Compiled By Yaffa Klugerman
December 2, 2009
While many private colleges responded to the economic downturn this year by significantly boosting financial aid in order to maintain enrollment levels, many institutions may not be as generous next year.
U.S. News & World Report notes that according to John Strassburger, president of Ursinus College in Pennsylvania and president of the Council of Independent Colleges, financial aid officers may very well cut back on aid offers to next year's freshmen. That's because many colleges increasingly believe that families can afford more than what was estimated in 2009.
This year, generous financial aid packages sometimes resulted in unexpectedly large freshmen classes. U.S. News reports, for example, that such was the case at DePauw University in Indiana and Maryland Institute College of Art. Nevertheless, a recent analysis by Moody's found that nearly a third of private colleges saw their tuition dollars decrease overall this year as a result of rising scholarship offers. As a result, tuition is likely to increase in 2010 while financial aid drops.
Strassburger told U.S. News that while Ursinus increased its financial aid budget by 15 percent earlier this year, aid will most likely only increase by 7 percent next year, while tuition may rise as much as 4 percent.
Even some prestigious universities that have no difficulty attracting applicants are considering adjusting financial aid. The Dartmouth reports that the Board of Trustees at Dartmouth College announced last month that impending budget cuts may affect the school's financial aid program. The Ivy League school typically offers generous aid packages, and grants free tuition to undergraduates whose families earn incomes below $75,000.
The Board instructed the college's administration to cut $50 million from its budget in 2011 and another $50 million in 2012. Dartmouth President Jim Yong noted in an interview with The Dartmouth that while the school remains committed to need-blind admissions, the financial aid budget will be examined and possibly "tweaked" to make it function "more effectively."
"We are going to make sure people who are currently Dartmouth students don't find themselves unable to afford a Dartmouth education," Yong noted.
Institutions struggling with decreased revenue are in no way limited to those that increased financial aid packages. Inside Higher Ed reports on Sweet Briar College, which maintained its discount rate--the percentage off the sticker price that students and families receive--and paid the price.
Sweet Briar's enrollment dropped from 650 to 605 students this year, resulting in a budget deficit of $900,000. Consequently, the school is anticipating layoffs, cutting back on retirement contributions for its employees, and requiring top administrators to put in some work time without pay.
But unlike many private colleges, Sweet Briar may very well increase financial aid. Jo Ellen Parker, president of the college, told Inside Higher Ed that she believed the decline in enrollment was because "our financial aid packages were not competitive." She noted that college officials are now considering whether to raise the discount rate in an effort to attract more students.