Wed 25 Jun 2008
Financial Aid
Posted by David Dudley Field '25 under Financial Aid, Morton O. Schapiro at 8:36 am
In response to a question on financial aid, Morty told a story about an alum who is a college professor. Her son had been accepted by Williams and by an Ivy. [Morty did not so say directly, but the school was almost certainly Harvard, Yale or Princeton.] The alum told Morty that the Ivy was charging her family $20,000 per year less than Williams proposed. She just thought he ought to know. [EphBlog readers already know this and also know that Morty does not like bargaining.]
Morty used this anecdote to highlight some of the, in his view, absurdities in current financial aid packages at elite colleges. Morty had no problem with many of the recent changes. He thought that it was fine to allow the families of “poor” students (meaning families from the bottom half of the income distribution) to pay nothing for their child’s education. He seemed comfortable with eliminating student loans. But he felt strongly that HYPS were going to far, that offering financial aid to a family making $180,000 (and who had been making similar amounts for years) was ridiculous and that it was absurd to describe such aid as “need-based.” Morty also worried that, if Williams were to match the generosity of HYPS, it would set off a chain-reaction among other schools. Amherst, Swarthmore, Brown, Dartmouth would have no choice but to match us. Morty felt strongly that this would be a bad outcome, that these rich families ought to pay for the college education of their children. He implied that the current equilibrium, with HYPS being much more generous than other schools, was somewhat stable.
Morty also pointed out that much of the news coverages of these aid policies missed some of the juicy details. [I am embarrassed to admit that I missed these details as well.] For example, the family contribution for income levels from $120,000 to $180,000 is around 10% at Harvard. If your family makes $180,000, Harvard will only charge you $18,000. Morty pointed out that this was true but highly misleading. What happens if your family makes $181,000? Does Harvard charge you the full $48,000? Wouldn’t that make for a pretty horrendous marginal tax rate? Make an extra $1,000 and, not only does Harvard take all of that money, but it takes an additional $29,000 (post-tax!). Imagine the fellow offered a bonus at the end of the year and telling his boss, “No! Don’t give me the extra money!”
Morty explained that, of course, this is not the way things work. [I have never seen anyone point this out before.] Instead, the family who makes $181,000 still gets a huge break from Harvard, as does the family making $182,000, the family making $183,000 and so on. They may have to pay more than 10% of their family income to Harvard, but not much more. Morty said [not sure if he was estimating or claiming this as fact] that financial aid at places like Harvard actually goes to families making up to $280,000 because there is a smooth slope as you move above $180,000. In other words, the only families that pay the sticker price at Harvard are those with family incomes above $300,000 or so.
Below are highlights from an article which outlines Harvard’s new policy and my comments.
The main points of Harvard’s new policy are:
* An income-based standard. Families with incomes from $120,000 to $180,000 are asked to pay 10 percent of their income toward a child’s cost of attending Harvard: from $12,000 per year (compared to the current cost of $19,000) to $18,000 per year (versus the current $30,000.) For families with incomes below $120,000, the contribution will decline from 10 percent to zero (already the standard for families at an income level of $60,000 or less). This reduction, totaling one-third to one-half of the current cost to those families now required to contribute, would, Harvard estimates, make the price of a College education for students on financial aid comparable to the cost of an in-state education at leading public universities.
* No loans. In calculating aid packages, Harvard will no longer expect students to take out loans; it will provide increased grants instead. For students from the lowest income cohorts, that means an additional $1,000 per year of scholarship aid.
* Eliminate home equity. Harvard will no longer consider home equity in calculating a family’s ability to pay; in practice, this will reduce the expected contribution toward the cost of attending Harvard by $4,000 per year.
1) Can we do a back of the envelope calculation to estimate how high family income can go before Harvard stops offering “need-based aid?” If the percentage of income demanded goes from 0 to 10% as family income rises from $60,000 to $120,000, then the rate of change (assuming linearity) would be 1.67% per $10,000. So, a family making $90,000 would be expected to pay 5% (or $4,500) toward tuition. Assume that this 1.67% per $10,000 continued once you went above $180,000. A family making $200,000 would be expected to pay 13.3% (10% base rate + 2 times 1.67%) or $26,680. Doesn’t that seem like way too high a marginal tax rate? The family’s income has gone up by $20,000 and its bill from Harvard has increased by $8,680. And don’t forget that the family pays with post-tax income. So, that $20,000 increase pre-tax is only around $13,000 (more or less) post-tax, so the marginal Harvard tax is more than 50%. Of course, it would be tough for any family to adjust its behavior to meaningfully game this system, so perhaps Harvard can get away with charging high marginal rates. And these families are so excited to be getting any financial aid that there are probably few complaints.
Anyway, if the increase were actually at a 1.67% per $10,000 above $180,000, then Harvard would stop aiding families at an income of around $240,000. For Morty’s estimate of $280,000 (and he did mention that number specifically) to be correct, the marginal increase in percentage charges would be around 0.7% per $10,000, or about half my estimate for the marginal increase going from $60,000 to $120,000. Such a rate would make the marginal tax rate problem described above much less severe.
