Northwestern University has announced an adjustment to their current aid policy but is taking a different approach than many of its peers. They have announced that loans will be replaced with grants for “undergraduates with the greatest financial need” starting Fall 2008. What the phrase “greatest financial need” means is not defined. Northwestern’s position is that it is more equitable to keep the term undefined since there are some families with higher income that may have unusual expenses such as high medical bills or the need to care for grandparents. Northwestern will also be capping subsidized Stafford and Perkins loans at no more than $20,000 for 4 years.
I am uncertain how Northwestern’s policy will work since there seems to be an internal inconsistency. Most students who qualify for subsidized Stafford and Perkins loans qualify for such loans because of low family income. If these students don’t qualify for loan replacement, and they presumably won’t since their loans are capped at $20,000, then who exactly will qualify for Northwestern’s new loan elimination policy? Student’s with family income below $10,000 or $20,000? Frankly, as a counselor advising students on what colleges to consider, where financial aid is one of the considerations, I am not at all confident that this change at Northwestern will have any practical effect on financial aid for most students. Given the substantial size of Northwestern’s endowment, that is unfortunate.
Our daughter is a sophomore at Northwestern and we have been fortunate to have received loans for the last two years and scholarship support from the university. With this change in policy, our family is very concerned that we will not qualify for a grant and that we will need to seek financial assistance outside of the University for financing our daughter’s education. For two years we have had a need and now we’re not sure. We are pressing ahead by completing all of the applications for grants, loan, etc. but we are concerned that we will be turned down now that the support is via grants versus loans.
Rarely will a college get worse in it’s aid just because it has improved the aid for lower income students. If your income and assets are similar to what you had previously, I would guess that Northwestern will give you similar aid. I will note, however, that most colleges will gradually increase the amount of the loan portion of the package so you might expect that the loans will be greater next year.
Good luck and I hope your aid is comparable to last year.