By CityTownInfo.com Staff
June 10, 2009
In addition to admitting more students, freezing or reducing salaries, suspending hiring and postponing construction, some private colleges are responding to budget constraints by being more partial to wealthy applicants not in need of financial aid.
The New York Times reports that Reed College in Oregon was this year forced to drop more than 100 needy students and instead admitted those who could afford to pay full tuition. The painful move was considered necessary by the school in order to avoid more drastic measures such as spending more of its already devalued endowment, closing some departments or selling some of the college's real estate.
"None of us are very happy," admitted Leslie Limper, the school's aid director, who told the Times that the institution had never before been required to reject so many worthy students.
This year, Reed saw a 23 percent increase in freshmen requesting financial aid, and twice as many appealed their aid packages. The school is increasing its financial aid budget by 7.8 percent, but many students nevertheless cannot afford to foot the bill.
"We had so many of these people," said Limper. "We had to say, oh my goodness, we can't offer aid to everyone who needs it."
The article reinforced a previous report in the Times which asserted that many colleges were taking applicants' financial status into account when considering admissions. More institutions, for example, were admitting students from waiting lists or foreign students who could pay full tuition.
"If you are a student of means of ability, or both, there has never been a better year," said Robert A. Sevier, an enrollment consultant to colleges, who was quoted in the Times.
Reed College is hoping for a quick recovery of the economy so that its endowment will grow at a rate of 10 percent annually beginning next year. But that is unlikely, says a new study from Standard & Poor which was reported in The Chronicle of Higher Education.
"We believe that the cuts that many institutions have made in fiscal 2009 may have offset lower revenues this year," said the report, "but that managing additional cuts in fiscals 2010, 2011, and 2012 could be more difficult."
The report predicted that fund-raising revenue would be lower in the next two years, and that many private colleges would have to make significant cuts in their operating budgets. Edwin O. McFarlane, treasurer at Reed College, acknowledged that such a scenario would require the school to reevaluate budgetary constraints even more.