University of Virginia Library

The Yale Plan

Yale University announced late last week a
limited implementation of an extraordinary
"study now, pay later" plan for students who
are in need of financial aid. The plan, which
was devised in the 1960's in a variety of
quarters, would hopefully enable any student
who is accepted to attend Yale University
without concern for his particular financial
condition.

Although Yale will maintain its traditional
financial program with its direct grants and
short term loans for the first few years, the
school hopes in the future to rely on the new
program alone. Students would be able to
defer payment of tuition costs until they
begin to earn a living after graduation. The
money would be paid back by taking 0.4 per
cent of a student's yearly adjusted gross
income for each $1000 deferred. Graduates
will have to pay a yearly minimum of $29 per
$1,000 deferred, regardless of how much they
earn.

To avoid falling into the pitfall of
becoming an institution solely gearing its
students to material goals, Yale provides that
payments will stop after 35 years in any
event, even though low earning graduates are
still short of meeting their individual
obligations. Also, a graduate whose earnings
are much more substantial could easily "buy
out" of the program by paying what remains
of his own obligation. Female graduates who
become non-earning housewives will base
their payments on one-half the joint family
income.

On its face the Yale plan looks quite
attractive, especially to border line financial
in the country, plans to borrow from banks to
offset the tuition deferrals, and will set up a
reserve fund against possible future losses. In
spite of these measures, students will only be
able to defer $800 of the $4,400 costs next
year.

Kingman Brewster, President of Yale, said
in announcing the plan, "Such a scheme is
certainly no panacea or cure-all for university
deficits nor could it ever be a substitute for
other governmental programs." Most
universities, even the most wealthy, simply
cannot afford to undertake such a huge
capital program and still maintain its
academic position in the face of rising costs
and limited returns on their present
investments.

In 1967, a proposal constructed by a
presidential panelled by Jerrold C. Zacharias
of the Massachusetts Institute of Technology,
would have created a federal bank from which
students could borrow to pay for college bills.
cases and certainly to most parents. However,
it does considerable financial questions for
the university that tries to fund it. Yale,
which is one of the richest private universities
For both universities and students to be
bailed out of a spiraling financial dilemma,
there is a necessity for governmental support.

The Yale plan is revolutionary. If fully
implemented, the dream that anyone can go
the college without falling prey to financial
obstacles could finally be realized. It is
obvious, however, that if we are to reach this
goal, universities must receive a helping hand.

We urge officials of our University so
carefully analyze the strengths and
weaknesses of the program at Yale and to
begin probing our financial reservoirs,
including most notably the state of Virginia,
to see if we can move in this progressive
direction. With the increasing costs of higher
education, steps such as these at Yale must
soon be taken if education is going to be more
than the monopoly of the rich.