Mon, 22 Feb 2010 06:45:33 +0000

"The simple reality is that we just can't afford that anymore," said Dartmouth President Jim Yong Kim.

Between 30 and 40 schools, most of them private, replaced loans with grants or scholarships for students on financial aid in recent years. But that was when college endowments were posting record gains. Dartmouth's endowment lost 23 percent of its value last fiscal year, falling to $2.8 billion.

Over the weekend, the Dartmouth board voted to reinstate loans of $2,500 to $5,500 per academic year for financial aid recipients from families with incomes above $75,000. Students from families that earn less will continue to receive free tuition and loan-free aid packages.

The move comes a week after Williams College, a private liberal arts school in Williamstown, Mass., became the first school to announce it would rescind a no-loans policy, starting in fall 2011. Williams has said the neediest students will not be required to take out any loans, but it has not announced details.

"Our financial aid program will continue to be one of the most generous anywhere, as it should be, and we are convinced that Williams will remain financially attractive to aided students at all levels of income," interim President Bill Wagner wrote in a Jan. 31 letter.

Other elite private schools are sticking with their no-loan policies, at least for now. Among them is Amherst College, which has doubled its low-income student enrollment in recent years, in part through more transfers from community colleges and more international students.

"But we also have to remain accessible to the middle class, where we had under-representation and where there is so much talent," Amherst President Anthony Marx said. "Maintaining a no-loan policy seems to help us make Amherst more accessible to the middle class and also eliminate the constraints of debt on those students' career choices."

Amherst is asking students on financial aid to contribute more of their summer earnings to their education – a step that's anticipated at Swarthmore College and other schools.

Most private schools, however, can only dream of being as wealthy as Amherst, one of 54 colleges and universities in the U.S. with endowments of more than $1 billion.

Schools facing greater financial difficulties might engage in "leveraging" – sweetening the pot for students who can pay a larger chunk of their tuition in a bid to influence enrollments and improve their bottom lines, said Mark Kantrowitz, a financial aid expert and publisher of the FinAid and FastWeb web sites.

Lauren Asher, president of the Berkeley, Calif.-based Institute for College Access and Success voiced a similar concern.

"If you have to cut back – and that's a big if – then focusing your available resources on those who need it the most is the right way to go," she said. "However, some colleges may take this economic crisis as license to spend more on students with less need to attract students who are paying a larger share of their tuition dollars ... That's a real danger."

Few people pay the full sticker price at private schools, she said, and it's a positive development that some schools are becoming more transparent about how much students are expected to borrow.

Most private schools are in the process of setting their budgets for the next fiscal year and have yet to announce details on tuition and student aid projections. Some plan to offer more financial aid, in part because they plan to admit more students or raise tuition.

Rice University in Houston plans a modest tuition increase and an increase to need-based financial aid. Rice President David Leebron said the school remains committed to a financial aid package that includes eliminating loans for families with incomes of less than $80,000, and capping total loans for four years of college at $10,000.

"It's a challenging time," Leebron said. "For us, at least, it's so fundamental to who we are that we remain attractive to middle- and lower-income students, we don't contemplate major changes."

Other colleges are looking to hold the line on aid. Colorado College's endowment declined by 19 percent last year to $400 million, leading to staff cuts and elimination of the football program.

Colorado College President Richard Celeste said the liberal arts school in Colorado Springs plans an "extremely modest tuition increase" and a financial aid increase to match. But beyond that, the college will not expand aid except for setting aside extra money for existing students in financial straits, he said.

"What we want to count on for our students and our families is a stable outlook for financial aid," Celeste said. "Obviously, I'd very much like to increase it, but I need to have the money first."

(This version CORRECTS Corrects spelling of association spokesman to King, instead of Kinge. Moving on general news and financial services.)

From Newsweek…

Minority Report
American universities are accepting more minorities than ever. Graduating them is another matter.

By Evan Thomas and Pat Wingert | NEWSWEEK

Barry Mills, the president of Bowdoin College, was justifiably proud of Bowdoin’s efforts to recruit minority students. Since 2003 the small, elite liberal-arts school in Brunswick, Maine, has boosted the proportion of so-called underrepresented minority students (blacks, Latinos, and Native Americans, about 30 percent of the U.S. population) in entering freshman classes from 8 percent to 13 percent. “It is our responsibility, given our place in the world, to reach out and attract students to come to our kinds of places,” he told a NEWSWEEK reporter. But Bowdoin has not done quite as well when it comes to actually graduating minorities. While nine out of 10 white students routinely get their diplomas within six years, only seven out of 10 black students made it to graduation day in several recent classes.

The picture of diversity—black, white, and brown students cavorting or studying together out on the quad—is a stock shot in college catalogs. The picture on graduation day is a good deal more monochromatic. “If you look at who enters college, it now looks like America,” says Hilary Pennington, director of postsecondary programs for the Bill & Melinda Gates Foundation, which has closely studied enrollment patterns in higher education. “But if you look at who walks across the stage for a diploma, it’s still largely the white, upper-income population.”

