From the archives: Relative to peers, U.’s financial aid lags behind

This article is part of the series Money Matters
Part two of a four-part series

When high school senior Vananh Tran was admitted to Brown last month, she was floored.

“It was my dream school. And I honestly never expected to get in,” she said. Tran loves Brown’s “individualized attention” and its emphasis on learning over competition.

But the decision-making process has not been so clear-cut. For Tran, who comes from a family of five living below the poverty line in Anaheim, Calif., finances are a major concern – and the University of California at Berkeley has offered her a full ride with no loans or work-study. Penn, the other school she is considering, gave her a package similar to that of Brown, but requiring thousands less from her student summer earnings and including more spending and travel money.

Tran attended Third World Welcome and A Day on College Hill, but before attending those events, she told The Herald she wished the choice was easier. 

“Honestly, if Brown had given me better financial aid, it would be no problem deciding it right now,” she said. 

The University’s commitment to ensuring a diverse student body got a boost in 2003, when admissions for domestic first-year applicants became need-blind, and again in 2008, when Brown eliminated parent contributions from families with incomes under $60,000. Over the past decade, Brown has tripled its annual financial aid budget to $90 million, making it a budgetary priority second only to salaries in total amount, as well as the fastest-growing item in the budget, said Beppie Huidekoper, executive vice president for finance and administration.

Yet Brown, hamstrung by an endowment smaller than those of its peers, lags behind its competitors in financial aid offerings.

Among some of the institutions Brown calls its peers – other members of the Ivy League, Stanford University and the Massachusetts Institute of Technology – Brown ranks at the bottom in percentage of undergraduates receiving financial aid, with roughly 2,700 of 6,100 students, or 44.1 percent, awarded aid this school year.

According to the 2011-12 Common Data Sets,  64.1 percent of students at MIT received aid this year, and the figure fell between 50 and 60 percent at most other schools. Columbia did not release this information to the public.

The Office of Institutional Diversity cites “socioeconomic background” as one of several dimensions of diversity the University strives to achieve, and Provost Mark SchlisselP’15 said such diversity is fundamental to the University’s mission.

Brown expanded its aid offerings under President Ruth Simmons, with the size of the average aid package jumping 55 percent in the past seven years. While it may lag behind certain peers, the University’s aid packages still outstrip those at many universities around the country.

But with top competitors aggressively courting high-achieving, low-income students, and with Brown’s financial resources comparatively smaller, some worry the University is falling behind in its efforts to be accessible to all qualified applicants. And at the administrative level, dueling priorities – making international and transfer admissions need-blind, eliminating loans in aid packages, expanding the financial aid budget, stemming tuition increases – strain the budget.

By Brisa Bodell
By Brisa Bodell

Meeting need 

Though Brown is at the bottom among its peers in percentage of total students applying for and receiving University aid, its average aid package – at $38,490 – is closer to the norm, as is its proportion of enrolled students who receive aid after applying for it, at 86.9 percent.

According to the Consumer Financial Protection Bureau’s financial aid calculator,  Brown ranks the highest in the Ivy League in terms of potential loan debt. Graduates will face average monthly payments of $1,391 over 10 years in order to pay off borrowed funds, as opposed to $984 at Harvard. Both Williams College and Amherst College fit at the lower end of the scale, with an estimated $1,005 and $821 in monthly payments, respectively.

Universities have different methods of calculating demonstrated need and expected parent contribution. The College Scholarship Service, a part of the College Board, provides schools with the Institutional Needs Analysis System, a computer model that offers detailed information on factors like cost of living and asset protection, Director of Financial Aid James Tilton said. Brown uses this model, while Harvard, Yale and Princeton do not.

Parameters that can significantly affect the estimated amount of aid include parents’ marital status, number of siblings in college and even a family’s state of residence.

Because this system allows schools to effectively adopt their own definition of meeting demonstrated need, schools can claim to meet 100 percent of their students’ demonstrated need even while devoting vastly different amounts to aid. This year, Brown and all its identified peers, save Penn and Stanford, satisfied their respective standards for meeting all demonstrated need.

Harvard, Yale and Princeton examine similar financial factors as Brown does when calculating demonstrated need, but because of larger operating budgets, decided in 2008 and 2009 to switch to independent models that provide more generous aid packages, Tilton added.

The effects of the University’s aid offerings may be partially reflected in the student body’s socioeconomic makeup. Federal Pell Grants, which serve as one indicator of low socioeconomic status, reached 15.2 percent of undergraduates this year – a number up from 12.3 percent four years ago but far from representative of the national income distribution.

In contrast, 40 percent of students in the public University of California system received Pell Grants last school year, according to a press release from the university system. Though Brown ranks ahead of Yale and Princeton on this measure, it remains far behind Columbia, where more than a quarter of students receive Pell Grants, according to data published by U.S. News and World Report.