2) Williams went loan-free last year. Related commentary here and here.
3) Williams still counts home equity, but not as much as it used to.
The central dilemma is the same as always. There are hundreds of students who are accepted by Williams and by Harvard/Yale/Princeton/Stanford. We all want more of these students to choose Williams. We don’t want all of them to do so, of course. Many would be miserable at Williams. But many would be better off if they became Ephs. Yet, money does matter. I have no problem telling an applicant that she is better off at Williams than at Harvard, all else equal. But what if Williams is demanding $80,000 more in tuition from her family over the next four years? Is Williams that much better than Harvard? Perhaps.
And that is the central problem with Morty’s (and the Trustee’s) refusal to match the prices of competing schools. They are pricing themselves out of the market for the most outstanding students.
The article also notes:
According to Fitzsimmons, 53 percent of undergraduates now receive grant aid; that cohort typically comes from families with incomes of $180,000 (between the 90th and 95th percentiles for family incomes nationwide) or less. (About 225 students whose families’ incomes exceed $180,000 also receive grant aid, reflecting circumstances such as health crises or multiple children in college at once.) The remaining students do not qualify for financial aid—meaning that roughly half of current undergraduates come from the top 5 to 10 percent of families, measured by income. In theory, the proportion of undergraduates on financial aid could rise if the new program encourages additional talented middle- income applicants to seek admission.
Nice spin! Although, in theory, more “middle class” (meaning family income less than $180,000) kids might apply to Harvard, there are just not that many US citizens with Harvard-level credentials who don’t already apply to Harvard. A little publicity won’t hurt, but the major effect here, in terms of increasing the percentage of students in financial aid, is that Harvard is just redefining “need” upward. Families with $200,000 incomes don’t get aid now (typically). Next year, they will. Presto! Harvard is more socio-economically diverse. The reductio ad absurdum would involve handing $100 to every Harvard student on the first day of classes. Everyone at Harvard would then be getting financial aid!
He [Fitzsimmons] also cited survey research showing that students from the highest-income groups enjoy “differential access” to the undergraduate experience. Aid recipients are constrained in their ability or willingness to explore unpaid research opportunities or internships, to spend time with friends (as opposed to working or helping their families secure loan funds), to study abroad during the summer, and so on. Fitzsimmons called this finding a “kind of Upstairs, Downstairs situation,” resulting in a “diminished experience” for half the student body.
The changes not only build on prior efforts to bring private education within reach of lower-income families, but also reflect heated competition among private institutions to liberalize their aid offers.
True! Isn’t competition a wonderful thing?
Harvard’s financial-aid initiative started in 2004, when President Lawrence H. Summers announced that families with incomes below $40,000 would no longer need to make any contribution to the costs of educating their children at the College, and such contributions were reduced for families with incomes between $40,000 and $60,000 (see “Class-conscious Financial Aid,” May-June 2004, page 62). Yale, Stanford, Penn, and other private institutions began comparable programs, and public schools such as the University of North Carolina promoted their augmented aid programs. Harvard’s threshold rose to $60,00o in 2006, with reduced contributions expected for families with incomes from $60,000 to $80,000 (see “Aid Augmented,” May-June 2006, page 69).
During 2007, Amherst, Davidson, and Williams announced plans to eliminate loans, emulating Princeton. (Princeton also excluded home equity from aid calculations, as did Stanford, which had earlier reduced the weight of that asset in its aid awards.) On December 7, just ahead of Harvard, Duke—nearing the conclusion of a $300-million financial-aid campaign—eliminated parental contributions for families with incomes below $60,000; moved to help students with family incomes below $40,000 graduate debt-free; reduced loans for students from families with incomes up to $100,000; and capped loans for families with higher incomes at $5,000 per year. Duke estimated the cost of the initiatives at $12.7 million in the first year, a 17 percent increase over current spending on need-based, merit, and athletic scholarships.
Always good to see a Williams mention. Of course, Harvard being Harvard, there is a tendency to pretend that everything starts in Cambridge. In fact, the real start to this battle seems to be when Princeton went to no-loans in 2001. As Morty tells the story, the portion of Princeton’s endowment that is dedicated to financial aid had grown so large that Princeton had no choice but to go loan-free.
Classic EphBlog posts on how competition lowers prices are here, here, here and here. Fun stuff!


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42 Responses to “Financial Aid”
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Loweeel says:
The problem with these calculations are that they are attempting to apply a national standard to a program that varies pretty wildly. Yes, output is much easier to game than input, but it is also far more equitable. Because trying to tailor aid to need is the name of the game, looking at
1) No correction for family size is the most obvious. With multiple kids in college, or more problematic for the parents, some in private school and some in college, the parents may not have much money left.
2) The cost of living in, say, Cambridge or Manhattan, is far higher than in, say, Boise. A family living in most parts of Manhattan on 120K may well qualify as poor, especially with more than one child.
3) Related to the above, the issue is after-tax income, not before tax income. A family in Boise will pay a lot less in state and local taxes than will a family earning the same size in Manhattan or Cambridge.
