President's Letter

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January 31, 2008

The early life of Alexander Hamilton is a vivid lesson about the power of philanthropy: it was the ­discernment and generosity of others that enabled a talented young person to acquire an education and eventually become one of the most influential minds in our nation's history.

His story resonates with me not only for its inspirational value and the compelling ways in which ­language, leadership and largesse intersect, but also because I, too, as the first in my family to attend college (indeed, my father had no more than a couple of years of high school), received an education through scholarships made possible by the beneficence of people unknown to me.

The story of Alexander Hamilton, moreover, exemplifies the ideals of the college that bears his name. Through its long-standing commitment to financial aid, Hamilton College is a school of opportunity for talented young people. Opportunity is as much a part of our heritage and our mission as the emphasis we place on helping students find their voice — much the way young Hamilton found his at another New York college over two centuries ago.

But recent announcements by Harvard, Yale and a few other colleges about the determination and ­configuration of student aid packages are redrawing the financial aid map. These developments, which have been variously reviewed and interpreted, will have an impact on the shape of higher ­education and the expectations of families across the country. This letter outlines our thinking about one important aspect of the discussion: the much publicized decisions by several institutions to eliminate loans from aid packages either entirely or for students from families below certain income levels.

How does Hamilton respond?

Our decision last March to reallocate $1 million from merit aid to need-based scholarships followed a careful study of predicted demographic and economic trends and was described by one higher education official as "a true act of leadership." One of the priorities of our Excelsior Campaign is to increase the College's endowment for scholarship aid. Our efforts were buoyed recently with the gift of a $1 million scholarship endowment for students who belong to the first generation in their families to attend college. Student financial aid will be even more central in future capital campaigns.

We are currently setting aside nearly $22 million for financial aid, which enables us to meet the full demonstrated need of every admitted student. Those funds provide an average financial aid package (grants, loans and work-study) of $29,200 for about half the members of our student body. Awards take into account family income and circumstances and make allowances for travel, books and incidental expenses. Most students on aid from Hamilton receive a loan in their financial aid package, and the average indebtedness for our most recently graduated class was $16,800 (the national average is $19,200) or less than 10 percent of the total cost of attending Hamilton for four years. As generous as our budget is for ­financial aid, however, we are not fully need-blind. This means that in a small number of admission decisions, a family's ability to pay becomes a factor.

The majority of the colleges and universities that recently eliminated loans from their financial aid packaging share two related assets: they are need-blind and they have endowments in excess of $1 billion.

There are those who argue that even if Hamilton met both those criteria — and they are surely desirable and mutually reinforcing goals — eliminating loans should not be our first priority. To be sure, loans allow us to make institutional aid available to more students, which is one reason we enroll a greater percentage of students on financial aid than many of our peer colleges. And when ­parents are making a significant financial investment in a child's future, and the college and its benefactors are making a ­similar investment through grant aid, it may be appropriate for students, too, to have a financial stake
in their education.

Yet, of course, the opportunity for students to graduate debt-free has significant appeal, especially amid concerns that academically qualified low-income students fail even to consider some of America's finest colleges for reasons of cost. So there may come a time when we at Hamilton move to eliminate loans from financial aid packages, but the College currently does not have the resources to do so.

Thus, I return to my question: How does Hamilton respond?

This topic is getting a great deal of attention on our campus, especially on the part of our dean of admission and financial aid, among senior staff, and in budget and finance committee meetings. It is also a regular subject of discussion at the quarterly meetings of the Board of Trustees. As we address these issues, we are carefully weighing our capabilities, our historic mission and our responsibilities to future generations of students. We do not have all the answers, but we are working with a set of fundamental principles:

      1.   We will continue to be a school of opportunity.

      2. We will continue to increase our financial aid budget and make this a priority in the next capital campaign.

      3. We will explore the possibility of becoming need-blind in admission so that we can enroll the strongest applicants, without regard to their ability to pay.

      4. We will remain committed to enrolling excellent students who are the first in their family to attend college.

      5. We will continue to assess regularly all institutional expenditures and to effect savings wherever feasible and consistent with our mission.          

Keeping higher education accessible to students from low- and middle-income families is a priority nationally and on College Hill. My colleagues in the Office of Admission and Financial Aid and I welcome your thoughts and suggestions.

Sincerely yours,

Joan Hinde Stewart