The Commons

When Princeton University announced in 2001 that it would replace all student loans with grants, a chain reaction was set in action, slowly but surely. Students weren’t so much being enticed to choose Princeton—an attractive enough option on its own—as they were being lured away from Princeton’s nearest competitors.

It wasn’t just that Princeton had found a new way to appeal to students; this particular offer helped reverse a strange decline in matriculation at elite colleges among a particular subset of the college-bound population: high-achieving students from low-income families. A growing body of research tells us that these students—even when they know on an intellectual level what they might go on to earn in their chosen fields—are averse to debt.

As a demographic group, these students are more diverse than the college-bound population as a whole, and are also more likely to be first-generation students. They are also rare among subsets of the college-bound population in that they are growing in number, while the overall college-bound population shrinks.

In the years that followed Princeton’s announcement, the rest of the Ivy League colleges and several other highly selective institutions followed suit. Since 2001, the number of colleges replacing loans with grants for low-income families or all families who qualify for aid has more than doubled every two years, reaching a total of 39  in 2009*. Even as the policy adds pressure to already stressed endowments, many schools report that delivering on the no-loan promise remains a high priority. We haven’t begun to see, much less measure, the total seismic shift in applicant and admitted student demographics this change has brought, but some early signals are interesting.

At Princeton, 60 percent of students in the incoming class of 2013 will receive financial aid. A total of 487 students from minority backgrounds represent 37.4 percent of the entering class. That’s a minority student headcount increase of 60 percent over nine years ago, when just 305 students were from minority backgrounds. At the same time, selectivity has increased since 2001.

Lipman Hearne’s 2009 report High Achieving Teens and the College Decision offers insight into the values and motivations that drive students to make the choices they do. Particularly in this climate of increasing economic pressure on both family savings and college endowments, how critical is financial aid to high-achieving students? What do students need to know from the colleges that want them, and how, finally, do they choose from among their options? We’re far from knowing all the answers, but we look forward to beginning a lively discussion—with you.

- Tom Abrahamson, Managing Director & Principal

*Excludes another 23 colleges that make this offer, but limit eligibility by residency or GPA.

Tags: admissions, college decision, economic downturn, education grants, education spending, enrollment, higher education, no-loan aid, nonprofit communications, nonprofit marketing, Princeton University, resources, student aid, trends, yield