Tuesday, February 09, 2010

Colleges' Responses To Budget Issues Will Effect Students

Recent news reports have noted that colleges and universities have experienced huge losses in their endowments in 2009 as a result of the stock market's plunge. The impact of those losses has led institutions to make a variety  of decisions and adjustments to compensate for the losses.

In the past week or so both Williams College in Massachusetts and Dartmouth College in New Hampshire have announced that their financial aid policies have been amended and their "No Loan" policies would be rescinded effective for the fall of 2011. Several years ago a number of select and elite colleges had announced "No Loan" awarding policies for middle income families. These policies guaranteed that students and parents would not be required to borrow for tuition and fees. Instead the colleges would ensure that the student's full need would be met by the college or university through institutional grants and scholarships. (Middle income definitions varied by college and could be any family with an AGI of $180,000 or less at one college, while another college defined it as an AGI of $80,000 or less.) With endowment losses these policies could not be maintained. It is likely that other colleges will  begin to review their "No Loan" policies and make similar decisions for Fall 2011 or 2012, as well.

Another impact of  campuses' budget woes is the Admissions Offices' increase desire  for and focus on recruiting out-of-state applicants among state colleges and universities. Out-of-state students pay higher tuition rates than in-state students and thus  those tuition dollars can offset losses from endowments. In some areas,  in-state students could  very well be shut out of their own state universities for the Fall of 2010. This trend may last for a few years until campuses recover from the Great Recession.

Faculty and staff layoffs have also increased on many campuses as a response to budget shortfalls. Students will feel these actions. The impact will result in fewer course offerings, larger classes, smaller academic programs/majors being eliminated, reduced services and potentially delays in  student service areas.

While increasing tuition and fees are also options, institutions are have been hesitant in the past year to raise them. The few colleges that did raise tuition for fall 2010 were sensitive to the impact the economy had on families and raised them only minimally.

If you are planning for college you can limit the impact of the college's budget issues. Find out what the college's financial aid policy is and if there is any possibility of changes to the policy. Also investigate the popularity of your intended major. Is it possible the college will eliminate your major? If so, you may want to change your major or attend another college. If you are currently attending college, living off campus with roommates instead of on campus can be less expensive. Transferring to a more affordable college or one where your major is successful and popular can also be an option.

1 comment:

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