Thus, the 10% of pre-tax income hits the Manhattan/Cambridge/Newton family in the 120-180 range a lot harder than it hits the Boise/Oklahoma City family.
June 25th, 2008 at 9:55 am'10 says:
My father finished up his doctoral degree three years ago and was finally employed last spring. Since then, my family contribution went up from $12,000 to $37,000. (I also have a younger sister in a catholic prep school, and the parents have already taken out a second mortgage) I could go on with more details, but quite frankly, if Williams doesn’t offer us something more doable, I can’t come back. It’s times like this I wish I had taken Yale up on it’s offer. Financing a college education seems to be very similar to taxation– screw the middle class.
June 25th, 2008 at 11:13 am'10 says:
just to clarify: the above comment is not by me; there are multiple people using the handle ’10.
June 25th, 2008 at 11:25 am–the ’10 who’s been posting most often recently
FROSH/SOPH MOM says:
to ’10 (#2);
Surely Williams will take care of you. It would be a crime to lose you for those reasons…and at this point…
to ’10 (#3);
June 25th, 2008 at 11:36 amYou could call yourself “3am’10″…
batman says:
’10,
You may very well have done this already, but you should contact Paul Boyer, Director of Financial Aid, with a very thorough explanation of your situation. What might be even better is to contact an associate or assistant director of financial aid by phone, get them on your side, and then have someone in there fighting for you. There is no guarantee with these sorts of things, but it is very common for someone’s financial aid package to be reworked to accommodate circumstances that their formula does not account for.
Also, I understand your point about screwing the middle class, but keep in mind that Yale’s (and more so Harvard’s) method of calculating financial aid factors income to a greater degree, not a lesser one. So since the reason for your increase in family contribution is a sudden increase in income, expected family contribution would greatly increase at places like HYPS as well.
June 25th, 2008 at 11:36 amGuy Creese '75 says:
Yes, by all means contact Financial Aid. I have a classmate whose family circumstances changed while at Williams and got to the point where she offhandedly mentioned to Hank Flynt that she wouldn’t be coming back in the Fall. Hank asked why, she told him, and he said, “Don’t worry, we’ll fix it. Your job is to do well here, and our job is to make sure you stay here. Don’t give it another thought.” He was as good as his word, and because of that, Clive has been active in fund raising for Williams ever since.
Remember, Williams is a small college filled with people who want to do right by the students. Speak up, and I bet things will turn out better than you think.
June 25th, 2008 at 11:51 amJG says:
I think the comments from one of the ’10s indicates what I see as a huge issue with financial aid at Williams. Most people don’t realize that their main job doesn’t end after enrollment.
It took until junior heading into senior year before I realized that I could go have a discussion with Fin Aid. They don’t make this known – to students or their families. Obviously this gets complicated by the fact that many parents don’t want their kids to know the details of family financing (much more common in lower-middle and middle class families than lower or upper IMO).
But my experience (for myself and with friends) was always that they were willing to work with you – maybe not to get everything you think you need, but to at least come part way or try to identify loans or something else when possible. Now if only people knew this before reaching the point of “I just might not come back.” I assume it would be overkill to have an in-person meeting with all returning students, but they could at least make such an option more explicit. I’ve often told prospective students my story that the Financial Aid office played a key role in my choosing Williams – partially because they matched another offer, but mostly because of their kindness, professionalism, and speedy response.
June 25th, 2008 at 12:51 pmKen Thomas '93 says:
1) MS’s key phrases IMO were approx. “HYPS are redefining merit as need;” and “I don’t see that as fair.” This was within the context of presenting a “spectre” of W Dartmouth Amherst Swarthmore matching HYPS’s pricing scheme (“if one of us did I think we all would [have to]”– and, being the only LACs that could do so,– thus “put[ting] the other[LAC]s out of business.”
June 25th, 2008 at 1:42 pm'10 says:
Morty can think whatever he wants about the “fairness” of what HYPS are doing, but if Williams wants to attract top-tier students it’s going to have to compete financially. Call it merit aid, need aid, whatever, it’s still money and it has an enormous influence over middle-class families.
I love being at Williams, and I’m almost certainly happier here than I would have been at Harvard, but if Harvard had offered its current financial aid options when I was applying there’s almost no way I could have turned them down. Williams may be better than Harvard, but I have a hard time imagining that it’s $150k+ better.
– “3am ’10”
June 25th, 2008 at 2:08 pm(F/SM: have you considered I could be on the West Coast? Ephblog’s 3am is only midnight in California…)
Pre-Frosh Mom says:
6/25- To ’10 or any other current Williams student who might read this blog- It is imperative that you contact the financial aid office whenever you think that they’ve been unrealistic to your circumstances. Based on years of experience as an undergraduate & graduate student dealing with fin aid offices, they will try to help you.
You must also understand that it’s a process of negotiating. For example, if your family has home equity, some fin aid policies expect your family to tap into it. This might not be reasonable if the home is in a location that has appreciated markedly & your family could now not afford to buy it, which in turn means they can’t tap into their equity. The fin aid office won’t necessarily recognize this unless told. They use formulas that might not apply to individual circumstances.
