The Priorities Committee's proposal to increase University financial aid by $6 million over the next four years – and the method by which it will be awarded – would alter University practices and may change national higher-education procedure.
The annual operating budget recommendations made by Provost Jeremiah Ostriker and PriCom to President Shapiro and the Board of Trustees at last Wednesday's U-Council meeting would change the structure of the financial-aid process in three significant ways.
The plan would drastically decrease the weight placed on home equity in financial aid awards, package loans as grants to international students and may allow lower-income international students to attend the University.
Proposed increases in financial aid will not extend to current students. When asked what could placate current students who may feel slighted, Ostriker responded, "time, which heals all."
The new package will take effect for the Class of 2002 and is budgeted for the next three entering classes after them. However, the policy could apply to classes beyond that.
Next year's 3.7-percent increase in tuition will be the lowest increase in decades and will affect the checks written by current University families. Inflation has hovered below two percent in the past year and is expected to remain low, so the increase in tuition is naturally reduced.
Citing the low percentages of the classes of 2000 and 2001 who qualified for Financial Aid – 41 percent and 38 percent, respectively – PriCom aimed to fund more students. "Research indicated that this decline affected all three stages of the admission process: application, admission and acceptance," the report said.
Expensive plan
The expense of the financial-aid package to the University will be considerable. The PriCom report said at least $3.3 million would be necessary to fund the financial-aid increase over the next four years. In addition, since attracting a greater number of students from low-income families was a central goal of the aid package, PriCom accounted for the increased funding needed to support these families by performing additional calculations.
"Presumably, more people will apply and more people will say yes to us," said Justin Mulaire '98, one of four undergraduates on the 16-member PriCom. As a result, the report projects a $6 million increase in the financial-aid expenditure for the next four years.
Though a budget deficit may result from the more generous financial-aid package, the University may increase the percentage of the annual growth on its endowment that it spends on the operating budget.
Meanwhile, future undergraduates from lowerand middle-income families can expect more economic assistance, according to Ostriker.
For families whose income is less than the national median of $40,000, the University will replace the standard $4,000 loan with a University grant.
Sliding scale
Loan amounts will be reduced "on a sliding scale" for those with family incomes between $40,000 and $57,500.
"The value of the home will no longer be included for most families with incomes below $90,000 and will be reduced by one-half to one-quarter for other families eligible for financial aid," the report explained.
While the elimination and reduction of both home equity and loan requirements represent policy changes, the increase in the budget for aid to international students does not fundamentally change the University's process of funding students from abroad. It does, however, bring the University closer to a "need-blind" admissions policy for international students.
"If the (capital) campaign is as successful as we think, we will be almost there – close to need-blind for international students," Ostriker said.
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