Finaid issue again

More Students Line Up at Financial Aid Office
NYT, Mar 10, 03

ppealing to the financial aid office is an annual ritual for Christy Kull, a senior at Virginia Polytechnic Institute and State University. Tell all and plead desperately has always been her motto and, somehow, things seemed to work out fine.

So when her father lost his job as a computer engineer last June, she took a deep breath and stepped up the groveling. Her financial aid package of $5,000 did go up, by $1,000, but it was not enough. She dropped out and started working full time.

"It's not like there is a real option," said Ms. Kull, whose bill for tuition and living costs totals $15,000 a year, before financial aid. "The entire security blanket is just pulled right out from under you."

As the economic slump wears on, universities are awash in financial aid requests that dwarf those of earlier years, often from students who never thought of asking for help before and now find themselves scrambling for ways to stay in school.

Deadlines have not even passed on many campuses, yet financial aid requests have already risen by 50 percent at Skidmore College, in upstate New York, 39 percent at the University of Michigan, more than 30 percent at Bowdoin College, in Brunswick, Me., 30 percent at Willamette University in Salem, Ore., 20 percent at Occidental College, in Los Angeles, 15 percent at State University of New York at Albany and 14 percent at Barnard College, in Manhattan — all compared with last year, itself a particularly bad one.

"It's stunning," said Suzanne Guard, Barnard's financial director. "It seems that every fifth or sixth one says, `I'm scheduled to be laid off, I've been laid off, I've been out of work for a year, I'm still looking.' The difference this year is so obvious to us."

Even those who receive aid are coming back at midyear for more because their families' fortunes unexpectedly took a turn for the worse.

Such appeals have doubled at Pomona College, in Claremont, Calif., doubled at Kenyon College, in Gambier, Ohio, almost tripled at Claremont McKenna College, in Claremont, Calif., risen 20 percent at the University of California at Berkeley, and increased fivefold at Smith College, in Northampton, Mass., stretching some financial aid budgets to the breaking point.

"We can't afford to meet all of our students' needs. We try, but it's impossible," said Ellen Frishberg, director of financial aid at Johns Hopkins University, where the average aid package increased to $22,000 from $20,000 this year. "The hardest part of my job is to say no, but you have to disappoint some people."

Parents who once banked on steady six-figure incomes have lost jobs. Savings have been exhausted and once-fat stock portfolios have been flattened, leaving little to pay for college. At Amherst College, in Massachusetts, for example, appeals are more common than ever and aid packages are up to $7,000 higher than they were just last semester.

The deluge of aid requests comes at a particularly trying time, because just as families have fallen on harder times, universities have, too.

College endowments fell an average of 6 percent in 2002, the steepest drop since 1974, the National Association of College and University Business Officers says. Beyond that, 26 states cut their higher education budgets for the current fiscal year, and just as many are expected to do the same in the coming one.

"This is a bad time for everyone," said Stephen Joyce, director of financial aid at Bowdoin. "There is far more need than we can meet. Has it always been that way? Yes. But now they need more and we have less."

The confluence of factors has made for tough choices. While many universities say they have the financial wherewithal to shoulder more requests, others feel certain some students will be left wanting.

The University of Michigan, for example, expects at least 11,000 applications for aid but can offer grants to 6,000 applicants. Because the situation is unusually dire this year, the university has begun tracking the number of students who are sitting out half the year. It knows of 80. Hundreds more have managed to stay in school despite getting only one semester's worth of assistance.

"I'm not sure how they do it," said Pamela W. Fowler, Michigan's director of financial aid.

Frustration and anxiety seem to be the only certainties for college students like William D. Tressel Jr., a junior at Michigan State University. If current problems persist, Mr. Tressel says, many of his friends will work rather than attend school.

"They say you need to go to college to do well, but you spend all the money you have, plus you are going out and borrowing more money for something you won't see for a while," he said. "And graduates still aren't getting jobs. What if you are doing all of this and it will all be worthless?"

Some private colleges are willing to do whatever it takes to retain their students. At Smith College, officials plan to cut its staff to increase the financial aid budget by 17 percent, a level they view as impossible to sustain if the economic hardships persist much longer.

"That's an incredibly difficult increase, and we will have to do personnel cuts," said Carol Christ, Smith's president. "To put it in its starkest terms, Do you do layoffs to preserve financial aid? It's a trade-off."

Making matters worse, educators add, every state raised tuition and fees for public universities in 2002, some by 20 percent or more, as noted in a study this month by the National Center for Public Policy and Higher Education. Now states that had some of the smallest increases last year, like California and New York, are considering bigger jumps.

Over the last 20 years, tuition and fees at private and public universities have more than doubled, even with inflation taken into account. The average tuition at state-supported colleges is $4,081, while the average at private institutions is $18,273.

Worried that students are already hard-pressed to cover tuition, some universities are leaning on their senators and representatives to provide federal relief. With a coalition of 49 national education associations, they are urging Congress to double the federal Pell Grant, a scholarship aimed at low-income students.

Still, that may do little to help students who are seeking aid for the first time. Many of them come from families with incomes of $80,000 to $120,000 before their fortunes turned, but may still be considered too well off to qualify for some grants.