In relation to Harvard & Yale’s dramatically different new fin aid policies, Williams has historically been relatively generous in their calculations, ie the institution tends to give more. I would guess that for middle income families the difference would only be in the range of a few thousand dollars now that H&Y have increased their fin aid budget. I would be very surprised if whoever heads the fin aid office is not looking into this.
June 25th, 2008 at 2:53 pmPre-Frosh Mom says:
On a separate issue- I heard that Yale hopes to use their new fin aid policy to attract athletes whose families could now receive financial aid.
June 25th, 2008 at 2:55 pmJeff Z. says:
First, it wouldn’t put other liberal arts colleges out of business — no more than Williams having a new student center, better faculty ratio, etc. does — it’s not like, generally, kids who are choosing Kenyon have the option of attending Williams or Amherst instead, so I see no one this will impact other than Williams’ immediate competitors.
A bigger question is, can Williams even afford that type of aid? Harvard, Yale and Princeton all have such massive endowments that each could easily be free for all undergrads and it wouldn’t be an issue — there would be no material change to anything else happening on campus. As huge as Williams’ endowment is, were it (or its closest peers like Amherst) to adopt such a policy, I imagine it would require a huge donor or two to enable the policy (which is certainly not out of the realm of possibility) or there would need to be cuts in some other area, bigger classes, or worse facilities (although as of 2012, hard to imagine what facility could really be improved upon in any event), or fewer dollars for speakers and events, etc. etc. Not all that many kids are, even when fin aid footing is equal, choosing Williams over HPY. How many students per year who (a) get accepted to both (b) are middle class (since they are equivalent cost for low income or the super rich) and (c) would choose Williams costs being equal are we talking about here? 10 kids a year? If that? Is it worth changing a policy for those marginal 10 kids when they can be replaced by some other 10 who are not materially worse applicants? Maybe some of those kids would still choose Williams anyway, say if they really wanted to play soccer at Williams but would be unable to at Harvard, or for some other reason like that. Again, I would be very surprised if the entering class would look materially different if Williams were to match the aid policy for H,Y,P, so if there is no reason beyond pure expediency for doing so, I am with Morty hear. (And yes, if Williams were to unilaterally match, it would probably take a not-insubstantial number of kids from Amherst, Dartmouth, Brown, etc, but as Morty points out, were Williams to match, those schools would soon follow).
June 25th, 2008 at 2:56 pmFROSH/SOPH MOM says:
To ’10:
Begging your pardon, but it was in reference to a (your?) comment:
“Some take interest in the “life of the mind” and seek out the famous 3 a.m. intellectual conversations we’re all promised when we come to college…”
…which, coincidentally, also arrived at 3 am-ish, EB time…
June 25th, 2008 at 2:57 pm…which either way, was meant in fun…
…and a way to distinguish yourself from the other ’10 above
FROSH/SOPH MOM says:
to pre-frosh mom:
I thought that Williams, (and several other schools) were planning on taking ‘home equity’ out of the loan equation soon… starting this Fall…(?)
Am I mixing this up with Harvard’s new Admissions procedures?
June 25th, 2008 at 3:03 pmfrank uible says:
Ken: I believe Pomona and Grinnell are 2 LACs which are the equivalent or better than Williams financially (on an endowment per student basis) and roughly the equivalent academically.
June 25th, 2008 at 3:12 pmPre-Frosh Mom says:
F/S Mom: I only gave home equity as a simple example where a family & fin aid office might have different points of view. I really don’t know the specifics of Williams policy, eg. what percentage of equity they’ve ever considered.
June 25th, 2008 at 3:22 pmFROSH/SOPH MOM says:
I just noticed that David included that info above. Williams has put a cap of sorts on home equity with ‘flexibility’ in the consideration of it as well.
I would love to see them copy Harvard’s stance, though. For those with highly fluctuating incomes, it’s an important factor.
June 25th, 2008 at 3:33 pm'10 says:
Jeff Z.: “Not all that many kids are, even when fin aid footing is equal, choosing Williams over HPY. How many students per year who (a) get accepted to both (b) are middle class (since they are equivalent cost for low income or the super rich) and (c) would choose Williams costs being equal are we talking about here?”
I don’t know how many current Williams students explicitly turn down HYPS (although I’d guess it’s more than 10 per class), but there’s a larger set who implicitly reject them by not even applying. Some kids apply ED to Williams; others (including myself) apply RD but didn’t apply to HYPS because we knew we would prefer a small LAC environment to the Ivy insanity.
But, those preferences only go so far. If I had known when applying that Harvard would be about $35k/yr cheaper than Williams (which is currently the case, though of course it wasn’t at the time), I would have applied to Harvard. If I got in, and I’d like to think I’d have a decent chance, I would have gone. It’s hard to imagine any middle-class kid thinking differently, and pretty much all the Williams students I’ve talked to (most of whom applied ED to Williams) say that if they were re-applying today, they would go RD instead to see if they could get the amazing HYPS financial aid deals.
