Universities Increase Financial Aid Levels

At a time when university endowments are plummeting by as much as 30 percent, Harvard and its peer institutions have reaffirmed their commitment to meet student financial need as a “top priority”—often at the expense of faculty hires and campus renovations—to stay ahead of the pack in attracting candidates.

Over the past few months, university presidents have pledged in succession to up spending on financial aid, anticipating greater need from both current and prospective students.

Harvard College plans to increase the amount of financial aid dollars for next year by 18 percent—a figure exceeding even the Financial Aid Office’s earlier expectations. Other institutions including Princeton, Dartmouth, and Cornell will also see double-digit percentage increases in the amount of aid distributed.

The increased support for financial aid programs at the various universities will be funded partially by modest tuition hikes hovering around the 3 percent mark, as most administrators are hesitant to further burden families from across the socioeconomic spectrum who feel the recession’s pinch.

But with a near-zero inflation rate, any upticks in tuition, unlike in previous years, will mean an increase in real dollars.

Because a significant chunk of funding for financial aid initiatives comes from university endowments—all of which have been crippled by volatile markets in past months—university leaders have been forced to scale back on other endeavors funded by endowment money.

University President Drew G. Faust has slowed Allston construction plans, for example, and staff layoffs—which have already begun elsewhere—have been discussed by administrators at Harvard as well.

The 18 percent increase in the financial aid budget translates to a total of $145 million to be awarded next year, roughly 70 percent of which will likely be drawn from the endowment.

“This has been an outreach priority for us for a number of years,” said the College’s Financial Aid Office Director Sally C. Donahue. “It certainly has not diminished.”

Some universities—such as Tufts, which suspended its need-blind admissions
policy this year—are not in a position to pledge the same level of financial
support at this time, meaning that Harvard and wealthier institutions find
themselves ahead of the pack in the race to pluck the strongest students from all backgrounds.

“Yale’s financial aid program is among the most generous in the U.S.,” said Caesar T. Storlazzi, the university’s Director of Financial Aid. “Yale will remain extremely competitive and continue to attract prospective students.”

Yale, which boasts a financial aid initiative for undergraduates similar to Harvard’s, will increase its financial aid spending by 5 percent next year.

Though maintaining financial aid programs comes at a cost, university leaders say they recognize the importance of reaching out to previously underrepresented demographics—cultivating, in the process, a reputation for providing a topnotch but accessible education.

“We spend a lot of time trying to make sure we get the word out,” Donahue said of the College’s financial aid initiative launched in 2007.

—Staff writer Athena Y. Jiang can be reached at ajiang@fas.harvard.edu.
—Staff writer June Q. Wu can be reached at junewu@fas.harvard.edu.