Provost Will Dudley’s discussion (pdf) of financial aid at Williams is equal parts useful and misleading. Let’s spend five days discussing it. Today is Day 4.

The loans that we package are for aided families whose income is above $75,000, and the amount of loan that we expect a family to take starts at $1,000 per year up to a maximum of $4,000 a year, based on family income and assets. It’s important to understand that a loan package is a recommendation. Families can and do choose to borrow more or less than we recommend. About half our families borrow what we suggest. About a quarter borrow more than we suggest, and about a quarter borrow less. So that’s some indication that our recommendations are pretty good.

Or its an indication that the recommendations suck and that measuring “need” is a farce.

This is the central fraud of “need-blind” aid: there is no good, objective measure of what each family “needs.” Yes, it is possible to make some gross generalizations: billionaires can pay the full sticker price. But, even though Williams has access to your tax returns and financial statements, it is still unable to accurately estimate how much money you will “need” to borrow.

And note that Dudley is still guessing misleading (or just clueless?) in his claim to know exactly how much “families borrow.” From the Wall Street Journal:

An increasing number of private student lenders are rolling out parent loans, which allow borrowers to get funds to pay for their children’s education without putting the students on the hook. … Colleges are helping push them in part because of a quirk in federal calculations. Unlike ordinary federal student loans, the parent loans don’t count on a scorecard in which the U.S. Education Department discloses universities’ median student debt at graduation. … Education Department spokeswoman Dorie Nolt said all private loans, whether given to students or parents, are excluded in the scorecard because the government doesn’t have access to private loan originations. She added that federal parent loans also are excluded because the scorecard focuses on undergraduate students.

Provost Will Dudley has only a rough idea how much “families borrow.” He doesn’t know about loans that parents take out. He doesn’t know about private loans.

Best part:

Colleges including Stanford, Boston College and Carnegie Mellon University are referring parents to the loans through emails or by putting them on lists of preferred loan options.

Does Williams? The Record should find out.

Back to Dudley:

There are schools out there that are “no loan,” meaning they don’t recommend that students borrow. But it doesn’t mean students at those schools aren’t borrowing. In fact, when you look at what students are actually borrowing per capita, even at the 44 best-resourced colleges in the country, they’re borrowing less at Williams than they are at a number of “no-loan” schools. More than half our students don’t borrow anything at all. The ones who do borrow are graduating with an average of about $15,000 in total debt. The national average is close to $30,000 for those who borrow.

Interesting. Comparing the borrowing rates at Williams with other elite schools would make for an great senior thesis. What predicts borrowing behavior? Note that the data landscape surrounding this issue has changed dramatically in the last few years, with the launching of the College Scorecard project. Dudley has amazing data about what students (not “families”) borrow in federal (not private) loans. (And, since most borrowing is done by students and from the Feds, this is good data.)

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