It seems like your argument boils down to “HYPS already get all the best students, so Williams might as well stop trying to compete and just resign itself to being a second-class school”. You might be right, but it’s a depressing thought. I’d like to think that Williams cane be the same caliber of school as HYPS.
June 25th, 2008 at 3:42 pmJG says:
F/S Mom – they are reducing the home equity amount, but I don’t think totally eliminating it – at least not for all income levels.
On a separate note, there are a helluva lot of people who want to go to Williams. There are completely qualified, “best of the best” people sitting at the top of the waitlist who missed getting outright acceptance mostly on chance (and may have been admitted at HYP. If there are a handful of people that are getting the most need-based aid we can give after discussing/negotiating with FinAid and still choose to go elsewhere for the money, it is too bad but what can we do? Williams has aid policies and it has movement within those parameters, but it can’t just hand over a pile of cash because a family making nearly $200,000 can get more at Harvard. Bullshit. And things like having 4 kids in college or some other extenuating circumstance is already considered by FinAid, and would be looked at again if an applicant spoke with them. It doesn’t mean that any wish will be granted. Again, there are policies in place for a reason.
Even a school as well-funded as Williams has limited funds available for student aid in any given year (and that will continue to be limited because there are always competing priorities). That is a decision made in budget allocations far above the heads of the people actually doling out aid packages. I don’t want that limited pool going to people who don’t really need it. Sorry, just the way I feel. I think a lot of people who think they “need” money don’t actually. It would be easier, it would be nice, it would be helpful, but it might not really be “needed.” Now that the messed up home equity situation is being addressed in need calculations, I think by and large FinAid gets things right – and more so if you ask them to double-check or wiggle a bit on the amount.
Perhaps I’m jaded by the fact that my parents and I are still paying off Williams, have never ever owned a new car, always lived in old small houses, etc. but I want to point out that a family bringing in $180,000 is not suffering unless they are also supporting a half dozen kids. And anyone who says “$180,000 ain’t what it used to be” is totally missing the need forest for his/her elitist trees.
My family contribution was still in the range of $10,000/year when my parents combined made less than 1/3 of that $180,000 number and my brother was also in college. And with that kind of income, we had a home, a car, had fun occasionally, with no need to beg or panhandle or anything. Yes, things cost more now than they used to but not that much more (I graduated in ’01 not ’51). “Need” is a malleable concept. After a certain amount of money, you are talking about money for vacations, nicer cars, nicer houses, nicer things. Those are all well and good, but don’t reflect “need.”
And to beat a drum that David usually likes – I’d rather any extra funds the trustees are willing to toss for FinAid go to international students with real need, rather than people in the U.S. making $180,000 or more.
June 25th, 2008 at 3:51 pmFROSH/SOPH MOM says:
I’m pretty much with you, JG. If you can pay, then pay. And we do…oh boy, do we. Our monthly tuition bills are more than our mortgage.
The first visit home, my frosh and I were talking about classes, and he fessed up to having missed one (just one class) in the first few weeks of school. I sat him down and we put pencil to paper to figure out just how much money was wasted in the missing of that one class. It was an eye-opener for both of us…with the result that there have been no absences since.
However, back to the loan issue…
June 25th, 2008 at 4:21 pmI am certainly no expert on this subject, but I believe there are circumstances where the home equity factor can present a very misleading financial profile… and prevent some much-needed aid.
Jeff Z. says:
’10, first of all, I most certainly don’t think that. But Williams relative yield prior to the new financial aid against those four is somwhere between 10-20 vs. 80-90, I’d like to see that improve not decline certainly, but I am not sure how much that will ever change even if Williams offered a discount compared to those schools. And the point I am making is NOT just looking at kids who got accepted to Williams and one of those 4, but also kids with family incomes in the specific ranges in which HYPS offer materially better aid, who would choose Williams all things being equal but now would not due to a price differential. Even if ten percent of the class at Williams is turning down HYPS (I’d be pretty surprised were it more than that, and my guess is that it is less) how many of those 52 kids are we talking about? Maybe a dozen tops? To entice these 10 kids to come, Williams would then have to, if changing financial aid for everyone, spend millions of dollars extra on kids who would have come to Williams anyway and in many cases who come from families who really don’t need the level of aid Harvard is offering, which goes well beyond true “need.” It is a cost benefit analysis and unfortunately because we have to speculate about the numbers, impossible to make fully informed analysis.
Regarding your point about ED or applying to those schools, that is an interesting one. I still think you are exaggerating in terms of numbers, because even before the new regime, financial aid awards varied wildly so kids would not have applied ED if they were really worried about the aid package, but you are probably right there would be some marginal impact in that arena as well that is worth considering.
One possible idea: Williams agrees to match those aid packages for any kids who are choosing between it and H/Y/P/S. Might create some problems (kids applying to certain schools only to leverage more money out of Williams, different levels of aid for similarly situated students at Williams), but it would be a cheaper way to avoid losing students to the only schools that Williams has much worse than a 50-50 relative yield with …
June 25th, 2008 at 4:21 pmJG says:
Thanks to Jeff Z for putting the point I was attempting to make in my rather long-winded rant more clearly. The cost of changing a policy that would give the handful of students for whom the cost differential matters in their ultimate decision (and I do think it is a handful) is not worth the benefit from those few students. We can’t get into the “if the policy now were what it was when I applied” game. First off, how would you possibly know what kind of package Williams was going to give you versus Harvard? We sometimes give people much better packages.
