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A sign reading “Free Tuition” is situation on a pile of money in front of an ivy-clad wall.

Wealthy colleges have invested millions in expanding financial aid over the past year, a boost some say is tied to last summer’s affirmative action ban.

Photo illustration by Justin Morrison/Inside Higher Ed | Smithsonian/rawpixel | Sonny Sixteen/Pexels | Richard Darko/Getty Images

The sticker price of a college degree is higher than ever, with several private institutions nearing a total cost of $100,000 a year. But at some of those same institutions, the country’s wealthiest and most selective, the past year has also been one of pronounced growth in financial aid programs—thanks in part to the Supreme Court’s ruling against affirmative action last June.

Last month, Dartmouth College nearly doubled its annual family-income threshold for students to qualify for free tuition, room and board, from $65,000 to $125,000. In February, Vanderbilt University expanded its free-tuition program to include all families making less than $150,000, and will give extra support on room and board fees to many more. The University of Virginia and the University of North Carolina broadened their free tuition programs to cover in-state students from families making less than $100,000 and $80,000, respectively.

Following the Supreme Court’s decision, many observers predicted that colleges would adopt race-neutral alternatives to boost diversity, including a heightened focus on increasing socioeconomic diversity. When Duke University announced a free tuition program for families from the Carolinas making less than $150,000 just one week before the ruling, Christoph Guttentag, dean of undergraduate admissions, was coy but not dismissive of the connection.

“Diversity is not one-dimensional,” he told Inside Higher Ed at the time. “It manifests in various and interconnected ways.”

Doug Christiansen, Vanderbilt’s dean of undergraduate admissions and financial aid, told Inside Higher Ed that his university had been pursuing all kinds of diversity—socioeconomic and geographic, as well as racial—for many years, but last summer’s ruling made affordability key to maintaining that diversity.

“We are committed to having a racially and ethnically diverse campus,” he said. “We’ll follow the law. But that doesn’t mean we cannot think about the importance of how we’re recruiting a diverse array of students and how we yield those students.”

Richard Kahlenberg, director of the Progressive Policy Institute’s American Identity Project and a longtime advocate for class-based affirmative action, said there’s an undeniable connection between the court case and the expansion of financial aid at colleges most affected by it.

“Plenty of financial aid initiatives were announced before the decision, but the trend seems to have really accelerated since,” he said. “Universities do care about racial diversity. When they can’t pursue it directly, they’ll do so through financial aid.”

What’s Affirmative Action Got to Do With It?

After last June’s affirmative action decision, Princeton University formed an ad-hoc committee to examine undergraduate admissions policies and recommend lawful approaches to diversifying classes.

Last month the committee released a preliminary summary of recommendations for how the university might “act vigorously within the law to achieve the racial and other forms of diversity that are essential to Princeton’s excellence and America’s future.”

“In the changed legal environment, the University’s greatest opportunity to attract diverse talent pertains to socioeconomic diversity,” the report said. A Princeton spokesperson told Inside Higher Ed that the university is working on plans to put that recommendation into action.

Christiansen, who joined Vanderbilt 18 years ago, said that he’s been preparing for an affirmative action reversal for decades. In 2003’s Grutter v. Bollinger case, the Supreme Court ruled narrowly in favor of affirmative action as a means to correct historic racial discrimination in higher ed. Conservative justice Sandra Day O’Connor, who delivered the majority opinion, wrote, “The Court expects that 25 years from now, the use of racial preferences will no longer be necessary.”

“For years now, everyone anticipated something may come to pass with the Supreme Court,” Christiansen said. “There was a precursor of having to really think about how to sustain our value of a diverse community—whether race can be used in a holistic admissions process or not, we had to prepare for any eventuality.”

Kahlenberg said the recent surge in financial aid at private universities “reflects a long history” of similar tactics from public universities over the decades.

Texas outlawed affirmative action at public institutions in the 1996 Hopwood v. Texas case, and a few years later the University of Texas at Austin created the Longhorn Opportunity Scholarship for low-income students. In 2000, shortly after a lower court in Georgia banned affirmative action, the University of Georgia created the One UGA scholarship to increase diversity. Many public universities in states like Michigan, where lawmakers banned race-conscious admissions in 2006, and Arizona, where it was prohibited by voter referendum in 2010, did the same.

“When states banned affirmative action, almost invariably flagship universities would boost financial aid in response,” he said. “Now, private universities are doing the same.”