Steve Dripps, a sophomore at Georgia Institute for Technology, thought that after his father lost a job as a telecommunications engineer last March he would be able to muddle through with sizable grants from the government, his school or both. When nothing came through, he dropped his classes and started working full time, but swears he will only do so for one semester.

That was better than taking out huge undergraduate loans, he said, because he already plans to take on considerable debt for graduate school. "While I am definitely not someone who comes from a family who is impoverished, the current economy has put a strain on my family," Mr. Dripps said.

What the universities say they are seeing closely parallels national economic trends. From November through January of this year, a smaller percentage of the population worked than at any time since 1994 — it was 62.4 percent in February. Furthermore, the number of people who have been unemployed for six months or more is at the highest level in a decade, and nearly three times what it was just two years ago.

"Many of our families are feeling the second year of this downturn," said Roberta C. Johnson, associate director of financial aid at Berkeley. "Their savings are depleted, some have had to sell their homes, and in many cases we're seeing unemployment benefits, while nominal to begin with, are starting to run out."

Students who never thought about nickel-and-dime savings are now learning to adopt the same measures that more money-conscious students have long used: axing long distance calls, writing on both sides of notebook paper, and surviving on Ramen noodles and macaroni and cheese.

With economic forecasts dreary and college loans soaring, some administrators fear that students will be reluctant to choose high-priced private schools. Even worse, they say, some may forgo college in hope of making more money by working.

"We kept waiting to expect the worst last year, but this is just the beginning," said Maureen Levy, dean of financial aid at Occidental. "If this is just a one-year or short-term thing, it's fine. But if this keeps going, it's unclear what we'll be able to do."
After Years of Cash Flow, Universities Hit an Ebb
NYT, Mar 13

or the first time in 15 years, charitable contributions to universities and colleges dropped last year, according to a survey of 960 institutions that will be released today. The figures provide some of the clearest evidence to date of the effect that a shrunken stock market and weakened economy are having on philanthropy.

Educational institutions vie with churches for distinction as the nation's top beneficiaries of philanthropy, but in the year that ended June 30, 2002, donations fell 1.2 percent, to $23.9 billion, compared with $24.2 billion in the same period a year earlier, according to the survey.

Adjusted for inflation, giving to education fell 2.5 percent. "That may not seem like much, but it comes at a time when other sources of revenues like government support and income from endowments are also in decline," said Ann Kaplan, director of the survey, by the RAND Corporation Council for Aid to Education.

Ms. Kaplan said three-quarters of the institutions responding to the survey reported a decline in 2002.

Georgetown University's experience was typical. After raising $92 million, a record, in the 2001 fiscal year, fund-raising fell 15.2 percent to $78 million the next year. "We're not used to declines," said Michael Goodwin, a vice president at Georgetown.

Mr. Goodwin said some of the decline could be attributed to the 2001 terror attacks, but Georgetown, like other universities, has been finding it harder to raise the multimillion-dollar gifts that helped spur increases over the last several years.

Those gifts are not gone. On Tuesday, Old Dominion University announced that Frank Batten Sr., who created the media empire called Landmark Communications Inc., had given it $32 million, and yesterday, Harvard Business School said that Mr. Batten had given the same amount to its capital campaign.

University officials say they have heard reports that Mr. Batten plans eight more big gifts. He did not return a call to his office.

"That's the exception that proves the rule," Mr. Goodwin said. "Most of the people we're talking to who have the ability to make that kind of a gift are either not as well off as they were two or three years ago or they are uncertain about the future."

University fund-raising officials agree that winning donations is more difficult now, but some have still fared well. "We're on target here to have our eighth consecutive record year and hit the $100 million mark," said Christopher R. Reaske, vice president for development and alumni relations at Boston University.

Mr. Reaske said the university had pulled in $71.4 million as of March 7, a 39.5 percent increase over the same period last year. But Mr. Reaske said pledges of $10,000 and more were down 9.7 percent compared with last year.

The survey showed giving fell most sharply, 13.6 percent, among alumni, who have traditionally accounted for the largest part of charitable giving to higher education. While support from foundations increased 5 percent and corporate giving held steady, they could not offset the drop in giving from alumni.

Carol Weston, an author of books for teenagers, planned to celebrate her 25th reunion this year with a larger than usual gift to her alma mater, Yale University. But after doing her taxes, she changed her mind.

"It would be great if this year I could say, `You know, I'm going to give in the thousands instead of in the hundreds,' " Ms. Weston said. "But I just don't feel I can."

Development officials say it is too early to tell whether the fund-raising dip will continue.

"While we're ahead of the game now, we would adamantly stress that we'll still have to wait and see," said James Kunetka, executive vice president for communications in the office of resource development at the University of Texas at Austin. "I'm not at all ready to say this is going to be a banner year."

Cash contributions peaked three years ago, but in the first five months of this fiscal year, which began Sept. 1, $75 million came through the university's door, a 19 percent increase over the same period a year earlier.

Mr. Kunetka hesitated to call that a turnaround because he said some donors had paid pledges early, increasing gifts beyond what they might have been.

"It's hard to know at this point how much is the economy and the stock market and how much is the normal ebb and flow of fund-raising," Mr. Kunetka said.