Big boost to college aid unlikely despite moves by Yale and Harvard
Most schools don't have the funds to follow the lead of well-endowed universities.
Now that Harvard, Yale, and a handful of other top-ranked schools have made moves to make their undergraduate programs more affordable, will the rest of American colleges follow suit?Skip to next paragraph
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Not likely. Tuition is expected to keep rising faster than inflation, experts say. And recent moves by some schools to make more aid money available – Yale University announced the latest such plan Monday – merely illustrate the deep divide in American higher education. A few elite schools have huge endowments that allow them to spend more on financial aid programs, while most do not.
"Historically, the decisions of Ivy League schools have been influential in terms of financing college," says Anya Kamenetz, author of Generation Debt. "Colleges – in the extent that they're able to – have followed in the footsteps of what these Ivy Leaguers are doing. [This time,] however, to the extent that they're able to is a big if."
On Monday, Yale announced significant financial-aid packages for students with a family income of $200,000 or less. For these upper-middle income families, the change means a 33 to 55 percent reduction in tuition, and families earning less than $60,000 a year will not be required to make any contribution to Yale. Last month, Harvard unveiled a similar plan.
Both institutions were able to implement these changes thanks in large part to their massive endowments. Harvard has the nation's largest endowment, at $34.9 billion; Yale is No. 2, at $22.5 billion). But with the wealthiest 10 percent of colleges and universities holding most of the endowment assets, according to the College Board, the Harvard and Yale models will be difficult to replicate broadly.
"The smoke and mirrors in this is that the public thinks that Harvard, Yale, and others are actually addressing the cost of higher education," says Robert Massa, vice president for enrollment at Dickinson College in Carlisle, Pa. "All they're doing is lowering the price because they have the largess to do it, and most of us don't, which will cause a systemwide increase in price."
If Dickinson were to replace loans with outright grants, a prominent new aid policy at a number of Ivy League schools, it would cost $5 million, Mr. Massa calculates. The small liberal arts school is already withdrawing the maximum it prudently can each year from its endowment, he adds, so Dickinson would need to raise tuition by $2,000 to fund such a program.
Even at a big school like the University of Southern California in Los Angeles, with an endowment over $3 billion, the administration is hard pressed to issue more aid than it already does. "If we were to go further than we have, it would be very, very costly and would begin to erode other issues that we don't want to erode," says Jerry Lucido, vice provost for enrollment policy and management at USC.