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Over the last week, both Williams College and Dartmouth College have severely curtailed their “no-loan” policies, restoring loans to the financial aid packages of students with families above certain income levels. Both schools cited budget concerns, Dartmouth more than Williams.
 
Williams College was the first to announce the move last week. In an interview with Inside Higher Ed, the college’s Interim President William Wagner said that students with family incomes below about $40,000 would still be exempt.
 
“We are deeply committed to making Williams affordable and accessible,” said interim president William G. Wagner. But, he said, “We need to try to adjust it in some way to preserve our high levels of aid.”

Spending by Williams College on aid has grown from $14.6 million in 2000-2001 to $43.7 million in 2009-10. The reinstatement of loans is expected to accrue $2 million per year for Williams once fully in place.
 
Dartmouth followed suit on Tuesday, announcing that financial aid for families making more than $75,000 would have to include loans again. The move came with a host of other spending cuts made in response to a $100 million “structural deficit” at the college.
 
Restoring the loans was “necessary in the context of efforts to address the budget gap while minimizing layoffs,” according to an official Dartmouth announcement. The college has also announced plans for 38 non-faculty layoffs.
 
Students at both schools will be grandfathered into the old aid policy, meaning the new policy will only affect students beginning with the incoming class in the fall of 2010.
 
Many colleges and universities implemented no-loan policies over the last decade when their endowments thrived. Williams was among 30 competitive private colleges to do so in 2007 and 2008.

But now that endowments are shrinking and more students need aid, school budgets are getting pinched. The U.S. Department of Education received 20 percent more applications for financial aid in the first nine months of 2009 than it had the previous year.

And while many wonder how moves like Williams’ and Dartmouth’s will affect the accessibility of a private education to students from low-income families, not everyone thinks that charging rich families more makes the most sense.
 
Brian Rosenberg, president of Macalester College, has written critically about the issue. Last year in a column for Inside Higher Ed, he asked, “Does it make sense to eliminate loan expectations based on family income level rather than post-graduate plans, so that…[those] who go to work for investment banks will be loan-free while [others] who join Teach for America will have loan burdens—based purely on the level of family income when they enrolled in college?”
 
Rosenberg is one expert who expects to see many no-loan schools bring them back. So is David Kane, a Williams alumnus, and he wrote that prediction in his personal blog devoted to Williams issues: “Other colleges will follow Williams’ lead and add back loans for financial aid. Look for Amherst, Bowdoin, Dartmouth and Haverford in the first wave.”
 
One of those predictions has already come true.

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