If your son or daughter is accepted at Yale this year, you probably won't have to borrow a dime to pay for that Ivy League education, thanks to Yale's expanded financial aid for middle- and upper-middle-income families.
But don't start learning the Whiffenpoof Song just yet. Only a fraction of extraordinary students manage to gain admission to Yale, which hasn't raised the size of its freshman class in 40 years, even as applications have soared. The same is true for other elite schools that have also liberalized their aid plans. Harvard, which will provide aid to families with incomes of up to $180,000, has received 27,000 applications. The number of freshman slots? About 1,650.
Generous new financial initiatives from Yale, Harvard, the University of Pennsylvania and some other elite schools have drawn renewed attention to the plight of families struggling to afford college. But what if you can't get into one of these brutally selective schools? Though some other private colleges have taken modest steps to aid more families, they can't begin to match the Ivies' financial bounty. Most middle-class families, experts say, won't find any additional aid on the table, and some schools might feel compelled to reduce aid for low-income students.
Take Nancy Smerkanich, who works for a pharmaceutical company in Wayne, Pa. Her daughter, Natalie, who will start college this fall, has narrowed her choices to a few out-of-state public colleges.
Natalie plans to apply for scholarships to help with the cost, which will far exceed the cost of a state school. Smerkanich also plans to seek federal financial aid. But her expectations are low. When the Smerkaniches applied for aid for their older daughter, Kyra, four years ago, they qualified only for student loans. When Kyra graduates this year from American University in Washington, D.C., she'll be weighed down by about $107,000 in loans, of which her parents will pay half, Smerkanich says.
Smerkanich says she and her husband, a public school teacher, have saved diligently in a 529 plan for their daughters' education. It's still not enough.
"We've done so much, and our kids are still taking out substantial loans," Smerkanich says. "If this is a stretch for us, how do other people do it?"
Some aid analysts worry that some private schools, to try to stay competitive with the Ivies, will use more of their endowments to attract the best and brightest students. Those students are likely to come from relatively well-off families.
That approach "could take resources from the same pot of money that really should be going to low-income students," warns Robert Shireman, president of the Institute for College Access & Success, a non-profit organization.
Looming in the background are fears that the economic downturn could force states to cut funding for state colleges and universities, which could lead to sharp increases in tuition. More than 65% of full-time undergraduate students — including a majority of low-income students — attend state colleges and universities. A 2006 study by the Center for the Study of Education Policy at Illinois State University found that state funding for higher education declined during three of the past four recessions. After the 2001 recession, the study found, state appropriations for higher education fell 8.6%.
Several states are also wrestling with gaping budget deficits, which could deepen the cuts, says Luke Swarthout, advocate with the U.S. Public Interest Research Group's Higher Education Project. When states face a budget crunch, he says, "Higher education frequently finds itself in the position of being one of the first programs cut."
The income gap
In an interview last month with reporters and editors for USA TODAY, Yale President Richard Levin said Yale's expanded financial aid program sends an important message, even if the actual number of students affected is small. Yale "is giving a strong signal that opportunity is available to the most talented in the country," Levin said. "Americans like to have ambitious targets."
But even ambitious low-income students face a herculean task in trying to get into the Ivies. In 2004, Harvard waived all costs for any student with family income of $40,000 or less; that threshold was raised to $60,000 in 2006. Yet only about 8% of Harvard students come from low-income families, according to a 2006 analysis of federal Pell grant data by the Chronicle of Higher Education. Most Pell grant recipients have annual family incomes below $50,000. The numbers were similar at other elite schools. For the 59 wealthiest private colleges, an average of 14% of students come from low-income households, according to the Chronicle of Higher Education.
"A low-income student from a not-very-good (high) school is going to have a hard time meeting the basic entrance requirements for Harvard and Yale," Shireman says.
During high school, low-income students are also more likely to hold part-time jobs, which sometimes prevents them from participating in the types of extracurricular activities that impress college admissions committees, he says.
If Ivy League schools are serious about creating a more economically diverse student body, Shireman says, they need to change "the way they look at the life experiences of an 18-year-old from a $60,000 family as opposed to one from a $160,000 family."
Jonathan Burdick, dean of admissions and financial aid at the University of Rochester, argues that Ivy League schools are providing aid for some families that can afford to pay the full cost. Forcing smaller schools to compete for students from such families, he says, "restricts our ability to help those who need it the most." Under a program launched this year, the University of Rochester is offering up to $25,000 a year to students who graduate from Rochester city high schools.
