Fri 5 Feb 2010
Continuing our two week review of the 2010 Provost Report.
Another pie chart that should have been a bar chart with 10 years of data in it (archive here). More importantly, this is the first example of a statement that might mislead an inattentive trustee (i.e., one that does not read EphBlog).
Williams is a different college from what it was ten years ago in a number of ways. One is that the student body has become much more socio-economically diverse. That’s the main reason why the percentage of our operating spending devoted to financial aid has grown from 13% to 21%.
There is evidence that Williams has become more socially diverse, in the sense that a higher percentage of students have parents without college degrees now than in the past.
There is no evidence that Williams has become more economically diverse in the last decade, at least with regard to US students. So, there is no good (at least public) evidence the “main reason” for increased spending on financial aid is the change in the mix of students who attend Williams.
I have reviewed this topic many times. See below for a refresher.
1) Looking at the increase in students on financial aid over the last decade tells you little about the decrease, if any, in student family wealth. Imagine that Williams raised tuition to $1 billion dollars but still met everyone’s demonstrated need while enrolling the exact same students. Suddenly:
100% of students are on financial aid. Look how socio-economically diverse we are!
Williams spends $2 trillion on financial aid, orders of magnitude more than we have in the past. Look how socio-economically diverse we are!
These statements are true but they are, obviously, misleading. Raising tuition and giving out more aid does not, in and of itself, mean that students are coming from poorer families. Ending loans does not necessarily, without a change in admissions policies and/or relative yields, increase the number of poor students at Williams. To figure out if Lenhart is telling the truth, we need to look at the actual income/wealth of Williams students.
2) In theory, Williams might have increased the number of poor students and decreased the number of rich students. And, perhaps, by increasing the number of (honestly?) poor international students and decreasing the number of (relatively) rich US students, this has happened. But there is no evidence that, among US students, average family income/wealth has declined. None. Zero. Zip. Zilch. Previous discussion here. Summary:
The key conclusion is that, while the number of families getting aid has risen (853 to 990 or up 16%), the median income of those families has risen faster (65k to 79k or up 22%) so the wealth of the family at the 20th percentile of all Williams families has risen (about 10%) as well. If anything, Williams is less socioeconomically diverse than it was a decade ago.
There are various complexities to account for in terms of inflation, changes in average family size and so on. But, big picture, there is no evidence that there are more poor US students at Williams today than there were 10 years ago.
3) Even worse, I have actually pursued the College on this point. It is an easy question to answer because the College has good family income data on US students who apply for financial aid. Consider just the 400th poorest student at Williams. (He would be at the 20th percentile of the income distribution.) What is his family’s income? (Obviously, we don’t need to know his name.) What was the family income of the 400th poorest student 10 years ago? That simple comparison wouldn’t tell you everything — perhaps the numbers have shifted in other parts of the distribution — but it would be a simple way to demonstrate that the increase on financial aid spending is actually caused by lower family incomes among Williams students.
4) In fact, I can make this even easier! (It is often hard for Director of Institutional Research Chris Winters ’95 to gather data from several years ago.) We know from the 2008 letter to the Senate that, in 1997-1998, the 426th poorest US student at Williams had a family income of about $63,800. What is the family income of the 426th poorest US student at Williams today? Chris Winters can answer that question in about 30 seconds.
5) If I were a Trustee, I would ask Bill Lenhart for that number.
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9 Responses to “Spending”
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