Students nationwide faced financial challenges large and small as they responded to Covid-19 this year. Job losses. Last-minute travel home. Unexpected quarantines. Grinnell College last year paid $10 million in additional financial-aid dollars, parsed out through various support programs, to help.
On Tuesday, Grinnell campus leaders announced they would spend $5 million more annually to shift those incremental efforts into a big one — removing loans from financial-aid packages and replacing them with grants. The college is among the first to directly cite Covid-19 as its reason for changing its financial-aid policies.
Anne F. Harris, the college’s new president, spoke with The Chronicle about the shift. Here’s a summary of what she told us about the project, and three takeaways on what it required, the potential impact on retention, and why this kind of effort makes an outsize difference in students’ lives.
1. Grinnell is reallocating $5 million, partly buoyed from endowment returns, to make this happen. While the pandemic was a trigger, a review had been in the works for more than a year.
The additional annual $5 million is coming from Grinnell’s current operating budget, supported by endowment returns, tuition revenue, and philanthropy. Harris attributed the ability to make this investment to strong endowment performance and alumni giving, but there were other budgetary shifts, too. Harris said the college did not touch personnel, wages, or benefits to increase the financial-aid allocations.
In 2019, well before the pandemic, Grinnell’s past president convened a task force on student financial support. That group identified the college’s incremental approach to aid. “There was a fund for this, a fund for that,” Harris said.
Campus leaders this year allocated $10 million new financial-aid dollars, distributed incrementally for unexpected travel, technology, and emergency needs. They realized it would take just $5 million annually to move to a no-loan policy.
2. The college is making a five-year commitment. What happens next?
In October, the University of Connecticut announced it would pause a free-tuition program for low-income, in-state residents because of financial challenges from the Covid-19 pandemic.
Grinnell experienced similar challenges after the 2008-9 recession. In the immediate aftermath of that financial crisis, the college enacted a $2,000 annual loan cap to help students and families afford the private liberal-arts college. As pressures on the institution’s finances and operating budgets grew, it later moved to a graduated model, limiting loans to $3,500 in the first year, $4,500 in the second year, and $5,500 afterward.
Harris said Grinnell’s no-loan program, which is budgeted in for the next five years, depends on steady revenue from endowment returns, alumni giving, and enrollment.
“That was really important in the planning, that we can sustain this,” she said.
3. Student loans are deeply stressful, especially in a pandemic. A decision like this can free students from anxiety, packed work schedules, and uncertainty — and it’s a sign of the times.
The day before Grinnell’s announcement, a famous graduate took to Twitter as higher-education wonks debated whether the government should cancel a large amount of graduates’ student debt, as some Democratic lawmakers have proposed.
“It took me over 10 years to pay back my student loans,” wrote Kumail Nanjiani, the comedian who starred in The Big Sick and graduated from Grinnell in 2001. “I would be thrilled if fewer people had to live with that stress.”
Student focus groups had identified that stress to Grinnell’s task force, and advisers saw the same challenges in their students, Harris said.
Academic advisers asked, what’s stressing you out? “It was the loans. The loans just kept coming back over and over again. They cast a very long shadow,” Harris said.
She now wonders how if a no-loan policy will improve retention numbers, and what academic, research, or off-campus pursuits students will take advantage of without this stress.
