COVER STORY: New financial aid is opening doors
Harvard's dramatic change
The current trend in higher education prices has prompted many institutions to rethink the kind of loan debt with which they're saddling their graduates. According to Keane, officials had been discussing a new financial aid policy for Cornell when Harvard University announced a dramatic change in its policy in December 2007.
Harvard announced that families with incomes of $60,000 or less would pay nothing for tuition, while those with incomes up to $120,000 would pay on a sliding scale that would top out at not having to spend more than 10 percent of their income on tuition, according to the Harvard Gazette Online.
Weeks later, in mid-January, Yale University announced a plan of its own: Families with incomes below $120,000 would see their contributions cut by more than 50 percent, while most families with incomes between $120,000 and $200,000 would see cost reductions of 33 percent or more. Families earning $60,000 annually would not make any contribution toward the cost of a Yale education, while families earning $60,000 to $120,000 would contribute typically 1 percent to 10 percent of their total family income, according to the Yale Office of Financial Aid.
Yet, Keane says it is worth noting that such schools as Harvard and Yale have much larger endowments than Cornell and much smaller student bodies. Cornell's endowment is $5.4 billion and has an undergraduate enrollment of 13,510, compared with Yale's endowment of about $22.5 billion and 5,275 undergraduates and Harvard's endowment of almost $35 billion and about 6,715 undergraduates.
"That's a lot more money to spend per student," Keane said.
Other schools of varying sizes and endowments that have jumped on the revised-financial-aid-plan bandwagon include Duke University, Wellesley College and the University of Pennsylvania.
On the horizon
Although it will be several years before Cornell officials can measure the impact of the new financial aid policy, Keane says that the new measures will help keep Cornell "where we need to be" in the marketplace of higher education.
"We should still be one of the top 15 choices for students," he said.
The new program will be reviewed annually to be sure it keeps pace with changes in family incomes. Already, Keane says, there is some discussion about the steep incline in loan amounts for students whose families are just above the $120,000 cutoff, compared with those in the $120,000-and-under group.
"This is certainly something we will be talking about over the next year, as we see the results of 2008-09," Keane said.