As part of its ongoing commitment to make high-quality undergraduate education more affordable, Duke University will eliminate parental contributions for families who make less than $60,000 a year and make it possible for students from families with incomes below $40,000 to graduate debt-free.
To help relieve financial pressures on the middle class, Duke also will reduce loans for students from families with incomes up to $100,000 and will cap loans for eligible families with incomes above $100,000. Officials estimate the new financial aid program will benefit nearly 2,500 undergraduates.
"The strength of the university depends on its ability to select and recruit students on the grounds of ability, dedication and promise, not on a family's financial circumstances," said President Richard H. Brodhead, who in his 2004 inaugural speech identified increasing the university's endowment for financial aid as one of his highest priorities. "We have deliberately focused these new investments on relieving the burden not only for parents with incomes below the national median but for students from middle-income families as well."
The university's Board of Trustees approved the significant investments in financial aid support on Saturday. Rather than phase in the changes solely for future students, they will take effect for all those receiving need-based aid who are enrolled during the fall 2008 semester.
Brodhead said the increased investment in financial aid was made possible with earnings on the university's endowment and funds contributed to Duke's Financial Aid Initiative, a $300-million fund-raising effort scheduled to end in December 2008.
More than 40 percent of Duke undergraduates receive need-based aid to help reduce their expenses. In 2007-08, the average need-based aid grant is about $26,700 out of a total cost of about $46,000. For more than a decade, the percentage increase of Duke's financial aid support has far outpaced the percentage increase of tuition.
In the current academic year, Duke has budgeted $73.3 million for need-based, merit and athletic financial aid for undergraduates. With the new program and other improvements, Duke expects to increase its aid by more than 17 percent to $86 million in 2008-09. The new initiatives are projected to increase average grant support $2,500 annually for each need-based aid recipient, reducing the average costs to these students and their families by $10,000 over four years. Duke is one of a limited number of schools with a "need-blind" admissions policy, which means that all U.S. applicants are accepted regardless of their ability to pay for college. Duke guarantees it will meet 100 percent of demonstrated financial need. Financial aid packages combine grants, loans and work-study opportunities after assessing what parents and students can reasonably contribute.
"With the changes we are making to strengthen support for students on financial aid, it actually may cost an eligible family less to attend Duke than a publicly supported university," said Jim Belvin, Duke's financial aid director.
Duke's new need-based financial aid program beginning fall 2008 will include these features:
-- Parents of undergraduate financial aid recipients with annual incomes less than $60,000 will not be expected to contribute to their children's educational expenses.
-- Students from families with annual incomes of less than $40,000 will have loans replaced by scholarship grants.
-- Students from families with annual incomes between $40,000 and $100,000 will have their loan packages reduced on a graduated basis.
-- Students from families with annual incomes of $100,000 or more will have loans capped at $5,000 a year.
-- Students with loan packages will no longer be expected to assume a larger loan with each year of enrollment.
In 2005, Duke launched the Financial Aid Initiative to raise new endowment of $230 million for undergraduate need-based aid, as well as $15 million for athletic scholarships and $55 million to support graduate and professional school students. Brodhead said about $240 million of the goal has already been received or pledged.
"Rather than hold off until the Financial Aid Initiative is completed and all pledges are in, we want our students who receive financial aid and their families to reap some of the benefit now," Brodhead said. "We could not have done this without the generosity of our donors -- and the confidence that they will continue to support access to a Duke education for bright young people who need financial aid to attend the university."