Princeton increases financial aid grants, helps students on aid afford eating clubs
Princeton's trustees have approved increases in the University's
endowment income spending that will increase grants for all students
who receive financial aid and provide all juniors and seniors on
financial aid with sufficient support to enable them to cover the cost
of an average membership contract at the eating clubs.
The trustees also approved spending increases for other initiatives in undergraduate education, graduate education, research competitiveness and alumni affairs.
"These additional investments in undergraduate financial aid enhance Princeton's affordability in two respects," said President Shirley M. Tilghman. "They provide even more grant support in what is already the most generous financial aid program in the country, under which no student on financial aid is required to take out a loan. They also remove financial barriers for financial aid students who would like to join eating clubs. I hope this additional aid will enable a wider range of students to think about joining the clubs, thereby making them more diverse and more fully reflective of the student body than they are today."
Under the new policy, effective with the 2007-08 academic year, aid levels for all juniors and seniors on financial aid will be calculated assuming a board rate that is set at the average cost of an eating club membership contract not including social fees, which currently is about $2,000 higher than the University's typical meal plan ($6,300 as compared to $4,315 for this academic year). This higher board allowance will be included whether or not the student joins an eating club so that juniors and seniors on financial aid who join clubs will have sufficient support to allow them to afford club contracts while non-club members will have the same level of support to help them cover other expenses.
With the increased endowment spending levels the University also will reduce by roughly $500 a year the amount that students on financial aid are expected to earn from term-time jobs. This will result in an increase of roughly $500 in each aid student's grant. Some 55 percent of this year's freshman class is receiving financial aid, and the average grant for aid students is almost $30,000.
These spending increases follow trustee approval last June of a $25 million increase in endowment income spending that was intended to bring spending into the lower end of the University's target range of between 4 percent and 5 percent of the endowment's market value, a range that was initially established almost 30 years ago. Most of that increase was allocated to ongoing budget items that had been funded from capital reserves, although the increases also supported programmatic enhancements in information technology and the library.
At their recent meeting the trustees decided to expand the upper level of the target range of endowment income spending to 5.75 percent of market value, an adjustment that is expected to reduce the frequency with which spending falls outside the target range and increase the University's long-term average spending rate. "After extensive analysis the trustees concluded that this higher ceiling would better achieve their goal of releasing the maximum amount of spending possible while sustaining a relatively stable spending stream and preserving the purchasing power of the endowment in perpetuity," Tilghman said. "This expanded range helps ensure an intergenerational neutrality in which the benefits of the endowment to current students and future students are roughly similar."
The recently approved spending increases are expected to be the first of several adjustments designed to bring the spending level to 4.5 percent of market value by the start of the next academic year. While most of the areas to be addressed later this year will support capital-type expenditures, the most recent increases are all devoted to high-priority programmatic initiatives.
In addition to the enhancements in undergraduate financial aid, the approved increases will support:
- Expanded social, cultural, intellectual, athletic and civic engagement programming in the residential colleges. Each college will have a director of student life and the resources necessary to create a vibrant social environment, develop signature social activities and host campus-wide events.
- Improvements in the quality and variety of food served in the residential colleges.
- Additional investments in recruiting excellent and broadly diverse undergraduate classes.
- Increased funding for assistants in instruction in graduate-level courses.
- Several initiatives (see separate story) that are designed to increase the University's competitiveness for research funds and expand its research partnerships with the corporate world. These initiatives include the designation of a full-time dean for research and additional staffing for the Office of Corporate and Foundation Relations.
- Several initiatives that will enhance support and services for alumni through the Office of the Alumni Association, including additional staffing for affinity groups, regional association activities and alumni classes; an increase in the distribution of the Princeton Alumni Weekly to graduate alumni; and transfer to the University of a number of reunion expenses that are currently underwritten by the returning classes.