Joel Carstens, university director of financial aid at the University of Pennsylvania, may be new to campus, but he’s no stranger to the Ivy League and the financial-aid challenges of its schools and students.

Formerly at Princeton University, Carstens joined Penn in September, ready to meet the challenges of serving undergraduate students at a much larger university and in an economy that is still fragile.

“There are only eight of these positions in the country, and I am humbled and honored to be in this group,” he said, referring to the Ivies, several of which were among the first colleges and universities in the country to offer no-loan financial-aid packages.

As the U.S. economy stalled and other peer institutions discontinued or scaled back their commitments to no-loan financial aid for undergraduates, Penn has stayed the course.

“Penn has seen the numbers of socio-economically diverse students rise over the past four to five years,” Carstens said, “and our aid program is assisting more families than ever.  In addition, due to the recession, many families started to feel financial pressure; more families who previously could afford the full cost of Penn needed assistance, plus those families who previously required assistance, needed a little more.  Penn’s aid program has met this challenge without requiring undergraduate students to borrow.”

As part of the Penn Compact’s goal of increasing access to a Penn undergraduate education, the Office of Undergraduate Admissions continues to recruit and admit students from broad socio-economic backgrounds. To assist this endeavor, Penn has a relationship with two outside groups, KIPP and QuestBridge, that identify high-achieving students from lower socio-economic groups, help them with the college-selection process and, in partnership with Penn, help them thrive while they’re in school.

“It is our firm belief, from President Amy Gutmann and the Board of Trustees, that our no-loan program is the right thing to do nationally and the right thing to do for Penn,” he added. “Penn has never waivered from its commitment to its no-loan financial aid policy for undergraduates with need,” he said. “We’ve simply allocated the resources necessary because it’s the right thing to do.”

Those resources include an undergraduate financial-aid budget of $181 million for 2012-13, an increase of $13 million from 2011-12.  Since Gutmann took office in 2004 and made increasing access to Penn one of her primary goals, Penn’s financial-aid budget has grown by 129 percent.

Carstens credits Penn’s $3.5 billion Making History campaign that includes $350 million for undergraduate scholarships, with bolstering Penn’s ability to continue its no-loan financial-aid policy.

“Five to 10 percent of our grant aid previously came from endowed resource,” he explains. “That’s now up to 20 percent, thanks in large part to the generosity of people who fervently believe a Penn education should be affordable to all talented and hard-working students. Growing our endowment dedicated to undergraduate financial aid has helped Penn meet this objective.”

Carstens said that in 2005-06 Penn undergraduate aid recipients represented 37 percent of the student body.  By 2011-12, that share climbed to 48 percent, an increase he considers “substantial and one that reflects Penn’s focus on access and affordability.”  

There is no typical Penn student receiving aid. The families with aided students range from those making less than $20,000 a year to others making more than $200,000. The students’ aid packages include only grants and a work expectation. Since students reapply for financial aid each year, they have the annual opportunity to let Penn know where their families stand and if circumstances have changed.

Carstens’ staff examines the qualitative and quantitative aspects of families’ financial situations before making a decision on aid. He said that his office is happy to explain aid decisions and listen to family concerns. 

“We want to make the aid process transparent to students and families, so students can choose Penn for reasons other than finances.”

The financial-aid Web site includes helpful information for students about Penn’s program as well as resources students and families can use to help finance their Penn education. 

Penn’s aid program includes a 16-member counseling staff to provide students the financial guidance they need and recently implemented a free, online financial literacy program, available to all Penn students, called CashCourse.

Carstens said some undergraduate families still choose loans to help finance the cost of education, even though Penn doesn't require them to.  Families may choose loans for a variety of reasons, including the ability to distribute their family contribution over a longer term or for specific academic enrichment activities like summer study-abroad programs.

Penn did a lot of research before moving in the direction on no-loan financial aid so that even in lean times the University is able to continue this commitment. 

“We believe there are things that families need that we can provide, that we can help find a way to make their dreams possible,” Carstens said.  “Our greatest challenge is to continue to be generous and do everything we can to help each family, but at the same time remaining fair to all.”