Investigating the inner workings of the College’s financial aid program

In nearly every brochure promoting Williams College, the College touts its financial aid program, stating that they meet “100 percent of demonstrated financial need.” But what exactly does “demonstrated financial need” mean? With the average cost of higher education on the rise, the way students pay for college is a national concern.

In many ways, the College alleviates those concerns. This year, 50 percent of the student body is on financial aid. Although the comprehensive tuition fee for the 2014-15 academic year is $61,070, the average financial aid award is about $47,500, or 78 percent of tuition charges. The book grant is a generous program unique to the College that pays for textbooks for students on financial aid.

“Economic diversity is the single most important commitment that the College has to the student body,” President Falk said in an interview. “It’s essential to maintaining the relevance of Williams to the world we live in. We’ve never made a higher investment in the history of the College in that financial aid program than we have this year.”

However, many students have expressed concern about their families’ ability to pay tuition, even with their financial aid packages from the College. So here’s how financial aid measures up.

How Financial Aid is 

Calculated

According to President Falk, the College subsidizes even the students who pay full tuition, since the College spends “well over $90,000 each year” per student. When the cost of running the College goes up, as it does each year, tuition goes up.

Since the 1997-98 academic year, tuition has gone up from $43,527 to $61,070 (in 2014 dollars). However, the median price for financial aid students has gone down since 1997-98, from $20,518 in 1997 to $12,571 in 2012-13 (also in 2014 dollars). At its lowest, the median price for financial aid students was $8,728 in 2008-09. The median price for aid students has continued to rise each year since then.

Between 2009 and 2012, the College was a no-loan institution. However, the College reinstituted loans during the 2008 economic crisis, during which the College’s endowment fell by a factor of 40 percent. The Class of 2015 was the first class to pay loans after this no-loan period.

“If you’re on financial aid, the actual tuition number really shouldn’t matter to you,” Falk said. “What you are asked to pay for your education depends not on our posted tuition but rather on your family’s estimated ability to contribute.”

When students apply to the College, admissions are “need-blind,” meaning that the College does not take a family’s financial need into account when admitting students. However, this is not the case for international students, and the College does assess the family’s ability to pay when admitting international students. There are currently 85 international students on financial aid at the College.

The College uses two forms to assess families’ financial need. The first is the Free Application for Federal Student Aid (FAFSA), which is the most common form used by colleges and universities. The FAFSA uses tax information and information from the family to determine annual income, savings, the number of children currently attending school and other information. The amount of federal financial aid awarded depends on these factors.

The College also uses another form called the CSS Profile, a College Board product that costs $25 to send to one college and $16 to send to each additional college the student applies to. The CSS form is used to calculate how the College’s money is allocated to students. Although the CSS Profile is similar to FAFSA in many respects, it also takes into account a family’s home equity, real estate assets and small business ownership that FAFSA does not.

Paul Boyer, director of financial aid, says that financial aid packages are based on a simple calculation.

“The cost of attendance, minus the expected family contribution, equals financial need,” Boyer said. “Once we determine that, we put together a financial aid package to meet that full need.”

Students applying for financial aid are required to fill out the FAFSA and the CSS Profile each year. Financial aid packages are released to incoming first-years before they are required to commit to a school. For upperclassmen, the aid packages are typically sent out in July.

Financial aid packages generally include federal grants and grants from the College. Aid packages can also include work-study. The lowest income students at the College, about half of all students on financial aid, are completely covered by grants awarded by the College. The remaining financial aid students are required to take out federal student loans.

According to Boyer, the average federal loan debt for students in the class of 2014 who borrowed during their time at the College was about $13,000. The interest rates on these federal loans range from 4 to 5 percent. Additionally, the College caps student loan expectations at $16,000 for the total four years of a student’s education, although this does not take into account other loans that a family may apply for. The typical repayment period is 10 years.

“My view is that a $16,000 loan burden paid back over a decade or longer should not keep a student from pursuing whatever career they choose,” Falk said. “Many other institutions don’t cap loans.”

Falk added that sometimes, families disagree with the determinations made by the Office of Financial Aid.

“We try very hard to work with those families,” he said. “Families sometimes have a different view of what they can afford than we do. We evaluate families with similar income levels similarly, so that constrains the ad hoc adjustments we can make.”

There is an appeal process for families whose circumstances have changed or who feel they cannot afford the expected family contribution.

“Any family can appeal if they’re not happy with their financial aid award,” Boyer said. “Most families appeal because there’s been a significant change in their financial aid situation after they submit the application – unexpected medical expenses, for example, or if a parent retires or becomes unemployed. All of those things can be factored into a review.”

Boyer added that these appeals are successful most of the time.

“I’m very happy with our financial aid program at Williams,” he said. “I think it’s very generous, and it enables financial aid students to take advantage of most of the opportunities open to all students at Williams. Certainly financial aid students have to be a little more budget conscious, but that’s a good learning experience, too.”

