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Dreaming Out Loud

A seven-year initiative to shrink student debt takes a bold step forward.

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In the biggest commitment to financial aid in its 133-year history, Vanderbilt on Oct. 1 announced that it will eliminate all need-based loans and replace them with Vanderbilt grants and scholarships for all eligible undergraduate students with demonstrated financial need.

Starting in the 2009–2010 academic year, all undergraduate students—both new and returning—who normally would have received need-based loans as part of their financial aid package to meet their demonstrated financial need will qualify for this program. All seniors slated to graduate in May 2009, in addition, will have their need-based loans for the spring 2009 semester replaced with Vanderbilt grant/scholarship assistance.

“This step is in keeping with Vanderbilt’s commitment that ability, achievement and hard work—not a family’s financial circumstances—should determine access to a great education,” said Vanderbilt Chancellor Nicholas S. Zeppos in announcing the move.

During the past seven years, Vanderbilt has worked aggressively to reduce student loan debt, and this new initiative is the pinnacle of that strategy. Funding will come from a combination of strategic internal allocations and increased scholarship endowment, including an additional $100 million in gifts and pledges in new scholarship endowment that will need to be raised during the next several years.

“This ambitious goal gets at the very heart of what Vanderbilt is all about.”

~ Randall W. Smith, executive associate vice chancellor for development and alumni relations

“This ambitious goal gets at the very heart of what Vanderbilt is all about,” says Randall W. Smith, executive associate vice chancellor for development and alumni relations. Vanderbilt will be seeking new philanthropic gifts from alumni and friends for this initiative, he says. “As we look to the university’s future, the case for making education accessible is a compelling one that virtually everyone who cares about Vanderbilt appreciates and embraces.”

A top priority of Vanderbilt’s ongoing Shape the Future campaign has been increased scholarship support, paving the way for elimination of need-based loans in the financial packages the university offers to all eligible undergraduates. The Shape the Future campaign has been one of the sources that has allowed Vanderbilt to reduce students’ loan debt by 17 percent during the past several years, even as the cost of attending Vanderbilt has increased approximately 5 percent annually.

By eliminating need-based loans, notes Provost Richard C. McCarty, “We also free our students to consider choices about their careers or further study that they might have overlooked because of concern about the pressure of repaying student loans.”

Vanderbilt has determined not to impose specified income-level caps in deciding eligibility for the program. Vanderbilt’s policy is to admit students on the basis of their talents and ability, rather than their ability to pay. The university also commits to meeting 100 percent of students’ demonstrated financial need. In determining a student’s demonstrated financial need, Vanderbilt takes into account each student’s individual family circumstances and all educational costs such as tuition, fees, housing, meals, books and course materials; in addition, allowances are made for personal and travel expenses. With the additional investment by Vanderbilt, many students pay no more to attend Vanderbilt than they would to attend a college with a lower total cost. 

“Eliminating need-based loans is not only the competitive thing to do—it’s also the right thing to do,” says Douglas Christiansen, associate provost for enrollment and dean of admissions.

“We want everybody to know that Vanderbilt is affordable and accessible to every bright, hardworking youngster in the country.”

~ Chancellor Nicholas S. Zeppos

“The generosity and activism of those who are contributing to this massive need-based initiative reaffirm everyone’s passion for helping the most academically talented, diverse and engaged students.”

In the past few years, a handful of universities and colleges across America have announced similar initiatives—primarily top institutions with which Vanderbilt competes directly for students. Brown, Cornell, and the University of Pennsylvania offer need-based loan waivers for students from lower-income families. Harvard University offers free tuition to students whose parents earn less than $60,000 a year; Yale and Stanford have similar programs. Princeton and Dartmouth have also eliminated need-based loans in their financial aid offers based on demonstrated need, which most closely resembles Vanderbilt’s new expand-ed aid program.

At the same time, Vanderbilt has become both more selective academically, and more diverse culturally and geographically. Admissions applications jumped 31 percent for the undergraduate Class of 2012 over the previous year, according to Christiansen. Of the 1,569 students in this year’s entering class, 930 high schools are represented. Prior to enrolling, “most of our first-year students didn’t know anyone at Vanderbilt,” Christiansen says. 

“This bold step will allow Vanderbilt to continue recruiting the most highly achieving students in a very competitive way and will ensure a student body composed of young men and women of all economic, cultural and geographic backgrounds,” said Zeppos, “which will only further enrich the Vanderbilt experience for all of us.” 

For information about how this initiative will impact a specific financial aid award, contact the Office of Student Financial Aid at

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© 2015 Vanderbilt University | Illustrations: Cathy Gendron

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More Aid Will Expand Applicant Pool and Open Career Paths

As word spreads about Vanderbilt’s expanded financial aid announcement, the questions have been coming in thick and fast. Here are answers to some of the most common inquiries.

A college education has great value—so why is it such a bad thing to take out loans for something so important?

The prospect of repaying student loans leads some accepted students to decline their offer of admission from Vanderbilt, even when Vanderbilt was their first choice. Undergraduate students with significant loan debt often abandon dreams of future studies in graduate or professional school, or forego particular career choices. The pressure to pay off need-based student loans can become a real barrier to a desire to teach, or practice medicine in an underserved community, or work in a nonprofit or service agency—among many other career choices.

While Vanderbilt will replace need-based loans with grants/scholarships in eligible students’ financial aid packages, there will still be an expected family contribution for most students. Some families will choose to meet this contribution with loans. Likewise, some students may choose to take out loans to replace the expected work portion of their financial aid packages.

How much will this initiative cost?

The additional annual cost of this expanded aid initiative will level off at approximately $14.7 million once fully implemented for all undergraduate students. This is over and above the funding Vanderbilt already provides for undergraduate assistance.

How is Vanderbilt paying for this?

The additional funding will come from a combination of strategic internal allocations and increased scholarship endowment. Specifically, Vanderbilt will seek $100 million in new gifts and pledges for scholarship endowment as part of the university’s ongoing Shape the Future campaign.

How will this affect admission? What about legacy applicants—children and grandchildren of Vanderbilt alumni?

It is realistic to expect that this initiative will bring increased interest, especially from young people who may not have thought they could afford to attend Vanderbilt in the past.

Each candidate for admission will continue to receive a comprehensive review, based on a wide range of factors, including academic performance, test scores, extracurricular activities, essays, personal statements and letters of recommendation. Vanderbilt alumni and their families are valued members of the Vanderbilt community, and the university views legacy status as one of the many factors in the review process.

What about merit scholarships that are only based on academics and credentials? Aren’t they important to attract the best students to Vanderbilt?

While merit scholarships will continue to be awarded, need-based funding sources provide Vanderbilt with the ability to enroll students with exceptional credentials and financial need. Just as the overall quality of our entering classes has increased dramatically, so too have we seen an increase in the percentage of students with financial need.

How can I help?

Annual gifts from Vanderbilt alumni, parents and friends create the kind of learning environment that draws so many talented young people here and helps sustain Vanderbilt’s quality. Unrestricted gifts—generosity that is put to work right away for daily needs and priorities—help support all of the university’s and its schools’ priorities: scholarships and financial aid, excellent teaching, research opportunities, and new courses and curriculum.

Each of our undergraduate schools as well as the general university has a fund for annual scholarship gifts. If you can consider a larger gift, you can help Vanderbilt increase its scholarship endowment so that generations of future students will benefit.

To learn more about making a gift to support Vanderbilt and this initiative, contact

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