Paying for college is one of the most pressing concerns for families today, which is why I feel compelled to share ideas that may help families manage the cost. Followers of my blog have read my postings on the merit aid “arms race,” or how colleges use tuition discounting to attract the students that they especially want to enhance their class profile. However, a battle for exceptional students has now taken hold at the top tier of selective colleges: the Ivy League.
As many of you know, the eight Ivy League colleges, along with a handful of other highly selective schools, do not offer merit aid to students. Even those with mega-endowments use their financial aid resources exclusively for students who demonstrate financial need. This naturally figures; such colleges and universities have no trouble drawing top students, so there is no incentive to offer grants just to lure students away from other schools. Besides, merit aid awards run counter to the more important mission of access regardless of cost. Yet that does not mean that these toughest admit schools aren’t thinking about ways to compete with their peer institutions for students. With little fanfare, two universities, Cornell and Dartmouth, decided to go head to head with other Ivies, using financial aid for precisely that purpose. Both universities will soon match the aid packages that students are awarded by other Ivies and a few highly competitive schools too.
Back in 2007-2008, partly due to government pressure to spend their endowments on students rather than lose tax-exempt benefits, some 40 top tier schools dispensed with loans for the neediest students. Two universities with the largest endowments, Harvard and Yale, set an even higher bar in order to also benefit middle income families: At Harvard students with family incomes of less than $60,000 pay nothing, while those who make less than $180,000 have their costs capped at10% of their income. For Yale students, the income ceiling which allows students to take advantage of the 10% maximum out-of-pocket is a whopping $200,000. Cornell, having a far larger student body and much smaller endowment, is in no financial position to compete with such hefty aid packages for all of its students.
Yet not wanting to lose out on some of these gifted students, Cornell has found a way to compete without offering such generous awards across the board. Starting with the class enrolling for the fall of 2011, Cornell will match the offer of other Ivies to which the student has been accepted. Cornell has issued the same match policy for students accepted to Duke and Stanford. However, if your child happens be one of the students in this high class problem category, don’t expect Cornell to come to you. It is up to the student to approach Cornell to request the additional aid based upon the competing package.
Sure, this will affect a very limited group of students: those who are smart and lucky enough to be accepted to at least two Ivy League schools while also qualifying for financial aid. Yet the concept of competing aid policies does expand the notion of affordability of an Ivy League education to a broader universe of middle income families. The student who would choose Cornell or Dartmouth over Harvard will no longer have to factor cost or potential outstanding debt into the equation. This is a positive step forward for college affordability. But just so you don’t think I’ve completely taken leave of my senses, let me assure you that I am fully aware of the most difficult hurdle which remains: Getting in!