History of financial aid

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This article documents the history of financial aid at Columbia, particularly for undergraduates.

Contents

Establishment and Struggle to Maintain Need-blind Admissions

Columbia established a "need-blind" admissions policy guaranteeing to meet the full demonstrated financial need of all admitted students in 1974.[1] The costs of the program proved to be a heavy burden, thanks in part to decreases in state and federal aid throughout the 1980s, and the recessions of the early 1980s and early 1990s, resulting in repeated threats to the program, culminating in the financial aid crisis of 1992. In fact, many of Columbia's peers were forced to retrench their aid programs and abandon need-blind during the 1980s.[2] At Columbia, the University ceased to guarantee funding to the College and SEAS for need-blind and left it to them to raise the needed money to support the program, leaving the status of the program year-to-year.[3][4] As a result, the College undertook a number of phonathons to drum up financial support for the policy during the 1980s.[5]

Financial Aid Crisis of 1991-1992

In the fall of 1991, the administration undertook a review of anticipated budget shortfalls across the University.[6] Undergraduate financial aid faced a particularly acute shortfall due to continuing cuts in government support.[7] In January 1992, a University committee recommended ending need-blind admission as the solution to the budget gap.[8]The ensuing crisis led to an unprecedented level of student-faculty engagement[9], and, as is par for the course at Columbia, a controversial blockade of Low Library that included the occupation of an office.[10] Ultimately the administration was able to save the financial aid program by undertaking a number of steps, including expanding the class size of the school, increasing the expected work-study contribution from students, soliciting faculty contributions, and tapping up alumni for additional donations.[11][12]

Incidentally, of the key players in the handling and resolution of the crisis, one (the Columbia College Faculty) no longer really exists, and the other (the Committee on Admissions and Financial Aid (CAFA)) no longer has student representatives.

Financial Aid Arms Race of 2005-2008

Between the Dot-com bust and the Great Recession, the largest and wealthiest universities experienced eye-wateringly rapid endowment growth. The return on endowment investments became so conspicuous as to result in calls from Congress to universities to start spending the money or face a tax. In response, between 2005 and 2008, universities took turns one-upping each other in an arms race of financial aid reforms targeted at alleviating the financial burden of attendance on low-to-middle income families. These reforms typically came in three forms, first, replacing student loans with grant money in financial aid awards, second, eliminating the expected family contribution for households with incomes below a certain threshold, with a sliding scale reduction in expected contributions for families earning above the elimination threshold, and third, revising the formulas used to calculate the ability of families to pay. While the majority of these reforms occurred between 2005 and 2008, Princeton actually pioneered the elimination of student loans in 2001.

  • January 2001: Princeton announces that beginning in the next fall, no undergraduate student would be required to take out a loan as part of their financial aid package, and that the loans would be replaced with grants.[13]
  • March 2005: Yale announces that families earning under $45k will not be required to pay towards their childrens' educations, and those making up to $60k would see steeply reduced contribution requirements.
  • March 2006: Stanford announces a program that matches Yale's.
  • March 2006: Penn announces that it will replace student loans with grants for students whose parents earn under $50,000.
  • April 2006: Harvard, because it's Harvard, announces that parents who earn less than 60k a year are off the hook for their childrens' education, one-upping Yale and Stanford.
  • Spring 2006: Financial Aid "Reform" is a major issue among student government types at columbia. The CCSC election, even though the candidates have no statutory authority on it, is a de-facto referendum by students on reforming financial at Columbia. There is a petition campaign for "FAiR".
  • September 2006: Columbia gets off the fence and announces that it, like Penn, will eliminate loans for students from families earning under $50k.
  • April 2007: John Kluge pledges $400 million for financial aid, the largest gift in school history. Columbia doesn't get the money until later, obviously. But they use the pledge to launch a matching contribution campaign to entice other alumni to donate for fin aid as well.
  • December 2007: Because it's a pimp, Harvard triples down, declares that in addition to its previous program, families earning up to $120k need only pay a percentage of their income on a scale sliding up to 10%, and capping contributions at 10% of income for families earning all the way up to $180k, eliminates student loans, and stops counting home equity in calculating family's ability to pay.
  • December 2007: Penn nudges up the cap on its no-loans-for-students program from families earning $50k up to $100k.
  • January 2008: Upset by being beaten to the punch this time around, Yale matches Harvard, raises the top end of its 10% cap to $200,000, eliminates student loans, and also adjusts its formula.
  • February 2008: Brown gets on board. Adopts the pay nothing if you earn under $60k plan, and eliminates student loans for students from families earning under $100k. Stanford also significantly beefs up its program.
  • March 2008: Columbia mans up, eliminating student loans for all, eliminating contributions from families earning under $60k, and reducing the expected contribution from families earning up to $100k.

Consequences

Not everyone thought the Harvard and Yale plans were a good idea. Professor Andrew Delbanco and former Dean of Students Roger Lehecka wrote an op-ed in the New York Times in January of 2008 criticizing the Harvard and Yale reforms as hand-outs to the already-wealthy.[14]

The timing of Columbia's significant commitment to financial aid expansion, followed by the onset of the Great Recession, led to immense pressure on the budgets of the College and the Faculty of Arts and Sciences. That led to the commissioning of the McKinsey Arts and Sciences Report, which, among other things, recommended rolling back the 2006 and 2008 financial aid expansions at Columbia. The reports recommendations also instigated the sudden resignation of Michelle Moody-Adams, then-Dean of Columbia College.

Financial Aid at the School of General Studies

Financial Aid for students at the School of General Studies is a hot mess. The pool of money GS has to for financial aid is substantially smaller than the pool CC and SEAS can tap. The result is that GS students don't get close to the aid package their counterparts get.

References

  1. http://spectatorarchive.library.columbia.edu/cgi-bin/columbia?a=d&d=cs19751121-01.2.2 Spec article comparing Columbia aid to peers in 1975
  2. [1]
  3. [2]; [3]; [4]; [5]
  4. [6]
  5. [7]; [8]; [9]
  6. [10]; [11]; [12]
  7. [13]; [14]; [15]; [16]
  8. [17]; [18]
  9. [19]; [20]; [21]; [22]; [23]; [24]; [25]; [26]; [27]; [28]; [29];[30]
  10. [31]; [32]; [33]; [34]
  11. [35]; [36]; [37]; [38]; [39]
  12. [40]
  13. Grants to replace loans for all students on financial aid, Princeton University News, 21 January 2001
  14. http://www.nytimes.com/2008/01/22/opinion/22lehecka.html
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