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The Costs of Financial Aid

One of the most important parts of the capital campaign is endowing the University’s financial aid offerings. The university guarantees that it will cover all “financial need”, so by endowing scholarships for financial aid students, the University is able to free up more money for other purposes. Like hiring or retaining faculty.

This graph depicts the percentage of undergraduate tuition revenue that is “spent” on financial aid for each tuition-source at Cornell. In a sense, it’s “funny money”, because the University is just paying itself the cost of a student’s tuition. But it’s also a real financial constraint that the University has to work with. In an ideal world, all financial aid money would come from endowed sources, and no tuition dollars would have to go to covering financial aid.


What’s most striking about the graph is the recent spike in financial aid costs. This probably reflects a couple of trends, including more generous financial aid policies, as well as rising tuition rates. (In an ironic twist, as tuition rises, Cornell not only needs to spend more money on financial aid, but it also raises more money to spend on financial aid.)

Of course, the real insight into this graph is this: the rich students are helping less-well off students get an education. So if you are a Cornell student constantly frustrated with the amount of opulence and arrogance that some of your peers display, take a deep breath: they’re helping to subsidize your tuition.

Matthew Nagowski | Posted on November 03, 2006 (#)

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