This January Princeton University adopted a new financial aid program aimed at attracting lower and middle-income students that may have a significant effect on Williams and other first-tier colleges. Under the new Princeton policy, the university will replace all loans with grants for students with family incomes below $40,000, reduce loan burdens for students with family incomes between $40,000 and $57,000, and will count home equity less when determining a family’s expected contributions.
According to the Princeton trustees, these measures “will result in a substantial increase in scholarship awards for most students on financial aid, and we hope they will send a very clear message that one of Princeton’s highest priorities is to be affordable to all students and their families.”
Princeton’s change in policy is partly a result of dissatisfaction with its old system’s ability to attract an economically diverse student body.“Princeton has expressed concern about its relatively low percentage of students on aidâ€”substantially lower than Williams in recent years,” Hank Payne, President of Williams College, said.“[The new plan] provides a competitive response.”
“The Princeton plan is a well-conceived, well thought-out strategy,” Williams Director of Financial Aid Phil Wick added.“Princeton has been perceived as a very rich school with high-income students…They are trying to reposition themselves for a different class of students by changing the composition of their awards.”
Princeton’s change in policy is a departure from the “uniform methodology, “ as Wick describes it, that most schools have adhered to in determining financial aid. “We don’t know what type of domino or cascading effect this [plan] will have,” Wick said.
One effect that has already become obvious is that the Princeton policy change is causing its peer institutions to look closely at their own financial aid systems.Stanford and Yale, for example, have already responded by adopting measures similar to those at Princeton.
Williams too has taken this opportunity to re-evaluate its allocation of financial aid. “We are in a competitive environment,” Payne said, “and so we pay close attention to what others are doing.”
By way of response, Williams went through a “fairly intense review of our policies,” Wick explained.But for now, at least, Williams is not making any drastic changes.“Based on our modeling,” Director of Admissions Tom Parker said, “it seemed wise not to act rashly.”
Driving the policy review were several considerations.
These considerations included the direct effect the Princeton plan will have on Williams admissions, the cost of adopting a similar proposal, and most of all, the underlying fairness of our financial aid policy as it stands.
Williams officials claim that the current Williams policy is actually very competitive with the new Princeton plan.They cite the fact that Williams has a strong recent record of attracting low-income students.“We have been more successful than [Princeton] in recent years in recruiting students on financial aid,” Payne said, “and so, we feel in a strong position.” Based on models created by the admissions department, had the Princeton plan been in effect last year, it would have only affected the decisions of five or six admitted students.
The main reason for this, according to Payne, Wick, and others, is that Williams policies are quite generous as they are.“The financial aid program at Williams is exceeding its goals,” a financial aid background report claimed.
One competitive aspect of Williams’s policy is its flexibility. When deciding how much aid to give a family, Williams officials first look at formulas provided by the College Scholarship Service, an independent institution connected with the College Board that helps colleges evaluate the financial need of their applicants. But the officials’ “own professional judgment…leads them frequently to lower the family contribution,” the background report noted.“We treat each individual case as an individual case,” Wick said. “We don’t just take it out of the computer.”
Williams has also made a few minor changes to its policy that will result in slightly reduced loan burdens. The first is that Williams will now allow students to use outside scholarships to reduce their loan aid as opposed to grant aid. Second, the college will alter its financial aid formulas to avoid capturing any of the Hope and Lifetime Learning tax credits recently enacted in Washington.
A key difference between Williams policy and the new Princeton plan is the differentiation it makes among students with different income levels.“At Williams we do not radically differentiate among students in terms of the loan obligations we build into financial aid packages,” Payne said.“Princeton has built in substantial distinctions.Some of their students will emerge with lower loan obligations than they would have at Williams, but other will emerge substantially higher.”
Despite these claims, several Williams students have expressed concern that the college is not doing enough to attract low-income students, and that a Princeton-type plan might be a significant asset to the school.
They refuse to dismiss the fact that many Princeton students, especially low-income ones, will in fact be emerging with lower loan burdens than their Williams counterparts.
“If the Princeton plan had been in place four years ago and I had taken advantage of it,” Tess Gadwa ‘98 said, “it would have completely affected the trajectory of my life.” She explained, “[The reduction of loan burdens] allows graduates to travel, do volunteer work. Lots of people are taking high-paying consulting and I[nvestment]-banking jobs in order to repay loans, not because they are interested in the field.”
According to Gadwa, a Princeton-type plan would “affect the type of students who come here…it would provide real diversity, as opposed to superficial diversity.”
Adopting such a plan would cost the school a significant amount of money, probably around two million dollars over four years, according to official estimates.Gadwa conceded that this is “a lot of money, but not outside the normal realm of the college operating budget.”She pointed out, also, that Williams has spent a great deal of money on other projects she sees as less crucial to the colleges well-being, such as “renovating squash courts, not to mention the Science Quad, installing slate floors and mood lighting in Mission Park, fireworks displays for Winter Carnival, and free laundry and dry cleaning during the lice epidemic.”
“If we could deal with [those], we can meet this challenge,” Gadwa said.“I believe that our number one priority at Williams College should be the students.”
Officials respond that the cost issue not insignificant.“The college is committed to trying to bringing in the best class it can. But it is also committed to trying to maintain its policies of need-blind admissions, need-based aid, and fully meeting the demonstrated need of all students,” Wick said. “If you move toward more and more financial aid, the question becomes, can you do both? Lots of aid and need-blind admissions?”
Provost Stuart Crampton agreed that the threat to need-blind admissions is a real possibility. If many schools react drastically to the Princeton plan, it could “drive the overall financial aid system into chaos that could lead to merit bidding, that could in turn lead to the end of need-blind admissions.”
But the major reason they have chosen not to adopt a Princeton-type polic
y, officials claim, is that Williams is basically satisfied with its current plan. “We think we are in a strong and generous position,” Payne said.
Wick agreed, “What the college want to do is use formulas that are fair. If we think the current formulas are fair, why should the college spend additional funds unnecessarily?”
Nonetheless, Williams will continue to keep a close eye on the effects of the Princeton plan, which may become more clear after the information from the current batch of acceptances becomes available.
“We’re going to have to monitor this … and look at our accepted student questionnaires carefully,” Parker said.
After its policy review, and with its minor changes, claims the background report, “Williams can claim with even greater confidence that its financial aid program makes the college affordable for families of any income. It will continue, however, to review matters to ensure affordability, fairness, and the institution’s ability to compete for the most promising students.”