Cash constraints

Financial aid offerings are predicated on a university’s endowment and budget.

“It may have to do with availability of scholarship funds – ability of the school to target more of their endowment funds towards scholarships,” said Caesar Storlazzi, director of financial aid at Yale. “Each school has to make its own decisions based on its own economy.”

But universities must consider larger economic trends as well, said Tom Keane, director of financial aid at Cornell. Dealing with yearly fluctuations in the number of students who qualify for aid “is definitely a challenge,” he said. 

The recent financial crisis also caused concern for financial aid administrators. “We were actively worried about it four years ago, but we didn’t see a huge spike (in financial aid needed) because of the economy,” he
said. Keane added he could not explain why no substantial shift occurred but cited the fact that students looking at Cornell tend to come from wealthier families.

Harvard, on the other hand, has increased the income cap that defines which families are not expected to contribute to tuition costs. The cap rose from $60,000 to $65,000 for the class of 2016, despite the turbulent state of the country’s economy. 

“Within the Ivy League, there’s Harvard, Princeton and Yale, and there’s the other five,” Keane said.

Harvard’s financial aid budget will be $172 million next year, according to the Harvard Gazette – a figure nearly double that of Brown.

“It just comes down to resources,” Tilton said.

By Brisa Bodell
By Brisa Bodell

Strains on students

But the University’s financial aid policies affect students long before they even apply to Brown.

The need-aware admissions policy for international and transfer students was a crucial factor for Jonathan Poon’15 in deciding not to apply for financial aid. Poon, who is from Hong Kong, said his family chose to accept the economic strain because they feared applying for aid “might affect my chances of getting in,” Poon said. 

Now that he is on campus and paying full tuition, Poon said he must “be frugal about everything,” whether buying textbooks or eating off campus. 

Other policies have placed an undue burden on his family, Poon said. International students may not reapply for aid if they do not receive it their first year, regardless of changes in families’ financial situations. 

“It would be nicer if there was a safety net,” he said. “If there was anything to happen to my family, it would be very difficult to support me going through the rest of college.” 

Harvard, Princeton and Yale practice need-blind admissions for both international and transfer students and agree to meet 100 percent of their demonstrated need, while Brown does neither. While Cornell has need-blind admissions policies for these groups, the university will only meet the demonstrated need of transfer students. Though there is some pressure to use international students as a source of revenue, their income does not factor into admissions decisions, Keane said.

For many students, Brown’s relatively restricted financial aid offerings can be a factor in the decision to matriculate – especially when they have been offered more generous financial aid packages elsewhere.

Mariana Carvalho ’15, who is from Portugal, applied early decision and was awarded full financial aid at Brown. But she said several of her peers who would have preferred to attend Brown had to turn down regular decision acceptances at the University, opting for schools like Princeton that offered more generous financial aid. 

Brown’s financial aid policy for international students helps create a highly affluent contingent of international attendees, Carvalho said, adding that she would rather see Brown accept fewer international students and award more aid per person to attract a more diverse international population.

Alex Edquist, a high school senior from Alpharetta, Georgia, was admitted to the University last month. But though she was accepted to both Brown and Cornell, she had to factor in the future costs of law school in her final decision. Coming from a “pretty well-off” family, Edquist received financial aid from Brown but said her package “didn’t come anywhere close to covering everything.”

In a recent poll conducted by The Herald, 42 percent of students said their financial aid package does not adequately meet their financial need, though only 20.3 percent of students said they have taken out external loans. Meanwhile, 57.5 percent of students reported they either receive enough or do not require any aid. 

Edquist, who got into eight schools, ultimately chose to attend the University of Georgia on a full ride. “If I had begged and pleaded, I’m sure my parents would have let me go to Brown or Cornell,” she said, “but I didn’t really want to ask them to do that.”

There is a disparity between the socioeconomic makeup of the admitted and enrolled student bodies. In each of the past several years, roughly two-thirds of admitted first-years applied for financial aid, according to University press releases. But this school year, only 58.9 percent of enrolled first-years and 50.8 percent of all full-time undergraduates applied for aid, a drop suggesting that many students who seek financial aid do not ultimately matriculate to Brown.

But it would be wrong to assume that shift necessarily arises from smaller aid packages or rejected aid appeals,Tilton said. 

“It is true that there are students who come to us, we give them what we can do for them, and they may choose not to come back to Brown, but I don’t want to equate the two,” he said. “These are individual decisions. It’s a very difficult situation.”

The University tries to consider every situation qualitatively, Tilton said. The financial aid office focuses on looking at families’ financial situations comprehensively when considering appeals. “When they filled out the application, they just gave us numbers, and now we’re starting to learn their stories,” Tilton said.

