Almost four years ago, Columbia announced broad enhancements to financial aid for students at Columbia College and the School of Engineering and Applied Science, including a no-loan policy.
But now top administrators are starting to review those enhancements, in an attempt to answer the question: Are they working?
The changes, announced in March 2008, were-far reaching. Starting with the 2008-2009 academic year, all need-based loans were converted into grants, students from families with incomes below $60,000 did not need to pay for school, and students from families with incomes between $60,000 and $100,000 saw a large decrease in the expected parental contribution.
In an interview earlier this semester, University President Lee Bollinger said it’s important to find out if the enhancements have actually made Columbia more accessible to more prospective students, as they were intended to do. He listed the no-loan policy as one of a number of things that is being reviewed.
“If those are working, great, if they’re not working for the purposes we set them up, then we should modify them,” he said. “And one should be able to do that, because those funds might be more effectively used for students, for example, in other ways.”
Dean of Student Affairs Kevin Shollenberger said in a recent interview that Bollinger has discussed assessing the financial aid enhancements in meetings with the Columbia College Board of Visitors and the Columbia College Alumni Association.
He also noted that administrators are comparing Columbia’s work-exemption program against those of peer schools.
But Shollenberger stressed that they are still just analyzing the effects of the financial aid enhancements—they haven’t started discussing whether to reverse or modify any particular policies, such as the no-loan policy.
“We haven’t gotten to that second part of the conversation,” he said.
Cause and effect
Shollenberger said that while it’s still early in the assessment, there have been signs that more prospective students are finding Columbia affordable. He noted that in 2006, “very few” students who were accepted to both Columbia and Harvard University chose Columbia, but that the number has improved for Columbia since then.
Still, Shollenberger said, it’s hard to determine whether the new financial aid policies are the cause.
“It’s hard to isolate the factors, if financial aid is the sole reason for that. There may be lots of reasons,” he said.
Experts say that no-loan policies—which have been adopted by about 70 colleges—have proven beneficial. According to Haley Chitty, a spokesperson for the National Association of Student Financial Aid Administrators, no-loan policies make students who might otherwise be deterred by a school’s high price tag more likely to apply.
If a school reverses its no-loan policy, “you can expect lower-income students to not be as likely to attend these schools,” he said.
Teachers College economics and education assistant professor Judith Scott-Clayton agreed, saying that Columbia’s no-loan policy has made the school more attractive to low-income families who might have thought that they could not afford to attend. Taking out loans isn’t the end of the world, she said, but without a no-loan policy, low-income students might be deterred by the idea of taking out loans.
“Having a policy that simply says no loans is really simple and attractive and could have a big impact on getting more low-income students to apply,” she said.
The cost of aid
In addition to determining whether the enhancements have made Columbia more affordable to more students, administrators are also analyzing another angle—whether the University can afford them.
According to University figures, financial aid spending in CC and SEAS jumped from $50.1 million in 2006-2007—the year before the first enhancements took effect—to $92.3 million in 2009-2010. Part of that increase can be chalked up to an increase in the CC and SEAS student bodies, but it still represents a 78 percent increase in per-student spending.
Dean of Financial Aid Laurie Schaffler, whose office oversees financial aid for CC and SEAS students, said that assessing the costs of financial aid is a “prudent and a wise thing to do” for all schools.
“When you have any enhancement, and especially when you have a very, very robust financial aid program, you want to look at it and make sure it’s [financially] sustainable over time,” she said.
And just months after Columbia announced its no-loan policy and the other 2008 enhancements, the economy nosedived. While Columbia’s enhancements have survived the economic downturn so far, those at some other schools have not—Dartmouth College and Williams College reversed their no-loan policies early last year.
In the wake of these reversals, the Institute for College Access and Success surveyed all 52 colleges that had previously eliminated or substantially decreased student loans. The survey found that while none of colleges foresaw major financial aid changes in the next two years, some were looking at minor changes to account for the economic downturn, such as raising summer work expectations or increasing work-study limits.
“We’ve seen a couple colleges revisit these and modify them so that they are more affordable,” Chitty said.
Many schools started the no-loan policies around 2008 while their endowments were flourishing, Chitty said, both to increase racial and economic diversity on their campuses and to better compete with other schools for students. Most of those schools have maintained no-loan policies, he said.
Shollenberger said it’s not yet clear if financial aid could be enhanced after the review, noting that the cost of further enhancements would have to be weighed carefully.
Schaffler said that she doesn’t foresee any changes to Columbia’s financial aid policies, noting that since the no-loan policy was put in place, student debt has gone down considerably. But considering the national conversation about student debt inspired by the Occupy Wall Street movement, it’s worth administrators’ time to discuss the adequacy of the University’s financial aid, she added.
“There’s so much talk about cost and students’ debt and students not being able to find jobs to pay back their loans,” she said. “And so anytime you have a financial aid policy, you also have to look at it, you always have to ask yourself, ‘Does it work?’ ‘Did it work?’ ‘Is it affordable?’ ‘Can we sustain it?’”
Bollinger emphasized that even if financial aid policies change in the future, the University will maintain its commitment to need-blind admissions.
“There may be ways of doing it differently,” Bollinger said. “My only point is that these are policies, and policies are different from unalterable fundamental commitments of the institution.”