In what would be a dramatic turnaround, Haverford College is considering doing away with the "no-loan" financial aid policy it adopted in 2007, and again require middle-class students to borrow to finance their education.
If the board of managers adopts the proposal at its meeting in February, Haverford will become the latest school to retreat from a no-loans stance: Dartmouth and Williams backed off almost four years ago and Claremont McKenna just this year, all because each found they couldn't support the program.
Haverford would reintroduce a loan program for students from families earning over $60,000 a year. Current students, however, would be exempt from changes in the policy, as would students applying for admission this fall.
Students from families earning less than $60,000 would continue to be offered a financial aid package that the college deems would not require loans.
But officials at the small, highly selective liberal arts college with 1,205 students on the Main Line say the "no-loans" policy simply is too costly to maintain.
"There is not a voice on campus who doesn't believe this policy has value," said Jess Lord, dean of admission and financial aid. "The conversation is entirely centered around long-term sustainability in terms of budget management. The demographics are clear. The college-going population is going to be ever needier. Our financial aid budget will continue to grow significantly."
Only the most elite private colleges offer no-loan policies as a way to make their high-priced campuses more affordable and accessible to low- and middle-income students.
Princeton University in 2001 became the first nationally to offer a comprehensive no-loan policy for all those on financial aid, not just low-income students, and Harvard, the University of Pennsylvania and Swarthmore and other colleges followed suit.
The proposal drew immediate pushback from students, who formed a group, "Fords for Affordability," to oppose it.
"Higher education is becoming increasingly inaccessible to students and families that are struggling to make it work in this economy," said Emily Mayer, a senior history major from Berkeley, Calif.
Mayer, who attended a meeting Monday night where Haverford officials presented the proposal, said the change would deter some students from attending Haverford and could have an especially detrimental impact on the middle class. Tuition and room and board at Haverford this year is $59,236.
Under Haverford's proposal, students from families with incomes of $60,000 to $100,000 would pay $6,000 in loans over four years. Students from families earning between $100,000 and $150,000 would pay $10,000, and from families earning over $150,000, the amount would be $12,000.
Haverford doled out nearly $24 million in financial aid this year.
The proposal eventually would save the college $820,000 a year, but not until year four when all four classes would be under the new policy. In the first year, only a quarter of that amount would be saved.
Haverford has faced negative financial news in the last year. Moody's Investors Service in August downgraded the rating on its long-term bonds, because of a "slow recovery in the college's endowment" compared to similar private colleges and a "weakened operating performance."
"The portfolio has been further diminished by higher than average draws on the endowment to provide financial aid and to support operations," Moody's wrote.
Haverford's endowment stood at $387.6 million in 2012, down from $539.6 million in 2007 before the economic downturn, according to The Chronicle of Higher Education.
But Haverford spokesman Chris Mills said the most recent annual figure for June 30 was $434 million and that currently the fund stands at about $460 million.
Lord said Moody's report had nothing to do with the college's new financial aid proposal.
"We're constantly evaluating our financial aid policies," he said.
Students fear the new policy could deter prospective students from attending Haverford.
Ian Gavigan, a senior from Reading, said he would not have enrolled without the no-loan policy.
"I would have gone to Penn State," said Gavigan, a history and religion major. "This will make it harder for students like me and students in middle income brackets to even imagine going to Haverford."
Mayer and Gavigan also noted that many Haverford students already take out loans because their families can't cover the amount that the college calculates they can afford.