Maybe I Was Too Hasty ...

With regard to the question I posed in my last blog, maybe the answer I offered was too absolute.

Of Harvard (and now Yale, Dartmouth and a few other colleges) revamping financial aid for students from families whose income falls within a certain amount (middle to upper-middle class), Bryn Mawr dean of admissions and financial aid Jenny Rickard said:

Harvard has started to redefine the financial aid landscape, and it’s redefined it in a way that is quite beneficial to the wealthiest institutions … It is just a handful of schools that can really respond this way, but it leaves others kind of pulling their hair.

Some officials, in particular at the colleges that don’t have $35 billion in endowments, say there will now be pressure to provide more aid to wealthy high achievers, thereby reducing the amount available to poorer students. They also predict that the number of low-income applications would decline. Dr. Donald E. Heller, the Director of the Center for the Study of Higher Education at Pennsylvania State University, said that those applications would just get “crowded out.”

I smell fear.

Fear that universities would have to use more of their endowments just to try to compete with the Ivy Leagues (only an average of 5 percent of the endowment is used by schools for scholarship and financial aid annually). Senior Republican on the State Finance Committee, Senator Charles E. Grassley of Iowa, has recently suggested that colleges be required to spend more of their endowments as a condition of keeping their tax-exempt status. Concurrently, a bill was approved by the House Education and Labor Committee that would “seek to shame, by listing publicly, those colleges that raise tuition significantly faster than their peers.”

But at least that fear incites action. Maybe not from the schools as of yet, but the government (yes – our government) is taking heed:

New York State Senator Kenneth P. Lavalle head of the Senate Higher Education Committee, plans on introducing legislation that would provide enough state aid to limit to 10 percent the amount of income that a middle-class family would have to pay for college. Governor Eliot Spitzer of New York has also recently proposed selling part of the state’s lottery business in order to create a $4 billion endowment for public universities (which is still less than the $5.7 billion growth in Harvard’s endowment just last year – and would be distributed to more students)

Dr. Robert J. Birgeneau, Chancellor of the University of California, Berkeley, proposes that in order for other schools to compete and attract students, they must build a larger endowment.

Easy enough? Or maybe schools should appropriate more than 5 percent of their endowments to financial aid. Now that was easy.

Oh, and by the way, Northeastern's report card grade for last year ... please pay attention to the failures: