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- Grinnell, one of the country's wealthiest colleges, questions sustainability of financial aid
- Your Tub or Mine
Not So Need-Blind
WASHINGTON -- Imagine walking into a pricey hotel and telling the desk clerk that you intend to stay the night, but are willing to pay only as much money as you have in your pocket at the moment.
That is the prevailing assumption underlying how students and their families pay for expensive, private higher education, a group of admissions and financial aid officers said here Thursday morning at the College Board's annual forum. The model isn't sustainable -- for families or colleges.
"We are at a tipping point," said Don Bishop, vice president for enrollment management and financial aid at Embry-Riddle Aeronautical University in Florida, describing how soaring college costs and depressed incomes are squeezing students' capacity to pay for higher education.
Bishop pointed to economic data showing that, since 1985, the cost of attending a private college has risen at more than double the rate of household income. Put another way, the share of a median household's income that was devoted to paying for higher education went from 22 percent in 1988 to more than 50 percent today. Those increases continue, with tuition and fee hikes this year ranging from 4.5 percent to nearly 8 percent over last year. "Families are more stressed than they ever have been before," said Bishop.
Thursday morning's standing-room-only session, "Financial Discrimination: Time to Talk About It," exposed the dueling imperatives of honoring institutional mission and minding business realities. Veer too far to one side by trying to meet the full financial need of every student, and colleges may imperil their bottom line. Overcorrect the other way, and deserving students could be denied opportunity. Either option can exact long-range consequences -- financially, individually, institutionally and societally, the panelists said.
"As I look out over the next 10 years, I'm deeply concerned," said Rick Bischoff, vice president for enrollment at Case Western Reserve University. "Would it be better to have a smaller percentage of high-need students and not 'gap' them?" he asked, referring to the practice of admitting some applicants without offering them sizable enough aid packages to realistically make it possible for them to enroll. Or, he wondered, should Case Western make admissions decisions based on students' ability to pay, rather than doing what it does now -- judging students on a need-blind basis, but not actually covering their full need once they get in? "That would be a tough choice for us," he said.
One of his fellow panelists, Jim Swanson, director of financial aid for Colorado College, represents a college that already has made that tough choice. The small liberal arts college once admitted students without regard to their financial need, he said, but that practice began to change about eight years ago, under a new administration. The college became "more savvy and less flexible," said Swanson. Being more generous to students at the college would have the effect of drawing resources from other parts of the budget, he said.
As a result, the college's admissions process became "need-sensitive," which means the financial status of the students bears upon the college's ultimate decision whether to admit them. While very academically talented students will be welcomed despite need, said Swanson, those who land in the average range scholastically but are financially shaky will not get the same chance. "We did not want to enroll students under financial distress," he said.
If such a stance seems harsh, said Swanson, it's only because the college's desire to increase access -- however heartfelt it may be among administrators -- is increasingly colliding with fiscal reality. "There's simply not enough money to admit all eligible applicants," he said. "Choices have to be made.... I hate to say it, but it's pure economics."
Many colleges are in the same boat. A 2008 study released by the National Association for College Admission Counseling found that only 32 percent of public institutions and 18 percent of private ones meet the full financial needs of all students.
The panelists described such business-minded decisions as ultimately beneficial to students and their families. At Creighton University, where Bishop worked prior to Embry-Riddle, gap students dropped out at much higher rates than their peers, he found. Otherwise, it often falls to parents to pay more than they truly can afford for their children's college -- even when it's not in their own long-term financial interest. "We rely on the fact that parents love their children," said Bischoff.
Other solutions have also emerged. At Embry-Riddle, administrators tell those students who cannot afford the cost of attending right now that they should not come -- or that they should perhaps attend another school for two years and then transfer, said Bishop. Another strategy, increasing the number of international students, can be good for diversity and boosting the cosmopolitan character of a campus, while also feeding the bottom line, as these students apply without expecting to receive financial aid.
This problem does not seem to be plaguing the elite research universities the same way. Richard McCarty, provost of Vanderbilt University, touted his institution's ability to successfully pull off a tricky balancing act. He said Thursday at the offices of Inside Higher Ed that recent freshman classes exhibited more diversity and received more need-based aid from Vanderbilt, while also yielding a higher caliber of student. "They say you couldn't do all three," he said. "We have."
But that model has been possible only through generous assistance from wealthy alumni. McCarty said Vanderbilt was nearing the end of a $100 million campaign to raise money for need-based scholarships; the campaign has raised $87 million to date and will conclude in June 2011. Convincing alumni to invest in today's students has proven to be a more alluring fund-raising pitch than trying to raise money for other projects, such as capital campaigns, he said. "We're investing in our students," said McCarty. "I think that it's the right thing to do."
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