'Most Expensive' College Takes Steps Not to Be
If any college in the country had an incentive to respond to the growing pressure from politicians to make higher education more affordable, it might be George Washington University, which Forbes recently characterized as "the most expensive four-year university in the U.S. (and most likely the world)."
At a time when when college prices are topping the concerns of policy makers in Washington and in the states, it can't be helpful that when a reporter (not this one) asked an aide to the top Republican on the House education committee last week which colleges were most expensive, she unhesitatingly said, "Oh, George Washington University."
George Washington officials can quibble (as they do) that the university isn't really the most expensive in the country, given that since 2004, the institution has locked in its annual tuition for freshmen, so students face no increase in what they pay after their first year, and hence a four-year education there doesn't cost as much as it might at some other high-priced colleges. "I don't think it's true that we're the highest, but it's a fact that people will focus on the entering sticker and not the more complicated story," said Steven Knapp, who became George Washington's new president last August.
On his very first day in office, Knapp told his cabinet that George Washington needed to do far more to bolster the university's affordability, "so we don't get in the situation where some portion of the population cannot afford to attend." On Friday, GW joined the growing ranks of colleges announcing efforts to change their pricing and spending practices, unveiling a plan that focuses on moderating the growth of tuition for all students, while emphasizing affordability for the neediest students.
Even with its endowment of nearly $1.2 billion, the university can’t come close to matching universities like Harvard and Yale that have in recent weeks eliminated loans for students with incomes up to $180,000 and $200,000, respectively. In fact, that level of endowment doesn’t even put George Washington in the select number of colleges that are “need blind” in admissions, meaning that they don’t pay any heed to students’ financial need in deciding whom to admit.
“I’d ideally like to have the situation where nobody had to borrow money to attend the institution, but we don't have the endowment base to go that far” yet, Knapp said.
Instead, the plan the university announced Friday aims to significantly reduce the loan burden for all students through several steps. They include:
- Moderating tuition increases to keep them at or near the rate of inflation. First-year students at George Washington next year will pay tuition of $40,392, up 3 percent (the current rate of inflation) from the amount paid by freshmen this year. "That's the lowest rate anybody here can remember," Knapp said. GW will maintain its policy of locking in tuition for students after their freshman year.
- Reducing housing costs for students who show financial need. The university will cut the cost of on-campus living for 1,000 students by about 19 percent, so that for some of those students, total cost of attendance (when combined with the 3 percent tuition increase) will actually decline from this year's level.
- Lowering the debt burden for all students with financial need over four years to $20,000 from $29,000. The university will accomplish this by raising to the full cost of attendance the cap the university puts on the amount of institutional grant aid students can receive, and by eliminating a requirement that parents cover $2,000 above the federal expected family contribution.
George Washington plans to pay for these changes by quadrupling fund raising for financial aid to $40 million from $10 million over five years. The university will spend $118 million over all on undergraduate financial aid in 2008-9, with $6 million extra on new aid for freshmen.
Those changes are obviously a far cry from the sweeping and dramatic changes that institutions like Harvard and Yale have announced in recent weeks, which Knapp acknowledges George Washington isn't in a position to mimic. (Amid the critique from lawmakers that colleges aren't spending large enough proportions of their endowments on affordability efforts, he notes that GW has spent an average of 5.6 percent a year of its endowment funds over the last decade, more than many elite colleges and more than the 5 percent floor some lawmakers have proposed.)
But just because the university can't go as far as he would like does not mean it (or any institution) can afford to stand still, especially with increasing scrutiny from those a mile away, on Capitol Hill, Knapp said. "This shift cannot happen overnight, but this plan is a first step."