The university will increase scholarship aid to next year's freshman class at Homewood by 25 percent and cut by more than a third the average debt new students will face when they graduate.
The changes are made possible by a 30 million commitment for financial aid announced last month by the chairman of the university's board of trustees, Michael R. Bloomberg (pictured at right).
Without increased scholarship aid in place of loans, the average graduation-day debt of undergraduate aid recipients in the Krieger School of Arts and Sciences and Whiting School of Engineering was projected to grow from $16,600 today--about double what it was a decade ago--to more than $21,000 when next year's freshmen are seniors.
The Bloomberg gift will reduce that average projected indebtedness by more than a third, beginning with the class of 2003.
To achieve that, the university will increase scholarships for next year's freshmen and succeeding first-year classes by an average of $4,000. Students whose expected parent contributions are calculated to be $3,500 or less will not be required to take out any loans at all in their first year; in their upperclass years they will be offered loans well below federal maximums. All other first-year students on Hopkins aid will receive smaller loans and larger scholarships than previously; most will not be required to borrow more than an average of $4,000 annually through graduation.
"Ideally, a family's finances should not be an insurmountable obstacle for a qualified student who wants to attend Johns Hopkins," President William R. Brody said. "We have long recognized that our present financial aid budget falls short of that ideal, and we are determined to do something about it. Mike Bloomberg's extraordinary gift is an important first step."
The board of trustees, chaired by the business news entrepreneur and founder of Bloomberg L.P., voted in May to make undergraduate scholarships and graduate fellowships the top priorities in the last two years of the Johns Hopkins Initiative, a $1.2 billion campaign.
Bloomberg then announced last month that he was raising his campaign gift to $100 million from the previously announced $55 million; $30 million of the new commitment is for those two priorities. Of that, $21 million will go to the plan for undergraduates in Arts and Sciences and Engineering. Another $5 million is for graduate student aid in the School of Public Health and $3 million is for graduate student aid elsewhere in the university. The remaining $1 million will be used for undergraduate assistance in the School of Nursing and the Peabody Conservatory.
The $21 million for Arts and Sciences and Engineering undergrads will be spent over 10 years, beginning in September 1999. During that time, the university will work to secure gifts from other donors to dramatically increase the permanent endowment for undergraduate financial aid. Spending the Bloomberg gift that way will enable the university to make substantial changes in financial aid packages beginning next fall rather than waiting until other donors make new commitments and then, over a period of years, fulfill their pledges.
In addition to cutting loans and raising scholarships, the Bloomberg gift will permit a change in policy so that entering Homewood students who win non-Hopkins scholarships--from corporations, fraternal groups or other private organizations--will no longer see a corresponding reduction in their Hopkins scholarships, said Robert Massa, dean of enrollment at Homewood. Instead, the university will further reduce the loan and work/study portions of the students' financial aid packages when appropriate, allowing them to benefit from their initiative in winning outside support.
Also, said Massa, the university will not reduce financial aid to those families who realize a family's tax savings through the new federal Hope Scholarship and Lifetime Learning Credits.
Though the Bloomberg money will be directed only toward newly admitted students, the university is also looking for ways to reduce the debt load incurred by currently enrolled students.