a chance to show what their children can become."
Penn is one of fewer than 50 private institutions in the U.S. with need-blind admissions policies, accepting academically qualified students without regard to their families' ability to pay.
The new aid initiatives fostered by Gutmann and the trustees have been made possible, in part, by Penn alumni and other donors. The University's $3.5 billion Making History fund-raising campaign, launched in October 2007, includes a $350 million goal for undergraduate financial aid.
Also today, the Penn trustees increased tuition and fees by the lowest percentage in seven years, raising them 4.5 percent to $37,526 for 2008-09. With average room-and-board charges, the total 2008-09 undergraduate cost will be $48,148. Average room-and-board charges increased 4.1 percent, for an overall increase of 4.4 percent, also the lowest in seven years.
Tuition and fees fund only 70 percent of the direct costs of teaching and student academic support. The gap between tuition and fees and the actual costs of instruction is covered by other sources, principally endowment income and philanthropy.
With the new financial-aid initiative, Penn will spend more than $110 million annually from its operating budget for need-based grants to undergraduates.
The new loan initiative is a continuation of the effort to reduce the post-graduation financial burden on students. In fact, since 1997-98, the percentage of the average freshman aid package met by grants, rather than by loans and student work, has increased from 68 percent to 85 percent, while the average loan as a percentage of total aid has declined from 23 percent to 6 percent. The average freshman grant increased by 93 percent during the same period. Roughly 78 percent of the University's aided freshmen will have their need met without any expected student loan in 2008-09.
For the ninth year, Penn is continuing the Summer Savings Waiver Program, providing grants to offset the normal summer self-help work- contribution requirement of students who participate in unpaid or low-paying community-service or career-related activities. Penn is also continuing a policy, first implemented in 2005-06, of increasing grants to students from the lowest-income backgrounds to cover supplemental expenses and normal expected contributions from summer earnings.
Of the handful of other colleges and universities that have adopted no-loan policies in their financial aid packages, Penn has the largest undergraduate enrollment at 10,160. Also, Penn was listed earlier this month among the top 10 nationally in a widely publicized "best value" ranking of private colleges and universities.
A video about the University of Pennsylvania's financial-aid initiative is available at www.sfs.upenn.edu/paying/paying-pro-video-wm.htm.###