Private Colleges Boosting Financial Aid

By CityTownInfo.com Staff
March 2, 2009

In an effort to maintain enrollment, many private colleges - particularly those with relatively small endowments - are increasing financial aid to students.

The New York Times reports that Ithaca College, located in upstate New York, is offering increased tuition discounts which will make up the largest financial aid budget in its history. Tuition makes up 90 percent of the school's budget, and college officials boosted financial aid in an effort to stave off declining enrollment.

"The good news is that we haven't taken as much of a hit in our budget as some institutions that rely very heavily on their endowments," said Dave Maley, a spokesman for Ithaca, in the Times. "The alternative is, since we rely heavily on enrollment, any loss in student numbers hits us harder."

Other private colleges are also boosting aid, even while cutting budgets and laying off staff. The Houston Chronicle reports that the University of St. Thomas - which relies on tuition for about 80 percent of its budget - will boost financial aid by at least $250,000.

"Without financial aid, I wouldn't be here," noted Tammy Vo, a freshman at the university, who was quoted in the Chronicle. She explained that after applying to numerous colleges, she decided on the University of St. Thomas because it offered the best deal.

At Nichols College in Massachusetts, school officials have arranged for staff to teach classes usually handled by adjunct professors. The move will result in the college saving enough to discount tuition for 20 prospective students and 40 current students who otherwise could not afford to return.

The Times noted that according to a December survey of 372 institutions by the National Association of Independent Colleges and Universities, 93 percent said they were moderately or greatly concerned about preventing decreased enrollment. Just 8 percent said they would cut financial aid, compared to 50 percent that had stopped hiring, 49 percent that had put off renovation and 22 percent that had frozen salaries.

Kathy Kurz, an enrollment consultant to colleges, explained that the economic climate has driven many schools to cut back on everything but financial aid. "Many of them recognize that their discount rates are going to go up," she told The Times, "but they'd rather have a discounted person in the seat than no one in the seat."

Even some of the most prestigious colleges have increased financial aid, including Cornell, Princeton and Vanderbilt, who have announced plans to replace loans with grants.

Similarly, in an effort to attract students applying to public colleges, California Lutheran University recently began offering a public price tag to any student accepted at the University of California, Santa Barbara, or at the University of California, Los Angeles.

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