The College Cost Dilemma, Part 3: Financial Aid

This is the third article in a series on the price of attending college, both in general and at Swarthmore. Also see the first article, an introduction, and the second, on endowment spending.

An education at a private college, particularly one at Swarthmore, is an expensive affair. Thanks to Swarthmore’s need-blind admissions policy for domestic students, many potential students are admitted each year who are simply not able to afford $45,000 in tuition for four years. Yet, through the College’s efforts and donors’ generosity, these students are still generally able to attend.

Where The Money Comes From

Around half of all Swarthmore students are on some form of need-based financial aid; for these students, the average grant is $25,296. Currently, the grant from the College fulfills on average 80 percent of students’ demonstrated need; the remainder is filled by a combination of student earnings (both during the semester and over the summer), loans, and other scholarships. The College announced in December, however, that this process will change substantially next year; no student will be asked to take on loans. Instead, the grant portion of their aid will simply be higher.

All told, financial aid grants from the College total about $18.6 million, according to Laura Talbot, Director of Financial Aid. Much of this money comes from income generated by funds restricted for this purpose in the endowment; the remainder comes from general endowment income and annual gifts. No money from tuition directly goes towards other students’ aid.

This amount is not fixed, however. The Financial Aid office reviews what students’ needs have been in the past and how they expect these needs to change this year; based on that, the office sets a spending target for the year to come. Said Talbot, “the College’s commitment to financial aid is so strong that it is one of the first items considered when the College’s budget for the next year is discussed each fall.” A reserve fund is also managed separately; when the target is too high in a given year, the remainder goes into the reserve fund, and when the target is too low, the difference comes from the fund.

Individual Aid

The average aided student this year needs $31,388 to afford tuition, according to Talbot. Of that, an average of $25,296 is a direct grant from the College, accounting for about 80 percent of need. $2,221 comes from outside scholarships, $2,295 is the average loan component, and $1,576 comes from campus earnings.

Students are expected both to work over the summer and while on campus. The standard summer earnings contribution for incoming students is $1,450 and for returning students $1,890. (The difference is because Swarthmore’s summer begins several weeks before most high schools end classes.) During the semester, the student contribution is the amount earned by 7 to 8 hours of work a week for each of the 32 weeks of the year, as it has been for at least 30 years.

(Talbot cited this figure as $1,710, although she also said $1,576 elsewhere. The reason for the discrepancy is unclear; in fact, working 7 hours a week for 32 weeks at the lowest pay scale of $7.98 would net $1,798.52, or about $1,733 after Pennsylvania 3% income tax.)

Who Gets Aid

Over the last decade, between 61 and 71 percent of each incoming class has applied for aid. The percentage of students receiving aid has ranged between 47 and 51 percent over that time period. The difference is those students whose families have been determined to be able to pay for Swarthmore themselves.

According to Talbot, these students fall into a variety of income groups; many whose families have incomes below $150,000 a year do not qualify for aid, while this year 18 percent of aided students have family incomes above $150,000. She stressed that a variety of factors affect aid situations, which are hard to summarize.

The aid office does not know much about the third of students who do not apply for aid, as it does not have their financial information. Talbot simply “hope[s] that none of those who didn’t apply might qualify.”

Over time, both the percentage of students receiving aid and the amount of financial need covered by a Swarthmore grant has increased. Some of this may come from a change in the financial makeup of the student body; Talbot said, however, that much of it comes from changes in the economy as a whole. Health care costs are increasing; more families are becoming responsible for grandparents’ medical expenses; federal aid for college has decreased.

Other Schools

Numbers are similar at Swarthmore’s peer schools. Williams, for example, gave 47 percent of its students an average of around $29,000 in grants this year. Half of Columbia students received around $30,000 — a figure which includes outside scholarships. Yale gave 44 percent of its students an average of $25,000 this year. (All three schools have net fees comparable to those of Swarthmore.)

This year, however, there have been a bevy of announcements heralding massive increases in financial aid at elite schools. Many, including Swarthmore’s, revolved around dropping loans in financial aid grants. Some schools, however, also announced large decreases in costs for the vast majority of students.

Harvard, for example, announced that “generally, the parent share of Harvard charges will not be more than 10% of family gross income when assets are typical for that income.” (Students are still expected to contribute earnings from work both during the year and over the summer.) Stanford elected to require no tuition from students whose families make less than $100,000 a year, and no housing fees from students whose families make less than $60,000. Columbia announced last week changes similar to those at Stanford.

According to Talbot, though, these increases in aid are not as much as they seem to be. She said that 81% of Swarthmore aided students from families with incomes less than $100,000 already receive aid in excess of tuition charges. (It is unclear how many students with incomes less than $100,000 do not receive any aid at all.)

One significant difference, however, is that Swarthmore expects all aided students to work over the summer and during the school year. Although most schools have similar requirements, part of Columbia’s recent announcement was that “all aid recipients will be invited to apply for exemptions from summer and academic-year work expectations when they engage in community service or accept unpaid research or internship commitments.”

The Effect on Admissions

Total cost is necessarily a major factor in many students’ decisions on where they will attend. According to Talbot, “students should attend their first choice schools.” The College’s aid “is intended to allow admitted students access to Swarthmore…not to woo them away from their first choice school if it is not Swarthmore.”

Sometimes students choose to attend schools that are less expensive than Swarthmore, either because their prices are lower or because they receive merit-based aid. Students very rarely choose to attend another school because that school’s need-based aid was more generous than Swarthmore’s; according to Talbot, that happens around once a year, based on surveys of admitted students. Dean of Admissions Jim Bock agreed.

For international students, however, the situation can be different. Swarthmore chooses to admit only so many internationals as can be funded with 10 percent of all scholarship funds. Some other schools, on the other hand, admit more foreign nationals yet offer them far less aid. Carlo Felizardo ‘11, a Filipino citizen, received a much better aid package at Swarthmore than at the other schools he was considering. He said that “My financial aid package at Swarthmore was definitely one of the major factors in my decision to attend.”

This series on cost will continue later in the week with a look at how satisfied students are with their aid.


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