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New Loan Policy: FAQ
What is the purpose of Wellesley’s enhanced financial aid policy?
Wellesley is committed to making education affordable to students, regardless of their families’ financial circumstances. Considered one of the most socio-economically diverse colleges in the country, Wellesley has a long tradition of need-blind admission for U.S. citizens and permanent residents. The College meets 100% of a student’s demonstrated need; 55% of our students currently receive financial aid. Our new loan policy is part of our long-standing commitment to serving students and families.
Who is eligible?
Students who qualify for financial aid under Wellesley’s institutional policies on financial aid will be considered under the new loan policy.
How will Wellesley’s enhanced financial aid policy benefit students?
This enhanced financial aid policy eliminates loans for Wellesley students who have the greatest financial need and for whom debt after graduation can be an issue. It lowers loan packages by one-third for many other students. Specifically, the policy:
- Eliminates loans for students with the greatest need, students from families with calculated incomes under $60,000. These families have a limited ability to pay Wellesley’s costs.
- Lowers loans by one-third for students from families with calculated incomes under $100,000. Their packaged loans total $8,600 over four years.
- Enables eligible students from families with higher incomes to continue to benefit from Wellesley’s standard low loan package, which sets the packaged four-year student loan debt at a very manageable level of $12,825.
Who is eligible to have their loans eliminated or reduced?
Any student who qualifies for aid under Wellesley's institutional policies is eligible to have her loan eliminated or reduced if she meets the criteria.
A student is eligible to have her loan eliminated if her family’s calculated annual income is under $60,000 and parental contributions are less than $7,000. (In calculating the parental contribution, Wellesley considers both income and assets, thereby reflecting a full picture of family finances.) Students in this category will receive increased Wellesley grant aid – that is, monies that do not have to be repaid.
A student is eligible to have her loan reduced if her family’s calculated annual income is under $100,000 and her parental contribution is less than $28,000. (In calculating the parental contribution, Wellesley considers both income and assets, thereby reflecting a full picture of family finances.) Loans for students in this category total $8,600 over four years. Grant aid makes up for the reduction in loan amount.
What if students do not qualify to have their loans eliminated or reduced?
They will continue to benefit from Wellesley’s standard low loan packages, with a four year debt of $12,825. This amount of debt is low relative to the aid packages of many colleges and universities. It is, in fact, significantly lower than the aggregate loan amounts in the federal student loan programs.
How does Wellesley calculate parental income?
When calculating parental income, Wellesley includes both taxed and untaxed sources of income. Taxed income includes such sources as earned income, interest income, and income from dividends. Untaxed income includes yearly contributions into 401/403 plans, cash flows from businesses and rental properties, corporate profits, and so on. The level of parental income also includes income from the noncustodial parent if parents are no longer together.
Click here for additional information about parents' income and assets
Does this initiative mean that, if a student qualifies to have her loan eliminated, she cannot have loans or will never have them in her financial aid package?
No. A student may choose to borrow to help with expenses. Typical situations include the following: a student with a heavy course load chooses to take a loan instead of Work-Study; a student studying abroad borrows because she cannot work abroad. Continuing students who miss renewal deadlines will have higher loans packaged if they have not requested extensions. Finally, a student can request a review of her financial aid offer, and a loan can be part of her new package.
These situations can also affect the loan amounts for students in the reduced and standard loan categories.
How will the new loan policy interface with the relatively new policy of expanded access to study abroad?
Students who study abroad cannot work abroad; therefore, a loan is packaged in the amount that they would have had in work-study had they remained on Wellesley's home campus.
How will the new loan policy affect outside scholarships?
Wellesley students who are awarded outside scholarships continue to receive the fullest possible benefit of these scholarships. We use outside scholarship aid to reduce the “self-help” portion of a financial aid package – that is, student loans, Work-Study, and student contributions from summer earnings, before making any reduction in grant aid.
Over the summer, students let us know about their outside scholarships and how they want their self-help reduced. Students with no loans or reduced loans will have less self-help from which to subtract the outside scholarships. We will work with them individually to answer any questions that they might have.
Will students be in the same loan category in future years?
Students reapply for financial aid each year. Wellesley evaluates each student’s financial aid application individually, considering many factors in addition to family income in determining the level of aid provided. Some of these factors include a family’s medical expenses, siblings in college, and regional differences in costs of living.
Depending on a family’s financial circumstances, the financial aid award may vary from year to year. As a result, the amount of a student’s loan may vary from year to year. For example, a student with a reduced loan package may have her loan eliminated if her family has had financial reversals. If finances improve sufficiently, the standard loan would be packaged for the upcoming year.
In order to keep as many students as possible in their no-loan or reduced-loan categories, Wellesley will review the income cut-offs and parental contribution cut-offs each year.
How does this policy benefit Davis Degree candidates?
Yes. Davis Degree candidates who are self-supporting will be evaluated relative to the new loan policy on the basis of their income and calculated contribution.
How does this policy benefit international students?
All international students who receive financial aid will have their loans eliminated and replaced with Wellesley grant aid. There are no stipulations about family incomes or contributions. This decision recognizes the difficulty faced by international students who return to their home countries and must repay a student loan. Exceptions include study abroad and aid applications completed past the deadlines.
What is the effective date and are students in all years of study included?
The effective date is 2008-2009. Yes, the policy applies to all students – first-year as well as all returning students.
What about students admitted under the Early Decision plan?
This spring, we will re-evaluate the financial aid awards of Early Decision students (admitted in December 2007 for enrollment in September 2008) in relation to the actual cost of attendance for 2008-2009, the 2007 federal income tax forms, and the new financial aid policy concerning loan levels. Students admitted under the Early Decision plan will receive new aid letters for the upcoming year. If a student qualifies to receive a no loan or reduced loan package, she will receive it.
Starting in the fall of 2008, we will review all Early Decision aid admits in relation to the new loan policy when we initially read the financial aid application.
What exactly are the loan levels for 2008-2009?
Eliminated Loan Reduced loan Standard Loan
First Year $0 $1,600 $2,625
Second Year $0 $2,000 $3,000
Junior $0 $2,500 $3,500
Senior $0 $2,500 $3,700_
Total $0 $8,600 $12,825
Wellesley is committed to keeping student loan levels low so that financial concerns do not limit a student’s choices upon graduation. Students typically have 10 years to pay off loans in manageable monthly payments. The loans are either low interest federal student loans or low interest student loans from Wellesley College.
Student Financial Services
Created: February 13, 2008
Modified: September 10, 2008
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