Cornell University will eliminate the need for student loans for students whose families make under $75,000 a year starting in the 2009-’10 academic year, the university announced Thursday.
Families with incomes between $75,000 and $120,000 will have their loans capped at $3,000 a year. For the 2008-09 transition period, families making between $60,000 and $75,000 will have their loans capped at $3,000, but the rest of the initiative will remain the same, the university said.
Cornell is the fifth Ivy League school to announce a new financial aid initiative since December.
Harvard led the pack in December, announcing that it would reduce the parental contribution expected of families making up to $180,000 and eliminate the need for student loans for all families.
Yale followed in January, announcing that it would reduce parental contributions for families earning up to $200,000 and also eliminating the need for student loans.
The University of Pennsylvania said in December it would eliminate all student loans from aid packages by fall 2009. Dartmouth College and now Cornell have announced a partial elimination of student loans but, like Penn, have not reduced expected parental contributions.
Yale Director of Student Financial Services Caesar Storlazzi said while Cornell is only reducing student self-help levels — by increasing aid packages so that students no longer have to take out loans — for a select group of students, Yale has done this for all students on financial aid.
“Yale’s total financial aid initiative package is more generous not only because we have adjusted self-help levels for all income groups, but we have also changed the way we calculate parent contributions,” Storlazzi said in an e-mail.
Cornell’s initiative, which is expected to affect approximately 4,500 students, will increase the university’s total annual financial aid budget by an additional $14 million when fully implemented, according to the university’s statement.
In 2007-08, Cornell expects to spend $116.8 million on undergraduate financial aid, 94 percent of which will be spent on grant aid.
Cornell Provost Carolyn Martin said Cornell and other universities face a challenge of ensuring access while not undermining the traditional funding model for higher education that includes investments from state and federal governments and philanthropy.
“The point is not to make higher education a free good or to shift the responsibility for funding it disproportionately to universities, few of which can afford to eliminate or cap student loans and all of which are being asked to do more and more for our communities and the larger society,” Martin said in a statement.
Yale has an endowment of $22.5 billion, while Cornell’s endowment is at $5.5 billion.
Cornell also announced Thursday that undergraduate tuition will increase by 4.9 percent, to $36,300, for out-of-state students. This figure does not include room and board, which will increase by 4 percent next year.
Yale said in January that it will tie the increase in tuition, room and board charges next year to the expected level of consumer price inflation, 2.2 percent. For the past few years, the University has increased these costs by about 5 percent a year.
For the 2007-’08 school year, Yale tuition, room and board total $45,000.