The Ithaca Journal, February 1, 2008, Friday

Copyright 2008 The Ithaca Journal (Ithaca, NY)

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The Ithaca Journal (New York)

February 1, 2008, Friday

1 Edition

HEADLINE: CU unveils middle-class aid strategy

BYLINE: Topher Sanders

BODY:

{}Plan will lessen or eliminate debt responsibilities for neediest families

Journal Staff

ITHACA Cornell University is joining a number of other Ivy League universities in offering a new financial aid plan meant to take pressure off of students and families with lesser financial means, the school announced Thursday.

The new aid plan will roll out over two years. In the first year, the 2008-09 school year, Cornell will eliminate need-based loans for all undergraduate students from families with incomes under $60,000. The school will also cap loans annually at $3,000 for students from families with incomes between $60,000 and $120,000.

The following year, 2009-10, the program will take full effect by eliminating need-based loans for students from families with incomes up to $75,000, and capping annual loans at $3,000 for students from families with incomes between $75,000 and $120,000. That essentially means that students from families earning between $75,000 and $120,000 could graduate in four years owing no more than $12,000.

Similar programs have been announced at Harvard and Yale universities.

The goal is to provide access to higher education for deserving students regardless of their ability to pay and to help them graduate without debt-imposed constraints, Provost Biddy Martin said in a written statement.

"The challenge we and our peers face is to ensure access without undermining the funding model that has allowed higher education in the U.S. to flourish, the partnership that requires investments from state and federal government, philanthropy, universities, families and students," Martin said. "The point is not to make higher education a free good or to shift the responsibility for funding it disproportionately to universities, few of which can afford to eliminate or cap student loans and all of which are being asked to do more and more for our communities and the larger society."

Qualified students currently enrolled at the school will be able to take advantage of the plan when it goes into effect next year, said university spokesman Simeon Moss.

The university had been mulling over how to structure a financial program to help less affluent families for a year or two, Moss said.

Cornell arrived at the income cut-off figures for the aid program by considering U.S. median family income, family income distribution among Cornell parents, income distribution for a certain age group thought to be parents, and a myriad of other factors.

"And also what we can afford," Moss said. "So all of those things go into figuring those numbers."

Funding sources

Cornell will fund the initiative from its endowment, new donations and reallocations of existing funds over the next two years. Cornell's endowment sits at $5.4 billion, according to the National Association of College and University Business Officers' 2007 endowment study. Cornell's endowment increased by more than 25 percent from 2006.

U.S. Sen. Chuck Grassley, R-Iowa, has been publicly critical of wealthy universities for having high tuitions and massive endowments.

"We need to hear from the presidents and boards of these colleges as well," Grassley said in a Jan. 14 press release that praised Harvard and Yale for digging into their endowments to help less affluent families. Harvard and Yale have the nation's largest endowments at $34.6 billion and $22.5 billion, respectively.

"Parents and students have a right to expect these universities with big endowments to end the hoarding and start the helping with skyrocketing tuition costs," Grassley continued. "Colleges are tax-exempt, and tax exemption helps endowments grow. I hope we hear more good news from other colleges and universities in the days ahead."

The price of tuition at Ivy League schools doesn't have an effect on less affluent students' access to college educations across the country, said Ronald Ehrenberg, director of Cornell Higher Education Research Institute and a member of the school's board of trustees.

"In truth, what goes on at selective and private universities is not that important nationally in terms of access because the vast majority of American students are educated in public higher education," he said. "But because the students who come to our campuses get some unique advantages, the public has a right to expect selective private colleges and universities to be admitting people from all parts of the income distribution."

Because Ehrenberg is a Cornell trustee, he couldn't speak directly to the school's new financial plan, but he did say he was happy about the announcement.

In the same press release announcing the financial aid plan, Cornell announced a 4.9 percent tuition increase for undergraduate students in the university's endowed colleges and a 10.1 percent decrease in tuition for graduate school research students.

Overall, the cost of room and board, tuition and mandatory fees for undergraduate students in Cornell's endowed colleges will rise by 4.7 percent, from $46,021 to $48,194.

The cost of graduate school tuition will decrease in 2008-09 to $29,500 for students in research-degree programs affiliated with Cornell's endowed colleges, and will continue to drop by about another 30 percent over the next three years.

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