In what appears to be a major policy statement, Cornell’s provost, Biddy Martin, has an article in the Chronicle of Higher Education this week. In it, she tries to explain why Cornell will not compete with the Harvard’s and University of Pennsylvania’s of the world in offering grant aid in lieu of loans to undergraduates. It’s a fascinating read, but I don’t altogether buy it. Cornell could easily match its peer’s generosity if it wanted to – as MetaEzra has previously documented, a scheme such as Harvard’s would cost the University an additional 17 million dollars a year – a drop in the bucket for a campus that is spending hundreds of millions of dollars on residential life construction. Rather, I suspect that Biddy is trying to signal to other institutions across the country that a financial aid arms race is not in anybody’s best interest (except for students and their families, of course), and that there are better uses of money out there—like research funding or faculty salaries. She’s hoping for tacit collusion, and it’s a classic prisoner's dilemma from a university budget officer’s perspective. But with Columbia’s recent gift of 400 million dollars for student financial aid, and other universities aggressively fundraising for financial aid money, I don’t think this is an argument that Biddy is going to win. The competition for top students is only going to get fiercer, and absent any large change in funding priorities or government support for higher education, Cornell will increasingly lose bright middle-class students to its peers, diminishing the caliber of the student body and degrading the University’s good reputation. I include some key passages below. Cornell is one of the wealthiest institutions of higher education in the country, and we have increased grants and reduced loans for low-income students. We cannot, however, provide the complete substitution of grants for loans that some even wealthier institutions have begun to offer low-income and middle-income students. Cornell has the 18th-largest college endowment nationwide, but it faces its own economic challenges with the lowest per-student endowment among its Ivy League peers and a relatively high proportion of students receiving aid. ... The ideal of being open to all is a core institutional value at Cornell, set out by audacious design in 1865 and affirmed by the university's conviction in 2007 as the only right and fair course. But we cannot, at least at present, afford to emulate those few colleges and universities that have promised to meet all financial need with grant aid. Nor can most institutions of higher education. To meet the challenges all of us face will take cooperation among all the players involved in supporting higher education.Over the past couple of years, Harvard University, the University of Pennsylvania, Davidson College, and a few others have made laudable efforts to increase the economic diversity of their undergraduate student bodies by modifying their financial-aid practices. They reduced or eliminated the debt burden and parental contributions for low-income and middle-income students, using institutional resources to substitute grants for loans. Unfortunately, very few institutions can match their offers.
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