Princeton remains committed to aid in tight economy
The rising cost of higher education -- a contentious topic even in the best of times -- has become a more pressing issue among colleges, parents, students and the media amid a tighter economy and intensifying competition to attend the nation's top schools.
While Princeton's price tag has gone up for students who pay full tuition -- although not as much as that of many other institutions -- its financial aid budget has increased even more.
Princeton in 1998 began enacting significant changes in its financial-aid policies to make the University more affordable for lower- and middle-income students. The centerpiece of this reform was the unprecedented replacement of loans with grants for undergraduates beginning in the 2001-02 academic year.
Don Betterton, director of undergraduate financial aid since 1975, spoke with the Princeton Weekly Bulletin about the impact of those changes and the future of the "no-loan" policy. An excerpt from the interview follows:
Eliminating undergraduate loans gets the most attention, but how else has Princeton revamped its financial aid program?
We removed the value of the family home from the formula that calculates how much parents are expected to contribute to college. This considerably lowered the contribution levels for middle- and upper-middle-income families. We reduced the contribution rate on student savings from 35 percent to 5 percent, using the same rate that applies to parental savings and eliminating the financial aid penalty faced by parents who save for college in the student's name.
We are now admitting all students, domestic and foreign, on a "need-blind" basis, making us one of only five colleges that admit all students without regard to their financial circumstances. Finally, we decreased the summer savings expectations for lower- and middle-income students.
What is the cost of all those changes?
It is hard to pinpoint exactly because not only did current students receive better aid awards, but the popularity of our changes attracted more needy students in each new freshman class. The best way I can quantify it is to compare our grant budget for this year to what it would have been without any of our changes. Using that comparison, we paid out approximately $10.3 million in additional aid.
If the economy continues to struggle, will Princeton have to rethink this strategy?
Much of the increase in costs for our aid program is due to the fact that we give better financial aid packages, but some of it is undoubtedly due to the fact that some of our families are not making as much money as they were a couple of years ago. We've seen more families with job losses, with bonuses being taken away and various other effects of the economy.
We're firmly committed to staying with these policies. We feel strongly we did the right thing, and we're proud of Princeton's leadership role in this area. To the extent that it is becoming more of an expense than we had originally planned for, we are actively trying to raise more scholarship funds. We hope that will be the way we can take care of whatever extra money is required to operate this program in the future.
The full interview is available in the Weekly Bulletin.
Contact: Evelyn Tu (609) 258-3601