Friday, March 12, 2010

Financial Aid - Part II

Well, once again, I am posting a little later than I expected, but we continue to be overwhelmed with making decisions on our applicant pool.  To date, we have 12,085 applications - more than 1,000 more than last year!   We have mailed our merit scholarships to the Early Action students, and have started to mail our regular decision admits and merit awards.  This process will continue until next week (the week of March 15th) and then we will be mailing our deny and wait list letters.  Hang in there if you haven't heard yet, we are working as fast as we can to complete our decisions.

I hope everyone completed the Free Application for Federal Student Aid (FAFSA) by March 2, our priority deadline.  As I mentioned in the last posting, this is the tool that determines your financial aid eligibility.  Once admission notices go out, colleges begin using this information to put together a financial aid package and let you know what type - and how much - assistance is available.  That's the subject of today's post - how colleges plan for helping families with the cost of attendance and what you should consider as you get these awards.

There has been a lot written about how the national economic situation affected colleges and universities last year.  In fact, it was right about this time last year that the worst of the economic crisis was taking hold.  In order to enroll our classes, many schools offered additional financial aid to help families and in addition, many more families were applying for and qualifying for need based aid (based on the FAFSA).  For many colleges, additional aid was spent not only on the new entering students, but on returning students as well.  The economic downturn affected everyone, and we remain committed to our current students in helping them stay enrolled.  On top of all that, colleges were seeing their own investments - in endowments - decline tremendously and many rely on those investments for financial aid and other operational expenses.

The result of all that was many colleges far exceeding their anticipated financial aid expenditures.  It is important to remember that when a school makes a financial aid offer, it is making a four year offer, as long as the family's income remains fairly constant.  When we plan our budget here at USD, we make it for four years, so having a large overage in aid means carrying that throughout the four years a student is with us.

Some schools made out better than others and at USD, while we did experience a large financial aid deficit, we were able to overcome it through careful planning, cost cutting measures (not in student services) and a steady overall enrollment.  As we begin to award for the new cycle, we - and most other colleges - do so against the backdrop of this recent history.

There's an interesting history of financial aid in this country (interesting may not be the word you would choose).  Public and private schools have approached the topic differently at times, but there is no question that financial assistance has become one of the single largest expenditures that colleges have.  There was a time when financial aid was mostly need based - that is, aid was available for families who did not have the resources to afford a college education. There was an underlying assumption that going to college was not only a private benefit but a public good.  An educated workforce was better for the country and provided more job opportunities, upward mobility, etc.  Going to college benefitted everyone.

By the early 1980's, the idea of merit aid - scholarships and programs that recognized academic performance and potential regardless of financial need - became more and more popular.  Schools used these merit awards to offer a discount on their published tuition in order to lure the best students.  This quickly became an expectation in the marketplace for high achieving students and was fueled by the rankings of colleges based in large part by the academic measures of GPA and test scores of the entering class.  More aid was put into merit often resulting in less aid being available for need.

This - and many other factors - led to a shift from higher education seen as a public good to a private benefit.  There was less and less public support for state and federal aid and the result has been higher tuition, more discounting based on merit, and an "arms race" of sorts among the more selective institutions (public and private).  All of this brings us to today, with you wondering how you and your family are going to afford the acceptances that are arriving in the mail.

At the University of San Diego, we have offered a balance of merit aid and need based aid for many years.  Trying to keep those in balance has been difficult.  Here in California, with such a world class public education system, we compete for the best students with a system that costs much less.  In addition, there are some of the finest private colleges in the world in our state and we are proud to say that we compete with all of them for students too.  So we try to not only set our financial aid budget with an eye toward helping families, but toward being competitive in the market place, and we do that by looking at our cost and the value of our education. 

First, as I have talked about earlier, there is a lot of demand for a USD education.  We have room for about 1140 new freshman and we have over 12,000 applications.  Our cost of tuition is in line with the other private schools that our students look at and we have kept our tuition increases moderate, in fact tuition for the 2010 school year will increase by only 3%.  At the same time, we direct more and more of our budget toward both need based and merit based aid.

It is important to state that we also feel that the primary source of funding a student's education should rest with the family.  Our aid program is meant to complement that funding.  First, we do offer merit scholarships to about the top 35% of the entering class.  There are varying amounts of merit scholarships and we try to look at factors such as the quality of coursework a student has taken, and of course, how well they have done.  On top of that, we expect to spend over $7 million in need based aid on the entering class.  For those families that qualify, there may also be federal and state money that is available. 

In looking at your financial aid award, we encourage you to think about a couple of things.  First, consider this as an investment, which it is.  The education a student will receive, the experiences they will have, the preparation for their career they will get are part of that investment.  Being able to graduate in four years, working with professors every day in the classroom, tapping into an alumni network are factors that you should consider as you think of your options.  You also need to look at the realities of borrowing - the student and the parent.  Students at USD borrow, on average, less than the cost of one year's tuition over their four years here. 

By all means, compare the financial aid awards you recieve and consider the above factors as you weigh your options.  Of course, in the end, each family has to make the choice that is in their best interests.  But please do consider the investment and think about what adds value to the schools you are looking at.   Over the next few weeks, you will be getting lots of mail from us, focusing on the value of a USD education.  There will be emails, phone calls, and events on campus as well.  By May 1, we hope it will be clear, to at least 1140 of you, that the value of the experience your son or daughter will have here is well worth the investment.

Till next time,

Peace and good luck.

1 comment:

Katie said...

I was recently accepted to USD (Yay!!) and I cannot tell you what a great blog this is! The insight that you give for your admissions and financial aid process is invaluable and definitely makes me appreciate and understand what a personal and monumental process it is. There's so much that goes into it that, as an applicant, you don't even consider or think about!

Keep up the great posts!