Colleges see increased demand for financial aid
Faced with substantial budget cuts and falling endowments, colleges and universities around the country are scrambling to find the funds to accommodate the growing need for financial aid from college students and their families.
According to a recent survey by The National Association for College Admissions Counseling (NACAC), 90 percent of colleges had seen an increase in applications for financial aid, and 74 percent said more of their students were receiving federal grant aid.
Within the Five College system, the University of Massachusetts, Smith College, Amherst College, Mount Holyoke College and Hampshire College, commitment to meeting the increased demand for financial aid has forced the schools to cut costs or find new sources of revenue.
This fall, UMass increased its need-based financial aid to students through a new grant called the Family Grant Program, said Executive Director of News and Media Relations, Ed Blaguszewski.
“This was done originally to help mitigate the larger fee increase but is still in place. For families with incomes up to $90,000, the student is awarded grant aid equal to tuition plus fees, now minus rebates,” Blaguszewski said.
Last year, the university provided $198 million in federal state, corporate and institutionally financed aid to about 20,000 undergraduate and graduate students, according to the campus website. According to Blaguszewski, that figure is likely to increase this year.
The university is currently receiving a flood of federal funding as part of a state-wide effort to jump-start the economy. However, Chancellor Robert C. Holub warned in a message to the campus in June that the funding is only meant for this fiscal year, and long-term financing strategies were needed to eliminate UMass’ $29 million base budget deficit.
“We must also remember that covering a base budget deficit with one-time funding causes the deficit to be carried to the next fiscal year; it does not eliminate budget reductions, it simply postpones them,” Holub said.
At Mount Holyoke, the percentage of students receiving need-based financial aid shot up 10 percent from last year, said Director of Student Financial Services, Kathy Blaisdell. Even with a larger freshman class, the average amount of aid received per student has also gone up. Currently, close to 70 percent of students receive some form of need-based financial aid, according to the Mount Holyoke College website.
Blaisdell attributed the increasing demand for aid to a number of factors including a decline in personal assets and home equity, which affected students’ ability to pay for college.
“There has been concern for the incoming class, unprecedented financial concern.” said Blaisdell.
The NACAC survey found that nationwide, increasing class size was by far the most popular method used by colleges and universities for generating much needed revenue. Of the schools surveyed, 62.2 percent of public universities, and 68.7 percent of private colleges accepted more students this past spring in order to close budget gaps. This strategy can only be used to limited affect at the Five Colleges, where small campus sizes and existing housing shortages make significant expansion difficult, if not impossible.
Although Mount Holyoke increased its class size somewhat this year, Blaisdell said the college’s ability to accept more students is limited because the campus is in a residential area.
At Amherst College, demand for financial aid has also increased noticeably, leading to a three percent expansion of this year’s financial aid budget, said Amherst College Dean and Director of Financial Aid, Joe Paul Case.
Following a significant 20 percent drop in the school’s endowment, Amherst College established a temporary Advisory Budget Committee to review possible changes to the financial aid budget. Some of those proposals addressed last year’s adjustments to Amherst’s financial aid program, one of which included eliminating the requirement for students to take out loans as part of their financial aid package. The other change extended need-blind admission to international students. Both of these policies are now under review by college officials, said Case.
“A lot depends on how rapidly the college’s resources rebound,” Case said, referring to the decreased endowment. “Performance investments have improved … but it’s still an ongoing issue.”
At Smith, decreasing class sizes, higher demand for financial aid and falling endowment and budget gap has forced the college to make dramatic budget cuts to meet expenses.
In part to cover this year’s increased demand for aid, Smith will be eliminating 44 staff positions over the next two years, said Carol T. Christ in a campus-wide message.
“Increasing the financial aid offered to our students was not an easy decision. All those involved understood that increasing this budget item meant decreasing assistance in other areas,” said Director of Student Financial Services David Belanger, in an email.
With these and other cuts, Smith was able to increase the total grant aid awarded by 7.5 percent to just over $52,000,000, Belanger said.
Hampshire has also seen higher demand for financial aid, and has increased its financial aid budget by over $1 million this year, said Director of Financial Aid Kathy Methot.
“The majority of those funds come from the college’s own resources, though some students do bring in outside federal aid,” she said.
Methot said she was not in a position to provide details about how Hampshire was funding the increase; however, she did note that the increase had put a strain on the college resources.
“Senior administrators are working on a plan to cut expenses, it’s being implemented as we speak,” Methot said.
The college provides a total of $24 million in grants and scholarships to its students, while the average need-based grant is $27,700, according to the Hampshire website.
One strategy local colleges have adopted for cutting costs has been to increase collaboration and resource sharing within the Five College Consortium. In July, Smith, Mount Holyoke and Hampshire combined their campus safety programs into one public safety department. Each campus has its own dispatch and office, but officers are responsible for responding as back-up at all three campuses, said Christ.
She added that the Five College libraries are also reviewing the possibility of centralizing and consolidating common services such as materials processing and technical services.
Niina Heikkinen can be reached at email@example.com.