Loan Replacement Grants for Low- and Moderate-Income Students: A Typology of Programs

1. Loan Replacement Grants for Low- and Moderate-Income Students: A Typology of Programs Adam J.A. Lips University of Pittsburgh Association for the Study of Higher Education Conference Jacksonville, Florida November 8, 2008

2. Background • Postsecondary Enrollment Inequity • Low- and moderate-income students disproportionately in broad-access institutions • Financial Aid Trends as a Factor • Government shift from grants to loans • Institutional shift from need-based to merit-based

3. Background • Loan Replacement Grants (LRGs) • Eliminate or greatly reduce loan amounts • Target low- and moderate-income students • Over 50 new LRGs since 2003 • No standard definition • No system of organization

4. Background • Function of Typologies • Organize using characteristics • Highlight diversity • Facilitate future research • Non-hierarchical

5. Rationale • Define “Loan Replacement Grant” • Present Population of Active LRGs • Establish a Typology

6. Procedures • Search for Lower-Income Student Aid Initiatives • TICAS Project on Student Debt • Document Program Specifics • Award terms and conditions • Formulate “Loan Replacement Grant” Definition • Develop Typology Based on Characteristics

7. LRG Definition Institutions must: • Practice need-blind admission • Meet 100% of demonstrated need • Reduce or eliminate student loans by replacing them with grant aid ($19,000 loan max) • Publicize clear eligibility requirements • Base awards on need – no merit or narrow restrictions • Address direct billed cost with grant aid 49 Four-Year Institutions; 61 LRGs

8. LRG Programs

9. No-Loan LRGs Award Eligibility All Aid Eligible Income Level Eligible AwardComposition Work Included No Work Loan Cap LRGs Award Eligibility All Aid Eligible Income Level Eligible Award Composition Per-Year Cap Four-Year Cap LRG Typology of Programs

10. No-Loan LRGs

11. No-Loan LRGs Income Level Eligible, Work Included • Washington University in St. Louis • Families earning less than $60,000 • Need met with grant aid and federal work study Income Level Eligible, No Work • College of William and Mary - Gateway • Virginia families earning less than $40,000 • Need met entirely with grant aid

12. No-Loan LRGs All Aid Eligible, Work Included • Davidson College – The Davidson Trust • All students qualifying for financial aid • Need met with grant aid and federal work study All Aid Eligible, No Work • No Current Programs

13. Loan Cap LRGs

14. Loan Cap LRGs Income Level Eligible, Per Year Cap • University of Chicago – Odyssey Scholarship • Family income between $60,000 and $70,000 • Loan amount limited to $3000/year Income Level Eligible, Four Year Cap • Emory University – Emory Advantage • Family income between $50,000 and $100,000 • Loan amount limited to $15,000 over four years

15. Loan Cap LRGs All Aid Eligible, Per Year Cap • Massachusetts Institute of Technology (MIT) • All students qualifying for financial aid • Loan amount limited to $4750/year All Aid Eligible, Four Year Cap • University of Virginia – Access U.Va. • All students qualifying for financial aid • Loan amount limited to $17,000 over four years

16. Future Research • Effectiveness Studies • Program Proliferation • Comparison of Types • Program Sustainability

17. Loan Replacement Grants for Low- and Moderate-Income Students: A Typology of Programs Adam J.A. Lips University of Pittsburgh ajalips@gmail.com