The Financial Aid Fiscal Cliff
Claremont McKenna College President Pamela Gann sent an email to the CMC student body March 14 announcing the termination of the college’s “No Packaged Loans policy,” a financial aid policy which previously prohibited the inclusion of student loans in student financial aid packages. The policy was changed so that as much as $4,000 in loans could be included in annual financial aid packages for future classes, amounting to a maximum of $16,000 in student loan debt for CMC students upon graduation.
The change understandably upset many in the CMC community who worried about the policy change’s effects on socioeconomic diversity at the college. Legitimate fears surfaced that an additional $16,000 in loans could easily be significant enough to deter low-income students from attending the college. The conclusion of a historic fund-raising campaign, which brought CMC’s endowment to a whopping $600 million, also made many students and alumni alike skeptical of claims that maintaining the No-Loans Policy was fiscally unfeasible The fact that the No-Loans policy cancellation coincided with the announcement by the CMC Administration of plans to build a new, state-of-the-art fitness center certainly did not serve as a selling point either. Echoing the concerns and opinions of many within the CMC community, Senior Class President-elect Laura Epstein even penned an op-ed for the CMC Forum titled “Invest in Students, Not a New Gym” shortly after President Gann’s announcement.
Though the sum of $14 million still pales in comparison to CMC’s hefty endowment, it is important to keep in mind that financial aid spending quickly adds up from year to year. With so much of the current endowment tied up in restricted gifts earmarked for specific purposes like campus renovation, a policy that is too generous could easily burn through CMC’s financial aid allotments over the span of few years. Even colleges like Dartmouth and Williams, both institutions with larger endowments than CMC (in both absolute and per student terms), have cancelled their no-loans policies. In the words of Dean Huang, “Any college that’s not paying attention to financial aid is asleep at the wheel right now, because it’s going to kill you.”
It is easy to point out examples of visible waste on CMC’s campus, from the splurges on fresh-cut flower arrangements and purchases of pricey modernist furniture, to the overwatering of Parent’s Field. It is certainly heartening to see students and alumni question the wisdom of terminating a financial aid policy while allowing costly planned construction projects to move ahead. However, the empirical evidence presented by the CMC Administration suggests that there are, indeed, legitimate financial reasons for cancelling the No Packaged Loans policy. The generosity and inclusivity of CMC’s financial aid policy ultimately cannot depend on unsustainable short-term overspending. Instead, it must depend on the willingness of donors to give not merely out of a desire to put their name on a building, but also out of a desire to “pay it forward” to promising students in need. Either way, there will still be plenty of fresh flowers, muddy lawns and space-age furniture for future students to look forward to (not to mention a new gym).