Some describe it as an "arms race" while others, like Director of Student Financial Aid David Mohning, simply refer to it as "putting different ingredients into a recipe for spaghetti sauce."
Either way, the world of financial aid is getting interesting as universities across the nation are making drastic changes to their financial aid policies.
Just this year, Harvard University led the movement by announcing its program to significantly reduce financial burdens on families that have incomes up to $180,000, as The Associated Press reported. Those families were promised that their students' costs would not exceed 10 percent of annual household income.
Fellow Ivies Yale, Brown, Columbia and Princeton quickly followed suit by adjusting their own policies. Brown, for example, will offer free tuition to lower-class students, according to a Bloomberg News report.
With a debt reduction initiative introduced more than six years ago, Vanderbilt is definitely not behind. Under this plan, Vanderbilt seeks to minimize the value of need-based loans in order to decrease average indebtedness of students when they graduate.
Unlike the proposals made at Ivy institutions that target certain income brackets, the program at Vanderbilt is applied across the board. Thus, its goal is to eliminate need-based loans for any student who qualifies for it, without considering an income cutoff.
Since its introduction, the amount of borrowing for individual students has been reduced, and the amount of grant support has been increased.
"It's been very successful so far, and it increases Vanderbilt's competitiveness with the other institutions," Mohning said. "We've seen a positive trend in yield rate, and we hope our financial aid package is just one of the many reasons causing that increase."
The total amount of assistance awarded to freshman students who received a need-based grant for the academic year is $24,796,086. Of that amount, 92 percent is gift assistance, while 6 percent and 2 percent are for subsidized loans and federal work-study, respectively.
Just last Thursday, Chancellor Nick Zeppos addressed the faculty assembly and announced his goal of improving the financial aid system so that no Vanderbilt undergraduate is burdened with debt after graduation.
"We're continuing to look for ways to even further enhance that initiative, and Chancellor Zeppos' remark certainly reflects our intent," Mohning said.
-Judy Wang can be reached at zhu.wang@vanderbilt.edu