At a higher policy level, I think education should be absolutely free right on up through college, but I know such arguments don’t fly with most of the people on this blog. But within the system we have, I think Williams has lately done quite well at making things more fair.
I also 100% disagree with the “we’ll match HYP” idea. Why privilege a few schools like that? The idea is about finding the right fit, and encouraging kids to randomly apply to Ivies in the hopes of getting a bigger aid package to compare to Williams just boggles the mind. Also, since we give some students better packages than HYP, we get a discount if that is the case? And what about amHerst? Swarthmore? Just a big bad can of worms.
June 25th, 2008 at 4:49 pmJeff Z. says:
Yeah, you’re right JG, just throwing it out there but raises way too many issues. I’d rather lose the marginal (and I truly believe it is marginal at worst) few students to HYP and replace them with some of the many, many, many equally deserving applicants Williams rejects each year …
June 25th, 2008 at 6:37 pm'11 says:
I see the arguments about aid for those making 180k, but what about a family with one wage earner making less than 100k? Is income based aid a good idea then?
Sometimes it seems like you get penalized by the Finacial Aid office for getting an outside scholarship, or for saving for college. Some sort of income based aid would help with that.
June 25th, 2008 at 7:26 pmPre-Frosh Mom says:
Williams’ “no loan” policy is a major improvement. With it, even for the potential 10 students whom JZ speculated might want to cut a deal, matching Yale or Harvard’s fin aid package, I would guess that the difference would be in the range of $5-10,000, an annual, possibly cumulative expenditure of $100,000 per class, much better than a blanket financial aid policy that surely would increase applications by students who hope only to get a tremendous financial aid deal up front & are not that interested in a Williams education.
JG, in line with an ideal world of no cost college education I wish that for the current upper class students with loans that Williams would pay them.
In reading that F/S Mom’s monthly tuition bills are greater than her monthly mortgage, I envisioned instead of a country house in the Berkshires her son enjoys the pleasures of being in Williamstown… if only there was a lovely house for parents’ pleasure.
June 25th, 2008 at 10:34 pmJG says:
Pre-Frosh Mom – I totally agree with you on having the loans of former students paid or current Frosh-Seniors. I still have mine from Williams and would love a little help. No such luck. Each year, we all look back and say “what if.” I’m trying to look forward instead, to not dwell on the impact that had on my life and ability to make a start. I have my moments (see comment above) but generally really do keep in perspective all that I gained at Williams. Who knows what would have happened or what kind of person I would have been elsewhere, but I wouldn’t change a minute of my time at Williams because it really shaped who I am at a crucial time. Do I wish I had maybe paid a little less for it? Sure. But was it worth every penny? You bet.
’11 – the situation you describe is taken into account in the Williams system, at least to a certain extent. We don’t have a rigid income-based system. They at least try (as much as they can from the info provided) to balance the competing expenses of the number of dependents, other debt, etc. And the “penalizing” for outside scholarships happens everywhere I think. Williams has improved that somewhat over the years, although I don’t know the exact plan now. As far as college savings, if they expect you to chip in that money the first year, it won’t be there in subsequent years and therefore it won’t be in the calculation. College savings is meant to pay for, well, college, and they do plan on you putting it all in. Again, if you put it all in as a frosh, your soph year package will be substantially different.
June 25th, 2008 at 10:56 pmFROSH/SOPH MOM says:
Pre-fm:
It is a chunk of change, no doubt about it. But we planned for it.
There were other options; good schools that would have cost much less…but they weren’t Williams.. my son’s first choice. And when the shoe fits…and it is of the “finest Corinthian leather”…(okay, dating myself here!)…well, then…
Per the no-loans policy newsletter:
“The new policy applies to all future aid awards, including those of current students. First-years, sophomores, and juniors will see the change reflected in their award letters for 2008-09.”
So, JG is out of luck, but it is a load off of many others who thought they would be owing $$$. It would be interesting to hear from them about this.
June 25th, 2008 at 11:10 pmcurrent eph says:
I think we all agree that it would be nice if Williams’ attracted more than 15% of the HYP cross-admits, and that Williams’ not competing for the wealthiest of those cross admits won’t help any. However, I am sure we also agree that it is a zero sum game–Williams is wealthy but we don’t have unlimited riches…money for this will come at the cost of money for something else. I am sure that we lose more middle class students to second tier schools with merit aid than we do upper middle class students to HYP. From a cost-benefit perspective, I am sure most would agree that it would be better for us to be more generous to the middle class students already receiving aid at Williams, than to expand the definition of need–not only would some of these middle class students turning down Williams because they didn’t receive enough aid start attending Williams, but it would definitely help those middle class students who made a significant financial sacrifice to attend Williams.