When Financial Aid ‘Is Not Enough’

Kahlenberg said raising eligibility thresholds for free tuition is “a meaningful step,” but that expanding financial aid only uplifts socioeconomic diversity when it’s paired with intensive recruiting efforts in communities that don’t send many students to selective colleges.

“If you increase financial aid without changing your admissions policies, the payoff in terms of economic and racial diversity is not nearly as great,” he said

Christiansen said Vanderbilt is committed to doing both. Last August, the university joined the Small-Town and Rural Students (STARS) College Network to actively recruit more low-income rural students. This fall it is expanding a partnership with the college access-focused POSSE Foundation, adding two more cohorts of low-income, first-generation students to the incoming class. And Vanderbilt is more than doubling its cohort of Questbridge scholars, typically low-income students of color, from 30 to 65.

“We’re not just trying to fill a classroom,” Christiansen said. Between increased financial aid and new recruitment strategies, Vanderbilt’s goal is to “build an educational community that is diverse in many ways,” he said.

That’s no small task for most highly selective colleges, which have long struggled with socioeconomic diversity. A much-publicized 2017 report found that 38 of the country’s most selective institutions enrolled more students from the top 1 percent of wealth earners than from the bottom 60 percent. That data point remained unchanged for over a decade, the report found, despite increases in financial aid offerings during that same period. As Danny Yagan, a University of California, Berkeley economist and co-author of the 2017 report, told The New York Times, “Financial aid only helps if you can get in.”

The Princeton committee’s report acknowledges this, recommending that the university not only invest more in institutional grants but also take steps to increase the number of admitted students who need financial aid to 70 percent and maintain its Pell-eligible population at 22 percent, which it hit last year.

Kahlenberg said he’d seen wealthy colleges make these kinds of substantial investments in financial aid before, most notably in 2004, when Harvard announced its first free-tuition income threshold and Yale increased its financial aid budget by 10 percent, among other big initiatives. But there was no accompanying leveling of class disparity on those campuses, he said.

“It was a big disappointment. There was all this momentum and energy, and then the actual numbers of Pell students and even middle-class students didn’t move much,” he said. “It was a reminder that financial aid isn’t enough on its own.”

This time around, he’s cautiously optimistic that the commitment to financial aid is also a commitment to socioeconomic diversity.

“Now, colleges have a powerful incentive to not just say they’re meeting more students’ financial need, but to bring in more students with higher need,” he said.

Filling in the Barbell

More socioeconomic diversity doesn’t always mean more low-income students, however. Colby College, a small liberal arts school in Waterville, Maine, is trying to attract more middle-class students—a group that is often left out of affordability initiatives, said Matt Proto, the college’s vice president and chief institutional advancement officer.

Earlier this month, Colby expanded and restructured its financial aid plan. The new program, made possible by an anonymous $10 million donation, is tiered to meet more demonstrated need for a wider range of students.

Only families making less than $75,000 a year can expect free tuition, room and board. But those making up to $100,000 will pay no more than $10,000, and families making up to $150,000 will pay only $15,000. Even families with yearly incomes up to $200,000 will pay a maximum of $20,000 a year total—nearly $70,000 less than the college’s estimated annual sticker price.

Proto said he hopes the gift will allow Colby to attract more applicants from the middle sector of the American economy—the children of teachers, nurses and civil servants, who are often underrepresented at the most expensive institutions.

“We wanted to have a really straightforward way of signaling to those families and students that Colby could be accessible to them,” he said.

Proto said class representation at highly selective colleges like Colby is distributed like a barbell: heavy on the extreme ends and thin in the middle. That’s because wealthy colleges admit many upper-class students who can pay full tuition, as well as a substantial number of low-income students whose tuition is subsidized by their full-pay classmates—but proportionally far fewer students from middle-class families who aren’t eligible for Pell grants but still struggle to afford college.

Unlike his colleagues at Princeton and Vanderbilt, Proto dismissed any connection between Colby’s new financial aid initiative and the affirmative action ban. He said it was more closely linked to the 2017 socioeconomic diversity report, which listed Colby as number 4 in terms of having the greatest wealth disparity: 20 percent of its class came from the top 1 percent and only 11 percent from the bottom 60 percent. Proto said the college has since worked to improve that discrepancy, and that the latest expansion is an important step.

Kahlenberg agreed that considering middle-income students in financial aid planning is crucial for colleges seeking to improve their socioeconomic diversity.

“There’s still an underrepresentation of the middle class on these campuses, even of the upper-middle class,” Kahlenberg said. “Only the ultra-wealthy are really overrepresented.”

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