Heftier Aid at Elite Colleges Draws Praise, Rebukes
Less Wealthy Schools Could Be Forced to Shift Grants From the Neediest to Compete, Critics Say

By Valerie Strauss
Washington Post Staff Writer
Sunday, January 27, 2008

Decisions by Harvard, Yale and other elite schools to make college more affordable to a larger pool of applicants might have the unintended consequence of harming less wealthy institutions and the students who attend them, some educators and financial aid experts say.

Yale University this month became the latest school with an enormous endowment to announce it was slashing prices for lower-, middle- and upper-middle-income families and substituting grants for loans. Harvard University announced a similar program in December, and since then, the moves have drawn praise and criticism.

Sen. Charles E. Grassley of Iowa, ranking Republican on the Senate Finance Committee, who had been pressuring universities to do more to make college affordable, applauded Yale and Harvard. But he chastised more than 60 other schools with endowments of at least $1 billion that have failed to follow suit, saying they "are making church mice sound loud by comparison."

In his effort to force schools to use more endowment earnings for students, Grassley on Thursday joined with Sen. Max Baucus (D-Mont.), the committee chairman, to ask 136 colleges to provide details about the growth of their endowments and whether that translated into more student aid. Ten were from Virginia, Maryland and the District, including the University of Virginia, the University of Maryland, Johns Hopkins University, George Washington University and Georgetown University.

Yet some university officials and higher education researchers said the new financial aid approach could force some schools to use more of their financial aid dollars to compete for the best middle-income students rather than to bring in the neediest. They also said that Harvard and Yale, whose prestige and wealth make them leaders in higher education, missed an opportunity to change the financial aid dynamic to benefit the majority of the more than 14 million college-bound students each year.

"The 99.95 percent of us who attend or work at other colleges have to deal with the agenda Harvard sets, but we shouldn't have to applaud or pretend we admire it," said Jonathan Burdick, dean of admissions and financial aid at the University of Rochester.

How to pay for college is controversial, with debates about how much financial aid is appropriate, to whom it should be directed and how it should be delivered. "Giving financial aid to families who make $150,000 a year isn't going to solve the financial aid crisis," said Donald Heller, director of the Center for the Study of Higher Education at Pennsylvania State University.

According to the nonprofit College Board, about $131 billion in financial aid was distributed during 2006-07 to undergraduate and graduate students in the form of grants, work-study, federal loans and federal tax credits and deductions. Students still took out more than $18 billion in loans from state and private sources.

Increasingly, colleges are using financial aid to attract the best students, rather than to help the neediest . The National Association of State Student Grant & Aid Programs found that states spent $2.6 billion on aid programs with a merit component in 2005-06, an increase of 22 percent over the previous year. State spending on merit aid grew at a rate nearly four times higher than the amount spent on need-based aid in 2005-06, it said.

The need keeps growing because the cost of education keeps climbing. For the current school year, the College Board said that tuition for in-state, public four-year colleges rose 6.6 percent over last year, adding up to $13,589 for tuition, room, board and other fees. The average at private colleges for undergraduate students was $32,307.

That makes financial aid crucial in competing for good students. Some educators say schools with limited aid resources -- including state universities -- could be forced to convert need-based funds to merit aid to attract top students tempted by the financial packages offered by Ivy League schools. Cost will drive competitiveness more than ever, said Lee Coffin, dean of undergraduate admissions and enrollment management at Tufts University.

"If we are increasingly unable to fill our classes with the kinds of kids we want or historically had, we have to think, 'How do we use this resource in a more targeted way?' " Coffin said. "That's where you see the dollars start to shift away from the access piece. . . . I think a lot of places are going to feel that pinch and are going to be forced to make some uncomfortable decisions."

Some critics of the moves by the elite schools noted that none of the recent proposals guarantee enrolling a set percentage of low-income students. They said they fear that widening the pool of middle- and upper-middle-class students at elite schools could cut the number of neediest who are accepted. At the most selective U.S. universities, 10 percent of students receive Pell Grants, federal aid open to families that earn $45,000 and under, according to a study done by Heller a few years ago.

Some educators said Harvard and Yale could have decided to use their resources to help elementary and secondary schools do a better job preparing needy students for college. They could have also worked to enact more general reforms and lobby Congress to provide more financial aid.

Yale President Richard Levin said Yale and Harvard can't win with critics. "If we don't spend our resources for a social good, we are criticized," Levin said. "If we do spend our resources for a social good, we are criticized. We are trying to strike a balance."

Levin said that if the new plans create any pressure, it could be on state legislatures to increase financial support for higher education, totals that rise and fall over the years depending upon the condition of the national and state economies.

Levin also said one of the reasons Yale made its move was pressure from Grassley, who has authored legislation mandating that schools with endowments of more than $500 million spend at least 5 percent for students' benefit. Harvard and Yale, with multibillion-dollar endowments, routinely spend less than 5 percent. Many college leaders have opposed a congressional mandate.

William Fitzsimmons, Harvard's dean of admissions and financial aid, said the school needed to do more for families with incomes between $60,000 and $200,000 because so much of the aid efforts had been targeted at the poor. He said that many middle-income students never applied to Harvard and that those who did attend did not enjoy a full experience.

"We feared that we were returning to the bad old days" when students who were not wealthy felt like "second-class citizens," he said. "Morally, I'm not sure we had a choice."

View all comments that have been posted about this article.

© 2008 The Washington Post Company