Comparison to Peer Institutions

Regarding financial aid calculations, the College differs from many of its peer institutions in one significant way. Many of the College’s peer institutions, including Amherst, Swarthmore, Pomona, Princeton, Yale and Harvard, are no-loan schools. This means that they do not require any students to apply for federal loans; they cover demonstrated financial need with their own awards.

When asked why the College requires some students to borrow while other institutions don’t, Boyer said that it was likely due to how their endowments are managed and how much emphasis is placed on financial aid availability.

The College places a higher value on home equity than a few other schools. Harvard, Princeton and Bard, for example, do not consider home equity at all in their consideration of a family’s financial need.

The CSS Profile calculates the expected parent contribution by including home equity and other assets, savings, investments, other real estate and business equity, by asking parents to contribute approximately 5 percent of their total net worth each year. The College does modify the home equity calculation in some instances to reduce it to 1.2 times the parent’s total income, thereby reducing the parental contribution. This is done in cases where annual family income is less than home equity. For example, if a family has a home valued at $300,000, and an income of $150,000, the College multiplies their total annual income by 1.2, which comes out to $180,000. 5 percent of $180,000 is $9000 –  less than the original $15,000. Many of our peer institutions, including Amherst, Haverford, Middlebury and Vassar, also use this same calculation.

Student Experiences

One of the programs that promotes economic diversity at the College is the College’s relationship with QuestBridge, an organization that helps match low-income students with colleges and universities. QuestBridge scholars who are “matches” have their tuition for all four years paid for by the college. There are usually around 10 or fewer matches in each class year.

Alejandra Moran-Olivas ’17 is one such match scholar. “If you’re a match scholar, you have a full ride for all four years, regardless of any changing financial need,” she said. “For people that are not matches, it just depends on their financial need.”

Jonathon Burne ’17 is another match scholar. He served as liason between QuestBridge and the College last year.

“The difference between a match scholar and a non-match scholar isn’t drastically different, except that the match family has to have an estimated family contribution of zero,” Burne said. “If a family can contribute even 400 dollars, they’re automatically disqualified from match. So most Quest Scholars aren’t in the situation where they will need to take out loans.”

Moran-Olivas said that her experience with financial aid at the College has been extremely positive. The only contribution she is required to make is the $1000 required of Quest scholars each summer.

“I’ve been fortunate enough to find jobs during the summer,” she said. “I try to earn as much money as possible to pay the contribution. So far, I’ve only been at home while I work, so my mom can still support me while I work.”

Burne also said that his experience with financial aid had been positive, but added that the College might do more to clarify the process for low-income students.

“The financial aid process is somewhat ambiguous,” he said. “Most of us have never had to deal with these kinds of bills, or huge amounts of money. It’s complex and not very easy to understand. Maybe they could do more work to present it in a more accessible way.”

In the experience of Lily An ’15, the Office of Financial Aid has not been very generous.

“When I got in, I got into both Amherst and Williams,” An said. “Amherst gave me more financial aid. Williams gave me less, but also gave me the book grant. I went to previews for both schools. When I was at Williams, my mom came with me and went to the financial aid office and asked them to match Amherst’s offer. They took a look at my numbers and discovered that they had given me ‘too much,’ and took away both the money and the book grant.”

Because An didn’t like Amherst as much, she decided to attend the College.

“My parents had to take out a second mortgage on their home because they don’t want me to graduate with debt,” she said. “I am really lucky in that sense. But they were getting close to paying off their first mortgage. You don’t want to send your kid to a school they don’t like, but they shouldn’t have to pay that much money.”

An said she felt that the College was squeezing out the middle class with their financial aid policies.

“I have such a negative impression of them,” she said. “Williams says they want students who are diverse, but I guess I’m not socioeconomically diverse enough for them. But you’re not supposed to complain, because if you’re not on financial aid then it must mean that your family can afford it.”

Ashley Graves ’15 also said that her experience with financial aid had not been a positive one.

“The people who work in financial aid are nice and relatively helpful, but they can’t do anything about the financial obligations the College expects from its students,” she said.

Graves has had to take out additional loans beyond the College’s maximum $16,000.

“Every year since freshman year, I’ve taken out the maximum amount of loans,” she said. “It will be $26,500 by the time I graduate, plus the computer loan, which is an extra $2000.”

Graves says she has to work three jobs to get by – as well as to help support her family.

“I came into sophomore year working three jobs,” she said. “I constantly felt like I had to be earning money to support myself. The other thing is that I’m an athlete, and sports aren’t cheap.  If I need sneakers, competition shoes, doctor’s visits, proper gear and proper things to maintain my health – that’s ridiculously expensive. I felt like I was always working. Everything just broke down. My friendships suffered, my grades suffered, my relationships suffered, but God forbid I miss a day of work. I was always on time for work.”

Graves added that the burden on her family has been enormous.

“I’m just trying to figure out where the money is going,” she said. “I feel like as one of two teenagers from a single parent household, I should be getting more aid. It’s a burden on me and it’s a burden on my family.”