Do you wonder how you are going to pay those student loans? Two University announcements last spring might give you heartburn. Or encouragement.
First, undergrad tuition, room and board (TRB) will increase 5.4 percent for 2007-08, up nearly $2,500 from 2006-07. The TRB for 2007-08 is $44,477, including $35,187 for tuition and $9,290 for average room-and-board. In 1978 when Notre Dame first described itself as "A National Catholic Research University," TRB was $5,180. If the rise in that 1978 TRB had kept pace with the rise in the Consumer Price Index (CPI), the 2007-08 TRB would be $16,368. The rise beyond the CPI is partly due to factors beyond University control. The main reason, however, is Notre Dame's drive for acceptance as a Great Research University. The traditional focus of Notre Dame had been on undergrad education, with research and grad studies playing an important but balanced role. The drive for Research Greatness involves reduced teaching loads for faculty, more grad students as teachers and other effects including the paving-and-building mania that has converted the formerly pastoral Notre Dame into an imitation urban campus.
Like other universities, Notre Dame has financed its research ambition by raising tuition. Its budget, as a former Provost observed, is "tuition driven." Notre Dame's excellent Office of Financial Aid does an admirable job of distributing aid to students who could not attend Notre Dame without it. Unfortunately, loans are an integral part of the typical aid package. Heavy loan burdens can distort the career and family choices of Notre Dame grads.
Which brings us to the second announcement. In May, the University announced the largest fund-raising program in the history of Catholic higher education. The Spirit of Notre Dame campaign seeks $1.5 billion, of which $887 million had been raised at the time of the announcement.
The campaign allots $250 million for undergrad scholarships and $40 million for graduate fellowships. "We would like," said Vice President John Affleck-Graves, "to move every student who is on one loan to no loan, and every student who's on two loans to one loan. The worst case for a student in need at Notre Dame at the moment is a two-loan package."
About two dozen major universities have moved to replace loans with university grants for low-income students. Princeton University, however, in 2001 expanded its "no loan" policy beyond low-income students to all students entitled to aid. Princeton's tuition of $33,000 did not increase for 2007-08 although room-and-board did increase. Princeton TRB is $43,980 - less than Notre Dame's.
Princeton's total "no loan" program belongs at Notre Dame. No Princeton student is required to take a loan as part of his or her aid package. The amount a student normally would borrow is replaced with an increase in the Princeton grant. The full need of every undergrad is met through Princeton grants, scholarships from external sources and a campus job. In 2006-07, 52% of all undergrads received financial aid, with an average aid package of $30,750, including $2,200 in campus jobs. The total scholarship budget is $71.9 million. About $52 million comes from endowed scholarship funds and the rest through annual giving and other current-use support. Students can borrow for personal needs. The median family income of students receiving financial aid is $90,400.
Compared to the national average of $20,000 of debt for graduating seniors, Princeton grads have an average total debt of $2,360. Two-thirds of the class of 2005, the first to enroll under the no-loan policy, reported that graduating with little or no debt "had a significant impact" on their ability to pursue further studies and seek teaching or other service-oriented jobs. "Since I have no debt," said one grad teaching in a high school, "I have time to make wise decisions about my future after Princeton and to pursue my true interests. I probably would not have chosen to become an educator if I was burdened with loans."
A Catholic university is uniquely obliged to free its grads from onerous debt. The only middle-class students now at Notre Dame tend to be ROTC students, scholarship athletes, faculty and staff children, recipients of academic or special scholarships and those who are willing to come to Notre Dame at the price of crippling debt. Princeton has about 5,000 undergrads with an endowment of $13 billion compared to about $3 billion for Notre Dame. To emulate the Princeton plan here would be a daunting task. But it is difficult to imagine that Notre Dame alumni would not respond abundantly to a commitment, as part of the Spirit of Notre Dame campaign, to adopt the Princeton no-loan program. Notre Dame grads should be a leaven in society. Notre Dame should not consign them to life as loan serfs to the government or to Sallie Mae or other private lenders whose interest rates can approach the confiscatory. This is one case where we ought to imitate the Ivy League.
Professor Emeritus Charles Rice is on the Law School faculty. He can be reached at rice.1@nd.edu.
The views expressed in this column are those of the author and not necessarily those of The Observer.
