December 5, 2008

C.U.’s New Aid Plan Will Help During Econ. Crisis

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Cornell announced a more extensive financial aid initiative on Nov. 13 at a much-needed time. As the country and its students, face an economic crisis, who will reap the benefits of this initiative?
Cornell plans to spend $138.9 million on undergraduate financial aid in 2008-09, an increase of $22.1 million from last year. While an increase in University spending should help students, how will this new initiative better address the financial needs of Cornell students?
Previously, students with family incomes below $60,000 did not have take out need-based loans. Starting in the fall of 2008, students with family incomes below $75,000 will not have to take out need-based loans. Furthermore, students with family incomes below $60,000 do not need to make any parental contributions. While these contributions will not be eliminated for students with family incomes above $60,000, they will be reduced. As for students with financial need with family incomes above $120,000, Cornell will cap need-based student loans at $7,500 annually.
“The new financial aid program will reduce the amount of loan that a student will have to incur, and will eliminate the parental contribution for some families,” Doris Davis associate provost for admissions and enrollment, stated in an e-mail. “The new financial aid program will alleviate Cornell students from having to take out private loans.”
While this more extensive financial aid program to students comes at a critical time as the country faces increasing economic hardship, some concerns for the new initiative have arisen regarding Cornell’s shift from offering purely need-based aid.
The third component of the new program explains that selected students will receive more generous financial aid packages. According to Simeon Moss, director of Cornell press relations, selected students are those who already qualify for need-based aid and will contribute broadly to the diversity of Cornell. For a student coming from a family with $120,000 income and $200,000 assets, the current system would call for a parental contribution of $20,025. Under the new initiative, the parental contribution would be reduced to $12,500, leading to a savings of $30,100 over four years.
“Selecting students for greater aid based on certain characteristics of their candidacy, whether the student be an athlete or an underrepresented minority, is a fundamental change in financial aid policy,” Ryan Lavin ’09, S.A. president, said. “Students with the same financial need eligibility could have different packages under this new system.”
Compared to peer institutions, Cornell is behind in using their financial aid program to attract athletes more aggressively. Even though Lavin understands this shift will help Cornell maintain its competitive edge, he feels that it comes with some controversy.
“The new financial aid initiative is undoubtedly a step forward, and it will definitely help recruiting,” Lavin said, “but the fact that Cornell awards financial aid based on need that is applied in the same way to all students is something that Cornell has prided itself on and we can’t really say that anymore. We’re still 100 percent need-blind but we’re not 100 percent need-based.”
While Cornell admissions are 100 percent need-blind, meaning that it accepts students regardless of their financial need, the financial aid package offered to many students does not fulfill their full financial needs. According to a study done by the Chronicle of Education, universities of higher education only meet the full need of 18 percent of its students. According to Davis, however, Cornell does not fail in providing financial assistance for its students.
“Once Cornell determines how much money a student needs, we will offer the student enough money to meet his/her need,” Davis stated in an e-mail.
For Mariel Christie ’10, however, this has not been the case. After being accepted early decision, Christie received a sufficient financial aid package. However, Cornell has given Christie less aid in every subsequent year. While Christie has tried to appeal the University’s decision, her experience with financial aid counselors has been disappointing.
“The counselors don’t tell you where it comes from or why it’s that much,” Christie said. “I feel that they overlooked something when making their decision, but whenever I speak with them they only quote a number at me and state that ‘this is the correct aid package.’”
A key reason for discontent among students with their financial aid package is the confusing nature of the program. In fact, Responsible Economic Action Leadership is a student-run organization on campus that has the goal of implementing an online personal finance course that will be available to all Cornell students.
“Your financial position is going something that you’re going to have to deal with much sooner than you think,” said Ilya Brotzky ’10, founding member of R.E.A.L. “You might end up paying more than you have to or be surprised about how much in loans you have to pay. Understanding how your package is calculated will help alleviate a lot of stress.”
While the new financial aid package may “seem great on paper,” Christie said, until students have a greater understanding of how their financial aid is exactly calculated, dissatisfaction will persist.
“The explanations for the financial aid program are very hard to understand without a background in financial aid,” Makafui Fiavi ’10 said. “I don’t understand half of the things they say. I think that making a financial literacy program available to students is essential. Then students can understand their financial aid and how it’s calculated.”