New State Aid, With Strings Attached

Private colleges in New York State criticized Governor Cuomo’s plan to give some of their students much more aid in return for limits on tuition increases and more money from institutions. But 30 are still opting in.

July 6, 2017
 
St. John's University

About one in three eligible private colleges and universities in New York have opted in to a new state student aid program passed this spring alongside the state’s more widely publicized free public college tuition program.

College leaders expressed significant reservations about the program for students at private institutions, which is called the Enhanced Tuition Award program and is seen by some as an imperfect concession to private colleges facing sudden pressure from the state’s new free public college program. Private colleges opting out of the Enhanced Tuition Awards have been criticizing residency and work restrictions for students, which linger for years after graduation.

Many are also pushing back against the financial structure of the awards, which require participating colleges and universities to match funding provided by the state. The new program is drawing flak for requiring colleges to freeze tuition for award recipients at the level of the first year they receive Enhanced Tuition Award funding. Some are unhappy with what they see as a rushed start months after most colleges finalized the financial aid packages for incoming students.

Even so, about a third of nearly 100 eligible private institutions opted in to the program. Administrators at those institutions say they were attracted to a new source of financial aid dollars and to the possibility of making college more affordable for students. Some of those opting out have left open the possibility of joining the program in future years.

The impact of the Enhanced Tuition Awards on the state’s higher education market is unclear. Many are skeptical it has enough funding or name recognition to give participating colleges and universities a competitive advantage. Even those who are taking part say they aren’t sure what to expect -- and many have limited their participation to a relatively small number of students or financial aid dollars.

Program Restrictions

The Enhanced Tuition Awards program carries many of the same restrictions as the state’s new -- and more widely discussed -- free public college tuition program, which is called the Excelsior Scholarship. Like the Excelsior Scholarship, the Enhanced Tuition Awards are being phased in over three years for students who are New York state residents. In its first year, students from families with adjusted gross household incomes of up to $100,000 per year will be eligible. The income cutoff will rise to $110,000 in 2018 before rising again to its ultimate level of $125,000 in 2019.

Also like the Excelsior Scholarship, Enhanced Tuition Awards come with work and residency requirements for students. Recipients of Enhanced Tuition Awards will generally be required to live and work in New York after graduation for the same number of years as they received Enhanced Tuition Awards. So if, for example, a student receives an award for three years, they will have to live and work in the state for three years after graduation. Moving out early would result in the student’s past awards converting to loans.

Both the Excelsior Scholarship and Enhanced Tuition Award also require most students to complete 30 credits in a year to remain eligible.

But some key differences exist between the two programs. Enhanced Tuition Awards don’t guarantee a student free tuition. They allow recipients to receive up to $6,000 through a combination of funding from New York’s existing Tuition Assistance Program, a new state award and a financial aid match from their private college. For those in the program, that could mean thousands more in aid per year, plus the benefit of not facing tuition increases that could add up to thousands over four years.

The state gives the example of a student who receives $1,000 from the existing TAP program. They would receive another $5,000 if awarded an Enhanced Tuition Award -- half from the new state program and half from their college.

Funding levels for the programs are also substantially different. New York allocated $19 million to fund Enhanced Tuition Awards for students at private colleges and universities in the program’s first year. It budgeted $163 million for the Excelsior Scholarship’s first year.

If the state receives more applications for Enhanced Tuition Awards than it has funding available, recipients could be chosen by lottery. State officials have also said students who are already attending college will receive priority over first-year students.

The state listed 30 private colleges and universities as opting in to the Enhanced Tuition Awards program. The state deemed a total of 96 institutions eligible. Those opting in don’t fit any one profile -- they range from the large, well-endowed Cornell University to religiously affiliated institutions like Yeshiva University to small institutions like Wells College and to institutions still accepting applications for the fall, like Niagara University.

Reasons for Opting Out

Those opting out of the program listed several financial and logistical reasons for doing so. Chief among them was the requirement that institutions match government awards. That can be a significant financial burden for small private colleges, many of which run on tight budgets.

“From an industry standpoint, the government is asking us to raise $20 million every year,” said Kenneth M. Macur, president of Medaille College in Buffalo, who was rounding up on the $19 million the state allocated for the program’s first year. “Take $20 million of our donor money.”

Medaille is not taking part in the Enhanced Tuition Awards program. Many have discussed the program as a way to keep the Excelsior Scholarship and its promise of free tuition at public institutions from destroying New York’s many private colleges and universities, Macur said. But he pointed out that very few private college students will be receiving the awards, given the program’s eligibility requirements and limited public funding.

Private colleges already offer large sums of financial aid, discounting their tuition deeply to be competitive, Macur said. They generally also have higher four-year graduation rates than public colleges, so he believes they can compete based on value.

Additionally, the Enhanced Tuition Awards will go out so late that they aren’t likely to be a factor in students deciding where to attend college this year, Macur said. The state had not yet posted applications for students to fill out as of Wednesday. Students will have 45 days to fill out applications, meaning awards will be made very close to the start of the fall semester.

Still, it’s not clear how students will view colleges that opt out of the Enhanced Tuition Awards against those that opt in. Medaille will keep an eye on enrollment trends to make sure students aren’t choosing to attend other private institutions based on whether they have opted in to the new program.

