Princeton to Fund $16 Million Grants

A recent decision by Princeton University to replace student loans with grants has caused an upheaval in some areas of the higher education community, but UNC and Duke University officials say it will not affect them.

Princeton officials announced Jan. 27 that they will spend an additional $16 million from the institution's endowment to fund grants for students in an effort to relieve them of the burden of loans.

This decision could give prospective students, especially middle-class students who aren't eligible for need-based financial aid, incentive to attend Princeton over other institutions.

But John Burness, senior vice president of public affairs at Duke, said most schools are not in a financial situation to compete with Princeton's decision.

"Princeton historically has funded virtually all its financial aid out of its endowment," he said.

"It has not had to dip into its operating budget."

Burness also said he is not worried about losing potential students to Princeton because many would be likely to pick Princeton over Duke.

He added that other universities might feel the need to adjust their own financial aid systems, especially other Ivy League schools, but that not many schools have the finances available to enact such a plan.

"It will create some pressure but probably, with the exception of Harvard and Yale within the Ivies and Stanford outside the Ivies, the endowments aren't going to be able to match what Princeton is doing," he said. "Each institution will have to determine how best to respond."

UNC Board of Trustees member Richard Williams said the high cost of attending schools like Princeton gives them a need to adjust financial aid programs in different ways than less expensive schools such as UNC.

"With (UNC) tuition so low, affordability is not a big problem," Williams said.

He also said he does not think the decision will affect the University's ability to compete for top students.

"I think that we're always going to be in a position to compete with the very best," Williams said.

"I don't think it will give Princeton an advantage over us."

He added that even with the grants, students will still have to pay a large amount to attend Princeton.

"It doesn't mean they won't have to pay anything, just that the financial aid will be in the form of a grant," Williams said.

But Princeton Director of Financial Aid Don Betterton said the school's decision will spark conversation about financial aid on other campuses.

"We (made it easier to get financial aid) three years ago, and we had (in) some sense, given our competitive stance and where we stand, that there would be action on other campuses," he said.

Betterton said he thinks Princeton's plan will cause other universities to examine their own financial aid programs to remain fiscally desirable to students also applying to Princeton.

He added that schools also will have to consider changes that are compatible with their schools' missions.

"The key thing is institutions should make the proper response for their population."

The State & National Editor can be reached at stntdesk@unc.edu.