And for all students, financial counseling services have been significantly expanded since the recession to help families find more creative ways to fund a Brown education. This year, the Office of Financial Aid added another three-quarters-time aid counselor to augment individual counseling with families, Tilton wrote in an email to The Herald.

“Our counseling sessions are longer and more detailed,” Tilton said. “Our email communication and telephone communication with students and families are much more geared to ‘Just don’t answer this question – help me understand how that’s going to impact me.’”

By Julia Shube
By Julia Shube

Crafting the class  

Under its previous need-aware policy, admission staff at Brown felt it fairer to reject students rather than accept them and not meet all of their demonstrated need, said Michael Goldberger, director of athletics and former dean of admission. On this point, the University was at odds with the National Association for College Admission Council, the “moral voice of college admissions,” Goldberger said. 

But Brown stood behi
nd the policy, based on admissions officers’ experience admitting students who could not completely afford the University and did not have their need fully met. In a temporary experiment with Resumed Undergraduate Education students, administrators saw bad results when they combined need-blind admissions with a failure to meet 100 percent of demonstrated need.

“We just saw horror stories of people who said, ‘I’m going to come, I’m going to find a way to afford it,’ and all of a sudden they are not doing well in school because of financial problems, they are in tremendous debt because of being here and they just sort of assumed we would do something, and it didn’t happen like that,” he said. 

Brown approached reaching 100 percent of demonstrated need even before its 2003 decision to make domestic first-year admissions need-blind, Tilton said. 

Need-blind admission offices can use techniques to gauge students’ financial status – for instance, looking at parents’ occupations – and include it as a consideration in crafting a diverse class, Storlazzi said. Admission offices simultaneously pursue recruitment programs to attract students from areas where their universities may not be well-publicized or well-represented.

But a study of 1995 admissions data from 19 top colleges and universities – not including Brown – found socioeconomic status did not matter in the admission process, with neither poorer nor wealthier students receiving a boost. 

“The function of the more selective institutions in promoting social mobility has been reduced by the effects of family circumstances on qualifications, principally,” said William Bowen, a former Princeton president who led the study. “You can say all you want to about wanting to help with social mobility. … It takes a conscious, determined effort to do something about that.”

Bowen said diversity is crucial to students’ academic experience. “If you’re teaching beginning economics and your class consists 80 percent of students from well-off families, it’s difficult to have the conversation about unemployment and poverty,” he said. 

Some top colleges have actively worked to draw students from less conventional backgrounds. Under then-President Anthony Marx, Amherst sought over the last decade to boost socioeconomic diversity by recruiting its transfer class heavily from top-performing community college students. Marx told the New York Times last year that this was part of a comprehensive effort to do “everything we can think of” to improve diversity and financial aid.

Last academic year, 62 percent of transfers to Amherst were from community colleges, and the school’s share of students receiving Pell Grants nearly doubled between 2005 to 2010.

In contrast, need-aware admission at Brown for transfer students generally makes the University less socioeconomically diverse – only 28 transfers are currently on financial aid, Tilton said, though roughly 135 enrolled this year alone. 

Brown has drawn more in recent years from the community college pool, though the University has taken no specific actions to effect the change. Over the past several years, the number of students being admitted as transfers from community colleges has incidentally risen, said Jim Miller ’73, dean of admission. In the most recently admitted transfer class, 9 percent of transfer students came from community colleges, he said, compared to just 3 or 4 percent “a few years ago.”

Still, the decision to increase the size of last year’s transfer class by 50 was motivated in part by “budgetary considerations,” then-Provost David Kertzer ’69 P’95 P’98 told The Herald in Feb. 2010. Miller added that the move would help “to alleviate some financial pressure” because it would provide extra tuition revenue with less of an emphasis on financial aid. 

The University’s admission policies for transfers force heavy loan burdens on many students, wrote Stephen Olsen ’13.5, who transferred from Santa Monica College, a community college in California, in an email to The Herald.

“Because the admissions process is very much need-aware, I’m sure (fewer) apply or apply without aid and take on an unreasonable amount of debt,” he wrote.

Picking priorities

As the University welcomes a new president, a variety of goals and groups are lobbying for a finite pool of resources. One advocated change would be to eliminate loans in all aid packages, which Princeton and several other schools have done, and which President-elect Christina Paxson has called something she “would love to be able to do.”

Brown for Financial Aid, a student group recently created to kickstart campus dialogue about financial aid policies at Brown, hopes Paxson will become a partner in achieving some of the group’s goals for financial aid reform, which include the possibility of loan-free aid. The transition between presidents provides an opportunity for advocacy, as the University will be looking to reassess programs and priorities, said group Co-Founder and incoming Undergraduate Council of Students President Anthony White ’13.