One thing that I felt like at Williams was that Williams was not equally a financial burden on all students. Those who seemed hit the hardest were the middle class–students on just a little bit of financial aid. The students who were on full rides seemed to be doing much more swimmingly.
Also, regarding internationals, I’m not sure if directing aid to internationals is the right solution; a student whose parents make $70,000 a year in Bangladesh might seem to be a prime candidate for significant aid at Williams, but because the cost of living in Bangladesh is so minuscule, the aid would most likely be “needed” more by a family trying to live off of $120,000 in NYC.
June 25th, 2008 at 11:44 pmAidan says:
180k a year is barely middle class! Gov’t takes a huge chunk, mortgage, car payment. Outside of a major US city, that’s barely comfortable.
June 25th, 2008 at 11:48 pmKen Thomas '93 says:
{…}Frank: the 360 group datasets show Grinnell, Pomona, Swarthmore, Amherst as higher than Williams in endowment per student. My memory reflects the list above is the one MS used for purposes of example (via a rhetoric of future-propositional anecdote as evidence). (MS also used an example/placeholder institution for the image of “closing doors”, but my memory of its name is…)
Jeff: The argument, at least, I believe, goes something like “colleges outside the top endowment per student, and even within, find that endowment funds are highly restricted and that operating costs are largely covered by tuition revenues [and donations].” YMMV, of course, and I hope your judgment does, but it seems to me that a progressive “market-based” collapse of the current higher education funding system (which MS et al have outlined elsewhere) will, in their account, put financial pressures on the next tier. And: I’m only the messenger.
JG: I don’t disagree with what you’re saying (especially about universal education!), but I find it very difficult to make judgments based on realities and not ‘abstractions and vague, misleading generalizations.” “Sure” in the ~$180K family income range there are families who are taking ‘vacations’ — and I know families in San Francisco with two kids in college surviving on a third of that: but I’ll repeat my mantra: $180K today was roughly $90K in 1986; the families making $90K in ’86 paid less % in taxes (etc); faced radically different (likely overall less) costs of goods; and also received roughly equivalent to slightly poorer finaid from Williams (rough cutoff was $120K in ’86, ~$240K in today’s dollars,… so in this respect I think “we” are comparing apples to apples, and calling the new product “oranges” in order to provoke an audience response, er, “reader reaction”…) (*)
One would really have to go through the exercise of identify ~20 1986 families, and ~20 roughly comparable 2008 families, and looking fairly closely at their lives and economic situations, to get anywhere in making an overall comparison; and I doubt there will be an easy summary of those experiences. (It would obviously be hard to find comparable groups, but hey, might be an okay senior thesis)…
Bar-be-que sandwitch, anyone? Finger fries?
June 26th, 2008 at 12:58 amFROSH/SOPH MOM says:
Food for thought here, Ken…especially the ‘finger’ fries…
However, I’ve got ‘cold feet’.
Frank was leaning towards them yesterday, and I said no…and now I have them today.
But since I’m ‘passing’, allow ‘me’ to take care of tomorrows special.
(Pardon the ‘dish’ everyone…and back to the subject at ‘hand’.)
June 26th, 2008 at 2:00 amJG says:
Am I that out of touch or are some of the commenters on this board? If $180,000 is “barely middle class” then the Census Bureau is having some issues with their stats and should totally look to the brighter minds at Ephblog to put this all together.
Now this link is to a wikipedia page, but I’m heading off to work and don’t have time to do more right now. The chart in the middle is directly from the Census Bureau though. It says that (in 2006 dollars) the median househould income in 1967 was $36,847 and in 2006 was $48,201. Wouldn’t that be closer to the a middle class number than, say, $180,000?
This chart actually also includes some of the breakdown (based on 2005 data) of the percentage of people in the U.S. in those income categories, again showing that the number is more in the $40,000-$60,000 range than anything over $100,000.
I agree that financial aid should consider location, number of dependents, etc. However, for that reason the Williams approach seems better than the Harvard “if you make X amount you pay X percent” system. Under that, sometimes Williams gives you more because you make $120,000 but have 4 kids and live in New York City. Other times, you get less because you have one kid and live in Kansas. Seriously? Do we “match” the HYP number for the kid who can totally afford the family contribution in Kansas, or is it better spent on giving the money elsewhere?
June 26th, 2008 at 7:52 amcurrent eph says:
“The researchers started by looking at income levels. Based on 2005 Census Bureau reports, some 40 percent of the nearly 115 million households in the U.S. earned less than $36,000 a year. That represented just 12 percent of all income. The 40 percent on the next rung up the economic ladder took in between $36,000 and $91,705 — or about 37.6 percent of all income. The top 20 percent, who made $91,705 or more, collected half of all income.
But those numbers don’t adequately reflect the state of mind of those who consider themselves middle class. Surveys have shown that, while people consider $40,000 a year to be the low end of what it takes to buy a middle-class life, some people who make as much as $200,000 a year still consider themselves middle class, the researchers said.”
