Five years ago, President David Skorton went to the Board of Trustees with an extraordinary request: that Cornell draw from its endowment to eliminate loans for families making less than $75,000 a year.
The Board unanimously agreed. A University press release at the time outlined the “sweeping new financial initiative” that would allow low-income students to graduate debt-free.
But by 2012, aid spending had expanded dramatically, and Skorton acknowledged that Cornell’s aid program was becoming unsustainable for the long term.
Despite aggressive fundraising and cost-saving efforts, the recession — which hit shortly after the announcement of the bolstered financial aid program — has brought along with it unforeseeable difficulties, Skorton said. The severity and duration of the recession was far worse than most had expected.
Skorton said that had the University not decided this summer to resintate loans for some financial aid packages, Cornell could have been forced to take more drastic measures: asking parents to significantly increase their contribution, or eliminating need-blind admissions altogether.
Without “these modest changes, I believe a very few years from now, some University leader would have to make the very hard decision to walk away from this commitment to student access,” he said.
Instead, from Fall 2013, families making less than $120,000 but more than $60,000 a year will have to take out thousands of dollars more in loans. It is a change other schools — including the Massachusetts Institute of Technology — have made in the past few months.
Skorton described the changes that will go into effect next fall as being “modest.”
Half of all Cornell students do not graduate with debt, and among those who do, the median debt is slightly under $14,000, compared to the national median of $20,000 to 25,000, according to Barbara Knuth, dean of the graduate school.
Skorton said he himself “borrowed much more money than we’re asking students to borrow currently,” taking 21 years to pay off his own loans after he finished school.
In comparison, Cornell’s aid packages offer, “I believe, handleable amounts of loans,” Skorton said.
The decision to increase loans in financial aid packages was carefully calculated, Knuth said.
Knowing they had to rein in ballooning financial aid expenses, administrators deliberated over where to scrimp and save. Ultimately, they decided the people who should shoulder the brunt of the financial aid changes should not be families, but students.
“Is it an additional burden having more loan obligations, or ... covering more [of the] cost of education? Do we put that [burden] with the student who is earning a Cornell degree and therefore will be out in the marketplace with a Cornell education and the quality that implies, or do we put the burden on families?” Knuth said.
Ultimately, University officials decided to increase the loans students must take out to finance their Cornell degree — stemming from their belief that the “obligation and responsibility for the Cornell education [should be kept] on the student who is then going to be earning that degree and having increased marketability once they graduate,” Knuth said.
At least in recent years, numbers seem to support the value of a Cornell degree. A report released last year indicated that for the third year in a row, the University saw an increase in the number of students who reported finding employment within six months after graduation.
“With those things in mind,” Knuth said, “yes, we will continue to monitor … what the impact [of the change] is on middle to low income student enrollment. But given that there could’ve been more significant changes for families, we need to expect that any negative impacts are going to be limited.”
Although it seems doubtful Skorton will again ask the University to dip into its endowment for aid, as he did in 2007, the president restated his commitment to providing financial aid for current and future Cornellians.
“Even though current students … will not be affected by these modest changes, to future generations I want to make a promise that my successors can keep: that we have a sustainable commitment to need-blind admission and need-based student financial aid,” Skorton said.