The group has drafted a petition urging Paxson to prioritize financial aid and hopes to gather 2,000 signatures to present at May’s Corporation meeting, White said.

In a poll conducted by The Herald last month, 57 percent of students agreed that making admission need-blind for transfer and international students should be a higher priority for the University. When asked to choose the most important issue for Paxson to focus on, 37.8 percent of students chose increasing financial aid, making it the most popular answer by a margin of nearly 20 percent. 

Meanwhile, all presidential candidates for UCS this year identified improving financial aid as a top priority.  

But though Paxson will be able to set new priorities and spearhead fundraising drives for financial aid, much of the University’s endowment is restricted for certain donor purposes, Huidekoper said. And many of the University’s top commitments for the next few years have already been set – including housing renovations, expanding the engineering program, maintaining the current level of financial aid and promoting the brain science initiative. The University also projects a budgetary deficit for the next two years.

Despite the debt Brown graduates face, going loan-free remains one of several priorities fighting for administrators’ attention, and not everyone is on board.

Schlissel said he believes some loans are not a bad thing to motivate students. “I actually think it’s important for students not to be burdened by loans but for students to be investing in their own future,” he said, adding that he wants to reduce loans somewhat to ensure that every student has the opportunity to pursue low-income passions like teaching. “Maybe for competitive reasons, it’s good to say that we want to be loan-free, but I don’t embrace it as such an important goal.”

Cornell administrators likewise see merit in requiring some loans for students on financial aid. “If your parents won’t make you invest, we’ll make you invest,” Keane said.

Brown for Financial Aid advocates h
iring a staff member who would advise students, matching them with appropriate jobs to help students navigate loans and work-study options. 

“If (Schlissel’s) suggestion is that students have a responsibility in financing their education through work-study, it should be” facilitated by the University, White said.

But loan-free programs can constitute a significant financial burden for a university. The desire to remain competitive was a motivating factor for Williams’ decision to go loan-free in 2008. 

“Many of the other schools like Williams were moving in that direction, and at the time it seemed like the right thing to do, particularly because our endowment at that time could support it,” said Paul Boyer, Williams’ director of financial aid. But the high-profile move collapsed three years later, when the college rolled back the policy in the wake of the recession.

Boyer said effects of the economic downturn linger for colleges across the nation. “A lot of schools are struggling just to maintain what they’re doing now, and the issue is really just sustainability,” he said, adding that not many universities can afford to eliminate loans. 

“Can their endowment support that? And if going loan-free is a priority on your campus, what other things might you have to give up in order to achieve that?” Boyer said.

At Brown, other possible priorities include slowing the rate of tuition increases. Recent hikes have been coupled with expansions of the financial aid budget, Schlissel said, so they are “largely invisible to students” on aid. But they have placed an undue burden on students not receiving aid, he said. “There are equity issues involved here,” Schlissel said, adding that halting tuition increases is one of his personal top two financial aid priorities.

The other, he said, is expanding the financial aid budget to help middle-class students on the margins who neither receive aid nor have enough money to pay for Brown. 

“It’s not to make us competitive with other schools,” he said. “It’s to make us accessible to students who are qualified.” 

Schlissel also emphasized the value of socioeconomic diversity in students’ academic experiences. “It’s voices around the table. The more heterogeneous, the more diverse those voices are, the better learning you do,” he said. “If we can’t provide that kind of environment, then you’re not getting the best education we can provide.”

When Brown for Financial Aid raised its concerns at a Brown University Community Council meeting earlier this semester, one of the administration’s responses was to convene a research project to compile data on the specific costs of various financial aid priorities and possibilities. Tilton and Huidekoper, who are leading the project, will start the research toward the end of the year, Huidekoper said, adding that she was unsure when they would have results.

Meanwhile, for high school senior Tran, the decision to matriculate was still up in the air Monday night, though she told The Herald she was “98 percent set on Brown.”

Though the University nearly eliminated her expected family contribution, her package still rang up more than $3,000 from her family and her summer earnings. “I don’t really consider that a full ride,” Tran said.

And the prospect of graduating loan-free from Berkeley remained tempting, making the final commitment difficult to make.

“I have these two other packages,” she said, “sitting there staring at me.”

While the University struggles to expand aid and compete with its peers, income continues to influence how students interact and perceive each other. The third part of this series will examine how students tackle the issues of class and financial aid on a campus so marked by privilege. 

- With additional reporting by Mark Raymond

A bar graph previously accompanying this story incorrectly stated that it documented the percentage of students that received financial aid in 2010-11. In fact, the numbers were from the 2011-12 academic year. The Herald regrets the error.

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