Middle class takes first-class college aid

Middle-child syndrome could be seeing a cure sometime soon, at least in terms of financial aid at Ivy League colleges. Harvard University, Dartmouth College, and Yale University, among others, have implemented financial aid policies aimed specifically at the middle class income bracket.

On Jan. 16, Dartmouth announced that it will offer free tuition to students with an annual family income of less than $75,000. They will also replace loans with institutional scholarships and extend need-blind admissions to all international students.

Dartmouth’s tuition costs are comparable to those at most universities, with tuition, room, and board coming to a grand total of $45,483.

Dartmouth based its decision on data from the most recent U.S. Census, which indicated that 70 percent of U.S. households make less than $75,000 annually and that median family earning is $46,326. It also holds that 13 percent of Dartmouth students are first-generation college students and that 14 percent receive federal Pell grants, which are meant specifically for students from low-income families.

According to The New York Times, Dartmouth is trying to add $1.3 billion to endowment funds, including $150 million specifically intended for financial aid. The campaign passed the $1 billion point last month.

Harvard and Yale acted before Dartmouth in taking similar measures to facilitate financial aid for students from middle-class families.
When Harvard President Lawrence Summers announced the “Zero to Ten Percent Standard” in December 2007, he spoke in favor of not letting opportunities for talented students be dependent on financial circumstance.

“Our doors have long been open to talented students regardless of financial need,” Summers stated in a press release. “But many students simply do not know or believe this. We are determined to change both the perception and the reality.”

“This is definitely a step in the right direction,” said Michelle Pena, a junior business major. “It targets those who make too much to qualify, but don’t have enough to actually pay.”
Harvard provides free tuition for those who make under $60,000. Families with incomes between $120,000 and $180,000 are expected to pay 10 percent of their income and the percentages decrease from there until reaching zero at $60,000.

Yale announced a similar policy last month. The university expects families with incomes between $120,000 and $200,000 to pay 10 percent of their income. The percentages decrease until $60,000 at which, like Harvard, tuition then becomes free.

As of yet, Carnegie Mellon has not made any changes in its financial aid policies.

Carnegie Mellon Vice President for Enrollment William Elliott stated that Carnegie Mellon is not in the financial position to make changes.

“This trend is only among the very, very wealthy,” Elliott said. “There is a magnitude of difference between our endowment and Harvard’s.”

According to university data, Carnegie Mellon had an estimated endowment of about $1.1 billion in 2007. Harvard, Yale, and Dartmouth had endowments of $29.2 billion, $20 billion, and $3.5 billion, respectively.

While Harvard, Yale, and Dartmouth developed their own policies on expected family contribution, Carnegie Mellon bases its financial aid policies on the “Federal Methodology” developed by Congress. The formula generates an Estimated Family Contribution (EFC) based on what it is deemed appropriate as a combined total of student and parent contribution.

Carnegie Mellon offers a combnation of loans, grants, and institutional scholarships in its package. It also offers a number of merit-based scholarships for each of the academic programs. International students are not considered for any aid.

Students are allowed to obtain up to $6000 in outside grants and scholarships before their institutional package is reduced.

Carnegie Mellon offers no specific policies for certain income brackets.

While adjustments by Harvard, Yale, and Dartmouth benefit prospective middle class students, the upper income bracket remains completely unaided.
“I don’t think this is unfair because these other classes have incomes that allow them to pay,” Pena said.

First-year engineering major Mana Ameri brought up the fact that within upper class families, special circumstances exist.

“A high income means nothing,” Ameri said. “For example, medical bills; more often than not a lot of families with special medical needs or any other kind of costly expense apart from college, which surprisingly enough does happen, are left facing the same amount of need of financial assistance as say, any family with an income considered as low.”

However, Pena noted that the upper-class students still have the opportunity to apply for merit-based aid.

“There’s always merit scholarships,” Pena said. “These are best for upper-class students because their incomes show that they can pay more easily and the other classes need the institutional money more.”
There are mixed opinions as to how — and when — these financial aid initiatives will affect students applying to college.

“I don’t think that this will necessarily affect the students who apply since financial aid is decided after acceptance,” Pena said.

However, Pena noted that if colleges such as Dartmouth, Harvard, and Yale get more students after these initiatives, other colleges might follow the trend.

“All of the upper-crust schools are competing for the same core of students,” Pena said. “So, if these colleges begin taking away from this group, the trend will definitely spread.”

In Carnegie Mellon’s 2006 admitted student survey, students were asked to rank Carnegie Mellon with its competitors in 29 areas.

On average, Carnegie Mellon was ranked superior in 26 of the areas. The only three areas not included in this number were competitive athletics, balance of men and women, and generous financial aid.
“Colleges such as ours that don’t have endowments like Harvard have to be conservative [in financial aid],” Elliott said.

Elliott emphasized that our university cannot be compared to an Ivy League institution.

“What we do in financial aid may be very different,” Elliott said. “It all goes back to endowments.”

For now, the trend of set financial aid policies for the middle class income bracket remains contained to Ivy League institutions.