Other schools, too, have embraced a range of ideas to try to draw more students from low- and middle-income families. They include:
•De-emphasizing test scores. Low-income students make up about a quarter of the student body at Smith College, an elite private women's college in Northampton, Mass. — the highest such percentage among the nation's 30 highest-ranked liberal arts colleges — according to the Journal of Blacks in Higher Education. In part, that reflects generous financial aid packages, made possible by Smith's $1.4 billion endowment. But the students' economic diversity also reflects Smith's decision to rely less heavily on test scores than other elite schools, says Audrey Smith, dean of enrollment.
SAT scores, she says, "correlate with income more than any other factor" in the admissions process. In 2007, the median combined SAT score for students from families with income of more than $100,000 was 1637, according to the College Board. Students from families with income of less than $50,000, by contrast, had an average score of 1462.
"We place a very strong emphasis on evaluating students in the context of opportunities available to them at their high schools," Smith says. "Has this student overcome other challenges in her life?"
Shenquia Archer, 21, says Smith's admissions policy enabled her to fulfill her dream of attending an all-women's college, even though her test scores "weren't very good." Archer, the daughter of a single mother in the Bronx borough of New York City, says a generous financial aid package also influenced her decision to attend Smith.
The policy doesn't mean Smith has lower admission standards than other schools, Audrey Smith insists. "We just measure success a little differently."
•Slashing tuition. At a time when most colleges' tuition rates have risen faster than inflation, Blackburn College, a small private school in Carlinville, Ill., took the radical step this year of reducing its tuition by 15%. To do so, Blackburn has dropped most merit aid and will no longer engage in bidding wars for top students, says Blackburn President Miriam Pride.
For the 2008 academic year, tuition at Blackburn will be $13,500. Blackburn is a so-called work college, which means students are expected to work on campus to help cover their education costs. They work at least 160 hours each semester, from cooking meals to maintaining grounds.
Freshmen can earn a credit of at least $2,400 off their tuition, bringing the total down to $11,100. With room and board, the total cost comes to $15,255, about half the average cost of tuition, room and board at a four-year private school in 2007.
Blackburn has historically attracted a large number of low-income students. More than 75% of its students qualify for federal Pell grants. But even with financial aid, about a quarter of Blackburn's students couldn't afford to stay in school, Pride says.
With the tuition cut, she says, "We're really trying to make it more affordable, to make the total cost more transparent, and to help students and their families really look at the investment they're making."
Blackburn's tuition cut persuaded Adam Evans, 17, of Effingham, Ill., to attend the school this fall. Evans was already interested in Blackburn's golf program, and "when I saw their tuition, that price was unbelievable."
Adam's father, Greg Evans, says his son earned excellent grades in high school and was offered scholarships from several other schools with golf programs. But even with those scholarships, "the total bill was going to be higher" than the cost of Blackburn, he says.
•Replacing loans with grants. Colby College, a small private college in Waterville, Maine, announced last month that it will eliminate loans from students' financial aid packages, replacing them with grants. Over four years, Colby estimates, the program will reduce the typical student's debt by more than $14,000.
Unlike some other schools that have swapped loans for grants, Colby doesn't have a large endowment. As of June 30, 2007, it was $599 million. (That compares with $34.6 billion at Harvard and $22.5 billion at Yale.)
But as with most other endowments, Colby's investments have performed well in recent years, which made the shift from loans to grants possible, says spokesman Stephen Collins.
The program won't eliminate debt for all students. In a typical financial aid package, colleges calculate how much they believe a family can afford to pay, known as the expected family contribution. The schools then offer a mix of loans, grants and work-study to make up the difference between the expected family contribution and the cost of college.
By contrast, Colby's program, and others like it, remove loans from the aid package, though families may still have to borrow to cover their expected contribution. Bowdoin College in Brunswick, Maine, also announced last month that it's replacing loans with grants. Bowdoin's endowment is $827 million.
Private schools are experimenting with other ways to attract low- and middle-income students, from freezing tuition to paying interest on loans taken out by parents. California Lutheran University in Thousand Oaks, Calif., announced this year that freshmen who are admitted to both California Lutheran and the University of California, Los Angeles or UC-Santa Barbara can attend CLU for the same price as the public universities.
School officials say they hope these initiatives will help students and their parents overcome the sticker shock associated with private-school tuition rates. But the initiatives are also key to the schools' survival, says David Warren, president of the National Association of Independent Colleges and Universities.
"There's a keen awareness of the issue of affordability and access to private colleges," he says. "They're not going to stay in business if they're unable to make their colleges affordable."