The Duke Endowment has pledged $15 million to Davidson College to help the college pay for its plan to eliminate student loans and help students graduate debt-free.
At a press conference on campus in the Lilly Family Gallery of Chambers Hall, Duke Endowment officials announced the gift – the endowment’s largest donation ever to Davidson.
The money will help kick-start Davidson’s campaign to raise $70 million for increasing its endowment enough to generate income to pay for grants instead of loans in student financial aid packages. College officials estimate the plan to eliminate loans will cost $3.5 million annually.
DAVIDSON PART OF A TREND
Davidson announced the new financial aid scheme in March. It is one of only a handful of colleges and universities nationwide to eliminate student loans. The decision was in part driven by a desire to maintain diversity in the student body and improve recruiting.
Russell Robinson, chair of the Duke Endowment, said the gift will help meet a pressing need and is in keeping with the goals of endowment founder James B. Duke.
“That plan addresses the increasingly urgent need in this country to make higher education equally available to all qualified students, without regard to their financial means,” Mr. Robinson said. “In addition, it is at the very heart of Mr. Duke’s general purpose of providing for those who are least able to provide for themselves.”
In a press release, the college said a recent study had found that its annual costs of $40,000 “has dissuaded students from applying to the college without ever exploring the financial aid program, assuming their families couldn’t afford it.”
Meanwhile, the college says demographic projections indicate that the largest portion of future applications are likely to come from families from low-income backgrounds, who traditionally need more financial aid.
Most of the money – $65 million – will help build Davidson’s endowment, which currently stands at $449 million, according to President Bobby Vagt (photo).
The Duke gift “is the cornerstone of our fund-raising for the remainder of the $70 million,” President Vagt said.
That campaign has already quietly begun. He said another individual donor whom he did not name has already made a $3 million gift toward the campaign.
Most of the work of that campaign will fall to Davidson’s new president, Tom Ross, who will take over from President Vagt this summer.
Meanwhile, another $5 million of the Duke Endowment grant will be “expendable,” which means the college can use it in the short term to help meet the $3.5 million annual cost of increasing grants.
Davidson’s change in financial aid policy means that all students – incoming freshman and existing students – will not have loans as part of their financial aid packages beginning this fall, President Vagt said in answer to a question.