Cornell and the Student-Aid Arms Race
Elliott Back has posted an interesting link to an online discussion forum that points out that Cornell tends to give out more loan-based aid than other top schools. While I don’t know where the exact numbers that the post refers to are coming from, the assertion is true. And as other institutions have announced plans to only offer grants to their students and phase-out family aid contributions under certain income levels – financial aid considerations are going to increasingly affect the University's competitivenessto in recruiting the top students from across the nation and the globe.
Simply put, Cornell doles out more loan-based aid than any of its peer institutions; in 2004 (the last year for which data is available) the average need-based loan at the eight Ivy League institutions was $3,950 and the average amount of indebtedness upon graduation was $15,716. Cornell stood at $7,958 and $22,200, respectively. The later figure is a better measure of the total payment burden incurred by students because some students take outside loans as well.
So why is Cornell seemingly so frugal in its student aid policies? A combination of institutional characteristics constrains Cornell’s ability to be generous...
First, Cornell is not nearly as rich as some of its Ivy League peers. Even though growth in Cornell’s endowment has generally kept pace with other institutions, it still has relatively less money on a per capita basis. Princeton, for instance, has close to 2.3 million dollars per undergraduate—Cornell currently hovers around 300,000 dollars per undergraduate. Furthermore compounding things, funding from New York State for the contract colleges has been stagnant since the turn of the decade. Princeton, if it wanted, could educate every one of its students free of charge. Cornell could not – it depends heavily upon tuition revenue for its yearly operating budget.
Secondly, in keeping with its commitment to educate ‘any person in any study’, Cornell tends to educate poorer students (and a lot more at that) than its perhaps more... country-club oriented... peer institutions. If one looks at the percentage of students on Federal Pell Grants (which is generally a very good indicator that a student is coming from a family with an income below the United States’s median income levels) Cornell has more than twice as many students (on a percentage basis) than Princeton. It also has a higher percentage of its student body applying for and receiving financial aid.
And this is not to mention the relative largeness of Cornell -- guaranteeing financial aid to 14,000 undergaduates is a lot more costly than for four or five thousand students a year.
Some would argue (myself included) that taking out student loans to pay for a world-class education isn’t that bad of a deal, and that it is the best investment a young person can make. The returns to such an education have never been higher—especially for students from disadvantaged backgrounds.
But the issue here is one of competitiveness and prestige, and not necessarily return on investment. All other things being held equal, a top-student from a working or middle-class family would rather graduate debt free than with a mountain of debt. And Cornell should make it an institutional commitment to ensure that it is able to attract top students from all walks of life, and not just those that can afford it.
Running a university is all about balancing competing interests – humanities versus the applied sciences, sports teams versus educational outreach, and attempting to satisfy everybody in the process. Over the past decade Cornell has made a lot of investment it is faculty by raising salaries to match other schools in its peer group, its research facilities through investments in the life and informational sciences, and its students through investments in top-notch residential facilities. But will Dave Skorton and Charlie Phlegar set aside any part of the upcoming capital campaign to recruit the students that need it most? Or will the life sciences reign free?
(NB: all of these data are coming from Yahoo Education).