Other colleges and universities have pointed to the program’s credit and residency requirements as reasons for opting out. A Fordham University spokesman called restrictions placed on students “onerous and unrealistic” in an emailed statement.

“One gets the impression that the regulations' authors did not have a clear understanding of just how vulnerable these students are, and how crushing the regulations could be for them if family emergencies forced them to alter their plans,” said Bob Howe, assistant vice president for communications and special adviser to the president at Fordham.

Skidmore College, to the north of Albany, did not want to limit students’ options for moving and working after graduation.

“Particularly in today’s job market and professional world, opportunities are everywhere,” said Philip A. Glotzbach, Skidmore’s president. “We would like to have our students take advantage of those opportunities.”

It should be noted, however, that many of New York's less famous private colleges enroll students primarily from within the state, many of whom don't plan to move after graduation.

Some institutions simply could not sign up given the timing of the program’s rollout, according to Mary Beth Labate, the president of the Commission on Independent Colleges and Universities in New York.

“This is really a pilot to see if a program like this can work for students and for colleges and universities,” she said in a statement. “We look forward to continuing conversations with policy makers about making higher education even more accessible across the state’s diverse higher education landscape.”

Why Opt In?

But many of those opting in to the program said they felt it was important to give students a chance at additional funding. Cornell University is participating in the program, which it says makes it the only major research university in the state taking part.

“What we’re trying to do is provide as many options as we can to make Cornell an affordable, accessible education for all qualified students,” said Barbara Knuth, senior vice provost and dean of the Graduate School at Cornell. “I don’t think the motivator was comparing Cornell with other institutions that might choose to opt in to ETA, quite frankly. I think the comparison or analysis was that we’re trying to provide as many options as we can to our families.”

Cornell estimated that 650 of its currently enrolled students would be eligible for the Enhanced Tuition Awards. If all of those students were to receive awards -- no sure thing, considering they would have to apply and be selected -- the university calculated that opting in to the program could cost it up to $1.2 million per year in additional institutional grant aid, after factoring in TAP funding and new money from the state. (Cornell also operates three undergraduate contract colleges with students that are eligible for the Excelsior Scholarship free public tuition program.)

That’s not a small number, but it’s not overwhelming when considered in the context of the university’s overall institutional aid budget. Cornell will be providing all students with an estimated $239 million in grant aid next year.

The university will have to deal with other logistical factors, however. The Enhanced Tuition Awards program requires institutions to freeze tuition for awards recipients from year to year. Regulations require colleges and universities to continue to freeze tuition and provide matching funds to award recipients even if the institutions have opted out of the program for new students. That likely means a multiyear commitment from participating institutions. It also means more administrative work as colleges and universities deal with different tuition levels for different groups of students.

“It is more work for our staff,” Knuth said. “The bottom-line implication on staffing is we will likely need to deploy additional staff resources.”

The scope of additional resources required remains to be seen, she said. Other institutions are struggling to qualify exactly how much more work will be required. A spokesman for St. John’s University, which has opted in to the program, could not estimate a dollar amount that the university will have to spend. All he could say was that the program’s award-matching requirement and tuition freeze will require significant internal resources.

Still, the university’s president, Conrado Gempesaw, released a statement saying St. John’s felt it was important to pursue the newly available program.

“St. John’s University is investing significant resources in the ETA program in an effort to further bridge the financial divide that often exists between students and their dreams of earning a college degree,” Gempesaw said.

Cornell and St. John’s did not limit their participation in the new program. But some institutions did, saying they would only accept a certain number of students or commit to a certain dollar amount.

For instance, back in Buffalo, Canisius College President John J. Hurley has said the college will likely limit Enhanced Tuition Awards to fewer than 100 students. Hurley told The Buffalo News that the program was poorly implemented and conceptualized, and that it was not helpful for students who received financial aid offers in February.

The College of Saint Rose in Albany decided to take part in the program but capped its financial match at a total of $500,000, according to the Albany Business Review. The college said that as many as 900 current and incoming students could meet the award’s criteria but that it couldn’t accurately estimate how many would be eligible given the many variables involved.

The college sees its decision as a way to balance good financial stewardship against the need to make its education affordable.

“Our historic commitment to college accessibility and affordability was too compelling to decline to participate in a program that provides additional financial aid,” said the college’s president, Carolyn J. Stefanco, in a statement. “We could not overlook the return on investment for our students.”

A spokeswoman in Governor Andrew Cuomo’s office said the state is committed to working with independent colleges participating in the Enhanced Tuition Awards program in order to drive down tuition rates, increase institutional aid and make college affordable.

Some colleges opting out have left open the door to participating in the program in coming years. Syracuse University has said it will not take part in the program’s first year but it will re-evaluate that decision annually. Others, including the University of Rochester and Rochester Institute of Technology, have said they will reconsider in the future.

Skepticism is likely to remain among those who have opted out, however.

“As we looked at it this year, it just didn’t make sense for us,” said Glotzbach, of Skidmore. “The structural issues we discussed, assuming it doesn’t change, will still be there. It’s something we could consider, sure. I just don’t see it at this point.”

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