The United States once had the highest graduation rate of any nation. Now it stands 10th. For the first time in American history, there is the risk that the rising generation will be less well educated than the previous one. The graduation rate among 25- to 34-year-olds is no better than the rate for the 55- to 64-year-olds who were going to college more than 30 years ago. Studies show that more and more poor and nonwhite students aspire to graduate from college—but their graduation rates fall far short of their dreams. The graduation rates for blacks, Latinos, and Native Americans lag far behind the graduation rates for whites and Asians. As the minority population grows in the United States, low college-graduation rates become a threat to national prosperity.

The problem is pronounced at public universities. In 2007 (the last year for which Education Trust, a nonprofit advocacy group, has comparative statistics) the University of Wisconsin-Madison—one of the top five or so “public Ivies”—graduated 81 percent of its white students within six years, but only 56 percent of its blacks. At less-selective state schools, the numbers get worse. During the same time frame, the University of Northern Iowa graduated 67 percent of its white students, but only 39 percent of its blacks. Community colleges have low graduation rates generally—but rock-bottom rates for minorities. A recent review of California community colleges found that while a third of the Asian students picked up their degrees, only 15 percent of African-Americans did so as well.

Private colleges and universities generally do better, partly because they offer smaller classes and more personal attention. But when it comes to a significant graduation gap, Bowdoin has company. Nearby Colby College logged an 18-point difference between white and black graduates in 2007 and 25 points in 2006. Middlebury College in Vermont, another topnotch school, had a 19-point gap in 2007 and a 22-point gap in 2006. The most selective private schools—Harvard, Yale, and Princeton—show almost no gap between black and white graduation rates. But that may have more to do with their ability to cherry-pick the best students. According to data gathered by Harvard Law School professor Lani Guinier, the most selective schools are more likely to choose blacks who have at least one immigrant parent from Africa or the Caribbean than black students who are descendants of American slaves. According to Guinier’s data, the latter perform less well academically.

“Higher education has been able to duck this issue for years, particularly the more selective schools, by saying the onus is on the individual student,” says Pennington of the Gates Foundation. “If they fail, it’s their fault.” Some critics blame affirmative action—students admitted with lower test scores and grades from shaky high schools often struggle at elite schools. But a bigger problem may be that poor high schools often send their students to colleges for which they are, in educators’ jargon, “undermatched”: they could get into more elite, richer schools, but instead go to community colleges and low-rated state schools that lack the resources to help them. Some schools out for profit cynically jack up tuitions and count on student loans and federal aid to foot the bill—knowing full well that the students won’t make it. “Colleges know that a lot of kids they take will end up in remedial classes, for which they’ll get no college credit and then they’ll flunk out,” says Amy Wilkins of the Education Trust. “The school gets to keep the money, but the kid leaves with loads of debt and no degree and no ability to get a better job. Colleges are not holding up their end.”

A college education is getting ever more expensive. Since 1982 tuitions have been rising at roughly twice the rate of inflation. University administrators insist that most of those hikes are matched by increased scholarship grants or loans, but the recession has slashed private endowments and cut into state spending on higher education. In 2008 the net cost of attending a four-year public university—after financial aid—equaled 28 percent of median family income, while a four-year private university cost 76 percent of median family income. More and more scholarships are based on merit, not need. Poorer students are not always the best-informed consumers. Often they wind up deeply in debt or simply unable to pay after a year or two and must drop out.

There once was a time when universities took a perverse pride in their attrition rates. Professors would begin the year by saying, “Look to the right and look to the left. One of you is not going to be here by the end of the year.” But such a Darwinian spirit is beginning to give way as at least a few colleges face up to the graduation gap. At the University of Wisconsin-Madison, the gap has been roughly halved over the last three years. The university has poured resources into peer counseling to help students from inner-city schools adjust to the rigor and faster pace of a university classroom—and also to help minority students overcome the stereotype that they are less qualified. Wisconsin has a “laserlike focus” on building up student skills in the first three months, according to vice provost Damon Williams.

State and federal governments could sharpen that focus everywhere by broadly publishing minority graduation rates. (For now students and counselors must find their way to the Web site of the Educational Trust, which compares data obtained from schools by the federal government.) For years private colleges such as Princeton and MIT have had success bringing minorities onto campus in the summer before freshman year to give them a head start on college-level courses. The newer trend is to start recruiting poor and nonwhite students as early as the seventh grade, using innovative tools like hip-hop competitions to identify kids with sophisticated verbal finesse. Such programs can be expensive, of course, but cheap compared with the millions already invested in scholarships and grants for kids who have little chance to graduate without special support.

With effort and money, the graduation gap can be closed. Washington and Lee is a small, selective school with a preppy feel in Lexington, Va. Its student body is less than 5 percent black and less than 2 percent Latino. While the school usually graduated about 90 percent of its whites, the graduation rate of its blacks and Latinos had dipped to 63 percent by 2007. “We went through a dramatic shift,” says Dawn Watkins, the vice president for student affairs. The school aggressively pushed mentoring of minorities by other students and “partnering” with parents at a special pre-enrollment session. The school had its first-ever black homecoming. Last spring the school graduated the same proportion of minorities as it did whites. If the United States wants to keep up in the global economic race, it will have to pay systematic attention to graduating minorities, not just enrolling them.