July 7, 2012

Cornell Kills Portion of Financial Aid Guarantee

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In an abrupt reversal after years of expanding financial aid, Cornell announced Tuesday that, beginning Fall 2013, it will no longer provide loan-free aid packages to all students whose parents make under $75,000 a year.

The policy — which will not affect current students — marks a reduction of some parts of the University’s financial aid program, which was bolstered in 2008 to decrease the tens of thousands of dollars in loans the average Cornell student graduated with at the time.

Cornell had eliminated loans for students whose families made under $75,000 a year, replacing them with grants and work-study options. No more. Beginning Fall 2013, only freshmen whose families earn less than $60,000 a year will qualify for loan-free aid.

The revised aid policy will add thousands of dollars more in loans for families. Where they previously would have had to take out no loans, students whose families make between $60,000 and $75,000 annually will now take out up to $2,500 in loans.

Other income brackets will be affected by the policy, too. Those making between $75,000 and $120,000 will take out up to $5,000 — not the current $3,000 — in loans. The only group not affected by the changes are families making more than $120,000 annually, who, as in previous years, will receive up to $7,500 in loans.

As the cost of attending college continues to rise, the cuts could drive deep into some families’ pockets. In 2002, the price of tuition, room and board for a student at an endowed, or private, college was $36,374. Last year, it was $54,701 — a 50-percent jump from 10 years ago.

Additionally, under the new aid program, students who work part-time during the year will have to earn $2,500 — instead of the current $2,000 — as part of their contribution to their aid package. That amount, until now, had not been raised for two decades, according to the University.

In a press release announcing the changes, Cornell administrators lauded the University’s “historic” financial aid efforts and promised that changes were necessary to ensure the “long-term sustainability” of need-based aid.

“We are making adjustments in our financial aid programs that will ensure that Cornell’s commitment to need-blind admissions and need-based aid is not only durable but also enduring,” Provost Kent Fuchs said, according to the press release.

The University noted that, since 2008, Cornell’s financial aid spending has grown nearly 20 percent every year while tuition has grown for some colleges about 4.6 percent annually in that same period.

Barbara Knuth, vice provost and dean of the graduate school, said that even with the changes, the net attendance cost for many students qualifying for financial aid will be lower than it would have been in 2007-08. Before then, some families making under $60,000 still had loans in their aid packages.

“[Cornell] is spending more on need-based financial aid and benefiting more of its students than ever in its history,” the press release stated. The University spent an all-time high of $224.5 million on financial aid in 2011, and 2,900 more students received aid in 2011 than they did in 2009.

Student Trustee Alex Bores ’13 also noted that Cornell expanded its financial aid offerings amid the recession — even drawing from its endowment to do so — as other schools “pulled back” their spending on aid.

Over the long term, this expanded financial aid policy was “unsustainable” for Cornell, Bores said, forcing administrators to reconsider its scale.

“It’s one of those situations where it just comes down to the dollars, and it’s incredibly difficult to make it work,” Bores said.

Those dollars, Bores said, were not tied to the University’s $2-billion tech campus that will rise on Roosevelt Island over the coming years. Although the most expensive undertaking in Cornell’s history, the tech campus will be “100-percent paid for by philanthropy for the first 10 years and even beyond that,” Bores said.Conceding that “nobody likes announcing a decrease in financial aid,” Bores said that both the Board of Trustees and the administration did not make the decision to alter the University’s financial aid lightly. He added that administrators will be watching enrollment demographics “incredibly closely” to monitor how Cornell’s financial aid affects its socioeconomic diversity.

“If we think it has an effect on who will come [to Cornell], we will reevaluate it,” he said. “I think everyone in the administration and on the Board understands the importance of financial aid — not just that it’s the right thing to do, but also in terms of making sure Cornell has a diverse population.”

Original Author: Akane Otani