Eliminating student loans for low-income families: Amherst joins other colleges and universities in striving for economic diversity.

THIS SUMMER AMHERST COLLEGE (MASS.) BECAME the latest higher ed institution to eliminate student loans to low-income students. The new program substitutes scholarships for loans, ensuring that these students from families with annual incomes of $40,000 or less will graduate debt free. In making this commitment, Amherst joins Princeton and Davidson College (N.C.), two private IHEs that already have "no loan" policies. The latter's new policy took effect just this August and is being helped with a $15 million financial commitment from The Duke Endowment. (Davidson is one of four nonprofit institutions that have historically been assisted by the philanthropy.)

[ILLUSTRATION OMITTED]

Other public institutions have already made pledges to assist lower-income students. The University of North Carolina has the Carolina Covenant, which was expanded in 2004 to include families from 150 percent of the federal poverty level to 200 percent. Specifically, this promises a debt-free education to students from a family of four with an annual income of about $37,000, or a single parent with a child who makes about $24,000. The University of Virginia's program, "Access UVa," instituted in 2004, is supported by a $16 million annual commitment that replaces need-based financial aid with grants for low-income students, whom UVa defines as those whose family income is equivalent to 150 percent of the federal poverty line or less.

Such programs help higher ed institutions--especially selective private ones--achieve more diversity among their student bodies. They also give low-income students a better chance at attending graduate school or taking internships, officials note. The UVa Office of Student Financial Services adds that low-income students are more likely to default on student loans and have less family assistance to pay them back.

Nationally, college students borrow $53.8 billion per year to cover college costs, according to The College Board. The average debt for a student graduating from a four-year private institution in 2003-2004 was $19,500.

No loan programs require significant investment. Davidson reports that it will cost the college $3.5 million annually over the next four years to replace loans with grants. The cost for Amherst will be $3 million per year, says Stacey Schmeidel, director of public affairs. Such pledges are easier for well-endowed institutions to make, adds Samantha Veeder, senior consultant for Scannell & Kurz, an enrollment management firm based in Pittsford, N.Y. Amherst's endowment income--at $1.3 billion by June 2006--will help. So, too, will donors, who will be asked for support.