–http://www.msnbc.msn.com/id/21272238/page/2/
What is “middle class?” The answer seems to be “nobody knows.” If you read the whole article, you’ll see that middle class seems to be largely a function of context–an income that feels like upper middle class in Omaha might be half of that considered upper middle class in New Jersey.
This brings up a whole different slew of issues. There is no doubt in my mind that those who make $180,000 a year often feel squeezed by the cost of Williams. However, there is also no doubt in my mind that–on average–a family making $180,000/y lives a much less frugal of a lifestyle than a family making $90,000/y. In other words, they will have more expensive cars, a more expensive house, live in a nicer neighborhood, take longer/more expensive vacations, eat out more frequently, buy more expensive clothes, etc, etc. The result might be that a family making $180k–because of the financial choices they make–are no less in need of aid than a family making $120k. However, does that mean that this family should receive the same aid, or even the same proportion of their income of aid? I don’t think so!
June 26th, 2008 at 11:44 amfrank uible says:
It all relates to the degree of self-indulgence – in general a not pretty quality.
June 26th, 2008 at 12:35 pmJay says:
To determine this degree of self-indulgence, maybe the financial aid office could ask questions like, how many North Face fleeces do you own, that you paid full price for?
Same question for Ralph Lauren polos and cashmere cardigans in bright colors.
June 26th, 2008 at 12:40 pmRory says:
Jay,
0, 0, 0 and I definitely didn’t grow up middle class :)
One of the fundamental problems of our financial aid system is that it punishes/rewards the student for the parents’ financial decisions. That seems backwards. Loans, in the abstract, seemed like the most ethical method–let the person who gained from the experience pay it back after receiving the benefit of the credential–but they backfired as an option.
Off the top of my head, seems to me the best option is a national service program that ensures affordable higher education for its graduates. Let the elite (foolishly) opt out of that national service year by paying sticker price if they so choose–you either spend a year helping others, or you pay much more for education as the cost of not giving that year. A GI Bill not tied exclusively to military service. Americorps wanted to be that program, but it offered too little to too few to change our educational system.
of course, that’s clearly a pipe dream. but it is nice to dream.
June 26th, 2008 at 2:46 pmPre-Frosh Mom says:
There used to be a type of student loan or graduate fellowship that one paid back through service, e.g. by teaching or working in under-served areas. Does anyone know if programs like this still exist?
June 26th, 2008 at 3:29 pmJG says:
current eph – I read that article to say that all kinds of people think they’re middle class that aren’t. If 80% of the country makes less than $90,000, you’d be pretty hard-pressed to demonstrate to me that someone making $180,000 is middle class, regardless of what they call themselves.
Perhaps I am far too literal, but to me “middle class” implies those whose income falls roughly in the middle area of average or median incomes or some combination therof. Sure, there should be some control in their for household size and cost of living, but I think there are a lot of people out there classifying themselves as “middle class” who are actually in the upper echelons of income-earners in this country. The cost of living is not twice as much overall from Kansas to Boston. There are a few key elements of the calculation – say housing prices – that are more dramatically different, but overall it isn’t quite that stark. Just looking at things like the government pay scale (obviously not perfect) you see locality adjustments ranging from 0% to say 30-ish% (San Fran is actually rated higher than anywhere else most times). Those are based on housing prices, food, etc. over the metro areas and base pay gets multiplied by the adjustment.
If perception were the only measure, we’d have millionaires who think of themselves as middle class – okay, maybe “upper middle class” – but still quite divorced from the reality that the majority of people live with. Now this isn’t a judgment about how much people should make or whatever, I’ll save that for another forum. But when Williams has a limited pool of aid to give out, there have to be priorities. (Is this horse dead yet?)
Pre-Frosh Mom – Peace Corps, Teach for America, and other similar programs will give you funds toward student loans as part of your payment for service, I think usually a certain amount per year you serve. The federal government also now has a program that will pay off federal loans if you put in 10 years of service, if you stay current on your loans, and if you are under certain payment plans (and if that sounds like a convoluted list of if, if, ifs, that’s because the program is deeply flawed, although a step in the right direction).
June 26th, 2008 at 4:31 pmcurrent eph says:
Teach For America actually doesn’t do much for loans directly, from what I understand. TFA has a partnership with Americorps, however, which does–for each of your first two years of Americorps (or TFA) service, you are awarded ~$4,500 in grants to apply towards education. Additionally, I believe that Americorps/TFA have loan deferment programs.
June 26th, 2008 at 5:00 pmfrank uible says:
“Classifying” has a very large social component – at least when it is done subjectively.
June 26th, 2008 at 5:34 pmKen Thomas '93 says:
Two definitions of “upper class” inter pares:
1) The top 5% in income. Thus every household earning above $157,176 in 2004 (NYT).
2) Those who do not have to work, whether by inheritance, investments, or other privileges conferred by birth: or, “those who derive the vast majority of income from wealth, not from work.” (Sociological concept: also, a class that cannot be entered except by birth).
June 26th, 2008 at 9:44 pmPre-Frosh Mom says:
JG & current Eph– thanks for recent info on loan forgiveness.
June 26th, 2008 at 9:58 pm