In the fall of 2008, Williams College announced the replacement of student loans with grants and direct scholarships, a program designed to help students to prevent an excessive accumulation of debt while pursuing higher education.
Now, however, it appears that the school is on course to reverse this policy in the wake of the national economic meltdown and the resulting dramatic contraction of its formerly robust endowment. Many worry that the announcement presages a trend that will likely be embraced by a number of elite private colleges who recently implemented similar no-loan policies, barring a dramatic economic turnaround in the next few years.
Williams, which currently charges an annual tuition of $39,250 (plus an additional $10,000 or more for housing and fees), is already not the only school that's had to make the decision to cut costs. Two other schools, Lafayette and Dartmouth, have both announced decisions to raise the percentage of their students that will receive loans; both had also previously tried to gravitate toward no-loan policies.
Currently enrolled students will not be affected by the changes, and for students who enroll in classes at the college after the policy is put into effect, Williams has put in place a capped loan system which will be dependent upon the yearly income of the students' families. Families below a certain income will not be expected to take out loans, while others will have their needs assessed on a sliding-scale loan basis, also to be determined by income.
In a letter released last Sunday, Interim President Bill Wagner assured readers that the maximum loan amount on the sliding scale will still be "among the lowest in the country." When implemented, the program is expected to save the college $2 million annually.
While Williams has found it necessary to cut its costs, spokesmen were adamant that neither the school nor its endowment are in grave financial disarray. Said Wagner, "Williams is in a strong financial situation by virtually any comparison—except with the Williams of three years ago."
