Northwestern University became the latest major institution to announce a significant overhaul of its financial aid program January 31 when it unveiled a plan to completely replace the loans in the aid packages of its neediest students with grants.

Eighty percent of the recipients of the new aid packages will be students with family incomes under $55,000, said Michael Mills, associate provost at Northwestern.

Although the initiative is similar in scope to the U of C’s Odyssey Scholarship program which was announced last spring and will provide no-loan packages to students with family incomes under $60,000, Northwestern’s plan will not specify an income cutoff. Instead, the plan will be based on financial need and will consider such factors as a family’s number of students in college, excess medical expenses, and employment status.

Northwestern also intends to limit the amount of student loans taken out by any individual student to $20,000 over four years.

The Northwestern development comes on the heels of similar announcements made in recent months by some of the nation’s wealthiest universities as they try to maintain an edge in the increasingly competitive market for the country’s top students.

Universities began scrambling in December when Harvard University, which has the nation’s largest endowment at nearly $35 billion, announced that it would begin offering generous financial aid packages to students from families earning up to $180,000 per year. The annual contribution by families in that bracket will be capped at 10 percent of the families’ income, with the percentage steadily decreasing to zero for students from families earning less than $60,000.

The University of Pennsylvania and Yale University soon followed suit, offering revamped packages that extend aid benefits to students from more solidly middle-class families.

The announcements come as the nation’s wealthiest universities have come under increased pressure from Congress to increase endowment spending, with some members questioning why universities consistently increase tuition costs at rates higher than the rate of inflation.

Last month, the Senate Finance Committee sent a letter to the nation’s 136 wealthiest universities, including the U of C, requesting detailed information about how universities have allocated financial aid, raised tuition, and managed and spent their endowments.

The decisions to increase financial aid have also been seen by some education experts as attempts by the wealthiest universities to appease some of these Congressional inquiries.

Universities’ procedures for determining financial aid eligibility have historically been viewed by many students as inadequate for determining financial need. American universities tend to rely heavily on income and assets, including the value of family homes, rather than considering other financial circumstances—a system that especially affects middle-income students. The determination of a family’s ability to pay is often much more than most middle-income families can afford without securing private loans.

Denae Dietlein, a sophomore at Northwestern University who formerly attended the U of C, was forced to leave the University because the College Aid Office did not consider her financially independent despite her family’s unwillingness to help pay for her education. She would have incurred over $100,000 in debt to finance her education, she said, and decided to move to Northwestern where the aid package she was offered was significantly more generous.

Dietlein lives with her mother but has little contact from her father, who she said has the financial means but refuses to pay for her education.

The College Aid Office requires all non-custodial parents to fill out a form to determine their ability to pay, and after reviewing her father’s information, ruled that Dietlein would be ineligible for aid.

Upon appealing the Aid Office’s decision, Dietlein was told by an advisor that she should consider “other options,” she said.

Similar situations are not unheard of in the College.

The College Guide to Financial Aid includes a page that addresses these unconventional situations, outlining that the University “expects your parents to provide financial support, according to their ability to do so, throughout your undergraduate years.”

This rule applies to both married and unmarried parents, said Michael Behnke, vice-president of College enrollment.

“The whole system is based on ability to pay, not willingness to pay,” Behnke said. “Parents divorce each other; they don’t divorce their children.”

There are some exceptions to the rule that are not included in the Aid Office’s policy statement, Behnke said. Parents who have a history of physical abuse or substance abuse as well as parents who are chronically missing may be excluded from financial aid calculations. However, the University requires some form of third-party corroboration, such as notification from a guidance counselor or social services representative.

Justin Tate, an 18-year-old first-year in the College, is considered an independent by the University despite living with his mother and stepfather. His mother is a drug addict, and though his father is in some ways financially supportive, Tate has never had a relationship with him.

When the College Aid Office asked for the required parental forms, Tate did not send them in. Instead he sent a letter outlining his situation, followed by an additional letter from his guidance counselor.

“The forms were too limiting,” he said. “The issue was too complicated.”

After receiving word from the University that his Free Application for Federal Student Aid (FAFSA) form was inadequate, Tate intensified his letter-writing campaign. Ultimately, he said, the University deemed him an independent student and offered him roughly $40,000 in grant money.

While Tate admits that he was surprised to receive the amount of aid that he did, Behnke stressed that for the University, financial aid is always a “fairness and balance issue.” University programs, he said, are more than a simple response to limited resources.

Still, for Dietlein, who wishes she still attended the U of C, the University’s aid policies could have been more considerate of special circumstance.

“I think that they should accept more options…I don’t think the U of C ever allows students to be unsupported,” she said. “It just doesn’t consider that as a possibility. It puts too much pressure on divorced families, but it’s common for families to be divorced.”