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Financial Aid

Princeton University admits undergraduates without regard to financial need and then meets the full assessed need of every student who qualifies for financial aid without requiring loans. (In recent years the percentage of the class qualifying for aid has exceeded 60%.) In assessing need, the Financial Aid Office makes allowances for tuition, room, board and other expenses. Until recently, the amount included for board was the cost of a University dining contract. While this worked fine for freshman and sophomore years when all undergraduates are required to live in residential colleges, many students pointed out that in junior and senior years it made it difficult for students on financial aid to afford to join eating clubs, whose board rates are typically higher than the University rate.

Beginning in the fall of 2007, aid levels for juniors and seniors were increased by assuming a board rate that was set at the average cost of an eating club dining contract. This higher board allowance is included whether or not the student joins an eating club, so juniors and seniors on financial aid who join clubs have sufficient support to allow them to afford club contracts, while non-club members have the same level of support to help them cover their dining and other expenses. The average club board rate is increased each year by the percentage increase in the University board rate. (Because club board rates have been increasing faster than the University board rate, a modest gap has developed between the Princeton allowance and the actual average club board rate.) While this policy makes provision in the financial aid award for the average club board rate, it does not provide for the social or alcohol fees that clubs charge in addition to their board rates or for the fees that sophomores pay after being admitted to the clubs in February of sophomore year. Students can request loans to help cover these costs, although one unintended consequence of the University’s policy of not requiring loans is that students today seem more reluctant to borrow when there is no loan in their financial aid package than in the past when most aid packages already included a loan and they were simply adding to it.

While the policy is relatively straightforward (substituting a higher board allowance for all juniors and seniors on financial aid), the implementation is relatively complicated because once aid has been calculated and the family contribution determined, the family contribution of a club member in most cases gets paid partly to the University and partly to the club. The Financial Aid Office explains the process in detail to sophomores and their families, provides them with worksheets, and invites them to meet with aid counselors if they have questions, but we heard again and again that many students and families remain unclear about how the process works.

Here’s an example that the Financial Aid Office shared with the task force. Assume a sophomore whose family contribution after accounting for financial aid is $17,200. The student aid budget (which includes allowances for expenses like books and travel that are not paid to Princeton) is $50,600. The difference between the $50,600 budget and the $17,200 family contribution is met with a $30,700 grant and a $2,700 campus job. The charge by Princeton, including a University board contract, is $47,700. After applying the grant and job, the amount the family pays to the University is $14,300. The family still has $2,900 of its expected $17,200 contribution (the difference between $17,200 and $14,300) to apply to non-University expenses (e.g., books and travel).

When this student becomes a junior and joins a club, the family contribution remains unchanged, but the amount due to Princeton drops from $47,700 to $42,000 because there is no longer any University board charge, and the grant amount increases from $30,700 to $32,320 because of the higher board allowance in calculating need. Now after applying the grant and the job, the amount the family must pay to the University is only $6,980, as compared to $14,300 in sophomore year. If $2,900 of the family contribution continues to be set aside for other expenses, the family then has $7,320 available from its expected contribution to pay the cost of an eating club, which the family pays directly to the club.

What many students told us is that at this point in the process the family may realize that if the student does not join the club, these funds then are available for other family or student purposes or can represent a de facto reduction in the family contribution. Even though the payment to the University has been reduced to help offset the costs of club membership, the nature of the process requires the families of most students on aid to write sizeable checks to the clubs. (In exceptional cases where the family contribution is less than $7,000, there would instead be a partial credit on the University bill that would be refunded from the University to the club on a semester basis, although in almost all cases the student’s family still needs to make some payment directly to the club.)

The director of the Financial Aid Office estimates that the University policy of assuming higher board costs in junior and senior years costs about $2 million a year. (Covering social fees would add another $1 million or more.) She believes that while the new policy has made it easier for students who would have joined clubs anyway to afford them, it has led to only a one or two point increase in the number of aid students in the clubs, and no increase in the clubs with especially low percentages of students on aid.

Chart 8 gives the 2009–10 board fees and social fees for the clubs. Most clubs also charge an additional fee, ranging from $40 to $300, for alcohol and other items. The University board rate for 2009–10 is $5,340, but its allowance for juniors and seniors is $6,960. Its 2010–11 allowance will be $7,173.

Chart 8

Club Board Fees and Social Fees 2009–10

  Board Social Fee* Total
Cap and Gown $7,640 $550 $8,190
Charter $7,450 $150 $7,600
Cloister $7,000 $550 $7,550
Colonial $7,080 $675 $7,755
Cottage $7,200 $630 $7,830
Ivy $7,157 $675 $7,832
Quadrangle $7,100 $500 $7,600
Terrace $6,250 $550 $6,800
Tiger $7,300 $550 $7,850
Tower $7,420 $840 $8,260
Average $7,160 $567 $7,727
* Some clubs charge an additional fee for alcohol; at one club this is referred to as “milk money.”