Fewer Merit Scholarships Planned

SYRACUSE, N.Y., March 23, 2009 -- Faced with a record number of financial aid appeals, Syracuse University is scrambling to meet student need with a variety of measures, including steep cuts in merit scholarships.

"Everything is on the table," said Youlonda Copeland-Morgan, Syracuse University's associate vice president for enrollment management and director of scholarships and student aid.

That means an emergency fundraising drive for aid, a smaller tuition increase than normal and administrative budget cuts.

It also means a redistribution of all aid money, resulting in a 22 percent reduction of merit-based aid Syracuse will award to the incoming freshman class of 2013, administrators confirmed.

"In our overall goals to ensure that we are providing adequate financial aid for all students, part of our review has been to look at how we're spending current dollars and whether that's an effective use of those dollars," Copeland-Morgan said.

Nationwide Problem

The economic downturn has forced Syracuse and nearly every institution of higher education to invent creative methods to fill the financial needs of their students. Merit scholarship programs are frequently becoming casualties.

Universities across the country are facing record requests for financial aid, said Mark Kantrowitz, publisher of finaid.org, which tracks financial aid packages.

"They are being more careful to target their own aid dollars at the students with the greatest financial need," Kantrowitz said. "For example, focusing on students whose parents have lost their jobs over those with just college savings plan losses."

Merit scholarship programs at the state level in Florida, Michigan, Nevada, New Jersey and West Virginia face cuts because of budget concerns and the need to shift aid elsewhere.

Michigan could eliminate its $200 million merit scholarships program, according to The Chronicle of Higher Education.

In New Jersey, standards for the Student Tuition Assistance Reward Scholarships (STARS) program were tightened to include high school graduates in the top 15 percent of their class, rather than the top 20 percent.

Public schools, like the University of Massachusetts, will raise student fees by $1,500 to expand their financial aid program. The 15 percent hike would raise in-state tuition to around $11,000, UMass officials said. It would generate $68 million in new revenue, $20 million of which would go to financial aid, The Boston Globe reported.

Faculty at the Boston and Amherst UMass campuses, meanwhile, voted last month to freeze all salaries for the current academic year. As a whole, the five-school system is expecting a $54 million decrease in state funding for the next fiscal year.

"Colleges are trying to protect student aid despite the need to cut their budgets in other areas because of endowment losses and other economic pressures," Kantrowitz said. "Public colleges often have less control over their finances than private colleges depending on the amount of control exerted by the state legislature."

Class of 2013 Hit

Don Saleh, Syracuse's director of enrollment management, said Syracuse would decrease its merit scholarship base by 22 percent for the incoming class of 2013.

Currently, 36 percent of students benefit from merit aid at Syracuse. That number will decrease to 28 percent next year. The formula for calculating those eligible for merit aid will change, with each college using different criteria, said Chilikuri Mohan, an engineering professor and chair of Syracuse's university senate budget committee.

"I think of it as a refocusing of our aid," Saleh said. "We're in a position at the university that this is the right move for us to make."

The university says more than two-thirds of its 12,981 full-time undergraduates are recipients of financial aid and given the current economic crisis, that number is expected to rise.

Finding the Money

An emergency fundraising drive for financial aid started last semester at Syracuse helped fund additional aid to 426 current students at Syracuse, but raised only half of its intended goal of $2 million.

With a dipping endowment that has decreased by at least $260 million in the last seven months, Syracuse, like universities across the country, has limited resources for increased funding to meet the financial aid crunch.

Syracuse plans to spend $160 million on financial aid for this academic year, a $5 million increase from last year, Copeland-Morgan said. Next year, Syracuse will increase the average discount rate for students by 11.3 percent.

Smaller Tuition Hike

Tuition at Syracuse will rise by 4.5 percent, the lowest percentage increase in 43 years. Because the average assistance package will be higher than the raise in tuition, the revenue for the schools and colleges will decrease.

That shortfall necessitated an $8 million budget cut in administrative and support units, 48 layoffs and salary freezes for all university employees earning more than $50,000.

"Meeting the financial needs of our incoming and returning students is absolutely critical in our planning," chancellor Nancy Cantor said in a letter to the university community.

Making the Cuts

For Copeland-Morgan, it was something as simple as not printing paper copies of financial awards for continuing students.

"Are there ways that we can eliminate waste, but increase effectiveness?" Copeland-Morgan said she asked her staff.

Being creative in changing how the Syracuse financial aid office operates has led to reducing costs, she said, but also improved services.

Maintaining Caliber of Students

Trimming the merit scholarship base will provide some budgetary relief, Copeland-Morgan said, but it's not the answer to meeting all of the new needs of students.

She did not believe the cuts would negatively affect the caliber of students attending Syracuse.

While she would not say how many, Copeland-Morgan noted that some students with merit aid also have financial aid and could receive more need-based aid when the merit aid is cut back.

"The important message to give out to prospective students is that we're going to meet the needs of our freshmen students and continue to meet our obligations to our current students," she said.

Student Government Understands

Larry Seivert, president of Student Association, Syracuse's student government, has advocated increasing the amount of merit scholarships Syracuse awards.

In April, the student government lobbied for 11 new $6,000 merit scholarships for upperclassmen. Those scholarships were first awarded this academic year and Seivert said there are no plans to end the year-old program.

Seivert had planned to seek a larger merit-based program but understands the current situation.

"We were very excited to have those scholarships," Seivert said, "but we realize that with current economic times, we need to make sure we're keeping the current students here in every way possible."

Strategic Cuts

Gwen Judge, Syracuse's budget and planning director, said the goal was to protect its schools and colleges from the cuts. So the university focused on every other administrative and support unit on campus.

"The cuts are strategic," Judge said. "We looked where reductions could occur that wouldn't have a negative impact on the services we provide to students."

Kantrowitz noted a 10.5 percent increase in the number of Free Application for Federal Student Aid forms submitted this year. Money from the budget cuts at Syracuse will go toward financial aid, as will the freed-up dollars from merit scholarships.

"Syracuse is taking the right steps to make sure that students with financial need are addressed first," Kantrowitz said of the school diverting merit aid to financial. "Other schools are taking similar steps. More families need help, so it is increasingly important to target the students with need first."

Long-Term Effects?

The effects of reducing the number of merit scholarships won't be known for some time.

But meeting the needs of students during the financial crisis is the immediate goal for Copeland-Morgan and her office.

"Looking at the distribution of our financial aid dollars is a very prudent thing to do to make sure we are targeting our financial aid to students for whom Syracuse would not be affordable without financial aid," Copeland-Morgan said. "That's one of our highest priorities."