December 5, 2008

Univ. Remains Committed to Aid During Crisis

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Ripple effects from the current economic crisis have permeated all aspects of American society and may pose particularly grave implications for higher education. At Cornell’s Nov. 14 announcement, the newest financial aid initiative raised the pressing question of how the University will preserve its founding principle of “any person, any study” while accommodating the increase in financial need as Cornell struggles with economic constraints.
Independent of the economic crisis, Cornell’s financial aid policy has evolved significantly over the years to adapt to shifting priorities in education.
Cornell’s founders originally thought tuition should be free, with out-of-state students paying an annual fee of $30 — equivalent to roughly $1,900 today, adjusted for inflation. For Cornell’s Ithaca campus colleges in 2007-08, tuition was $34,600, according to the report on Tuition, Financial Aid and Endowment published in May 2008. While Cornell has regularly increased its tuition since 2002-03, it has also increased its financial aid budget at a greater rate.
“Cornell’s financial aid policy can best be described [as] a policy of fairness,” the report stated. “The University’s current admissions and financial aid policy is a modern interpretation of ideas and ideals espoused by Cornell’s founders.”
Michael Walsh grad, student trustee, stated in an e-mail that the cost of higher education has skyrocketed since the University became need-blind 10 years ago.
Currently, 60 percent of Cornell undergraduates receive financial aid and 45 percent receive need-based aid.
Cornell plans to spend $138.9 million on undergraduate financial aid in 2008-09, 97 percent of which will be spent on grant aid that is not repaid to the University.
Important questions followed the announcement of the new initiative — how can the University finance it? Was the new plan budgeted for? Where will the money come from?
“We have been engaged in a process to identify the size of the budget challenge and a strategy for addressing it,” Harris stated. “The financial aid initiative has been part of this process. We are confident that we will be able to meet our financial aid commitments during difficult economic times.”
Challenges associated with this new cost are inevitable, according to Walsh.
“Obviously the University is currently searching for ways to reallocate funding to ensure that the university continues to support its many strong programs, financial aid include,” Walsh stated. “Accessibility needs to be a priority and the recent decision to increase the financial aid component of the capital campaign underscores this.”
Currently it is unclear to what extent the economic crisis will affect Cornell. There has been considerable debate as to whether this newest financial aid initiative was adapted to the changing economic climate or was largely part of the original financial plan announced in January.
“The decision to increase financial aid for our students is not a new subject,” chairman of the Board of Trustees Peter Meinig ’62 stated in an e-mail. “I am pleased that we are ending the same year with an expansion of the program.”
Interim provost David Harris served as the chair on a committee to “review enrollment priorities, and to assess how our financial aid and admissions policies can better support our priorities.”
“We did not have full knowledge of the budget constraints, or what trade-offs would be in the University’s best overall interests,” Harris stated in an e-mail.
Member of the Board of Trustees Prof. Ron Ehrenberg, industry and labor relations, said that the new financial aid program was originated from the highest level of the administration.
“It was driven by the belief that we needed to do more to try to make Cornell affordable for all students,” stated Ehrenberg, who is also a member of the Cornell Higher Education Institute.
A quick response to the current financial crisis was important, according to Walsh.
“The improvements to undergraduate financial aid are … essential during such periods [of financial turmoil] in order to allow for the level of accessibility that attracts a diverse group of students needed to make Cornell a strong university,” Walsh stated.
Cornell is confident to work its way out of the financial circumstances that beset the entire country, according to Meinig.
“That means we need to remain focused on that which is critical to our mission, recruiting the best faculty and expanding access for the best students,” Meinig stated.
Harris commented that the initiative will help provide security for an “economically-diverse” student body during difficult economic times in three ways — by expanding the viability of Cornell as an option for students, by increasing students’ chances of success through reducing the stress of financial concerns and by providing less wealthy students with the flexibility to pursue a range of careers through minimizing loans.
This year’s announcement came at a time when prospective students are still choosing their colleges, according to Walsh.
“Last year’s financial aid plan was announced after potential students had already applied, and Cornell may have thus lost some qualified applicants who believed that there was not any point in applying if they could not pay,” Walsh stated.
Harris alluded to the strengths and weaknesses of the new initiative. One such strength is a transition towards a financial aid plan that incorporates factors of merit.
“[The plan] allows us to shape the class through financial aid, in addition to admissions,” Harris stated. “The weakness is that we are not able to do more.”
Harris expressed concern that some students might be unable to pay the annual tuition of about $50,000 per year.
In the context of the Ivy League, Cornell’s newest initiative and overall strategy for dealing with the economic crisis is more reactive than visionary.
“Our plan is not the most generous in the Ivy League,” Harris stated. “This is because we are less wealthy than some other Ivy schools, and also because we have larger percentages and numbers of students from less affluent families.”