When Priorities Access and Affordability Compete:

Who Is Financial Aid For? Whom Does Financial Aid Best Serve?

Over the past few years, a major noteworthy trend I see among schools is the shift from using financial aid for access, to using it for affordability.  As tuition rises beyond income growth,  it is clear that financial aid is increasingly for everybody (or "mostbody, " if I may coin a term).  Given this reality, more and more schools are pressed to give more of their limited aid dollars to current, formerly full-paying families that the school didn't think  it would have to fund. 

With the compounded pressure brought on by the current economic crisis, this shift of aid has meant that lower-need prospective families become funding priorities in the limited budget for new students, because they'd be "less expensive" to enroll and support long term (and thereby garnering higher net tuition revenue for the school than a high-need student would bring).  As a result, aid available for high-need new students constricts because aid for low-need current students expands to an unforeseen degree.  So, in a bizarre twist of reality, the families that need financial aid the most - those for whom one would intuitively think financial aid is intended - are increasingly less likely to receive it, especially in tough economic times for school budgets.

In presentations I've delivered over the past year or two and in a chapter I wrote for the NAIS book Affordability and Demand, I illustrate the forces at play through comparing tuition change rates and income change rates over a five-year timeframe.   Consider this:  between 2000 and 2005, median kindergarten tuition rose seven times faster than the average income of families in the lowest income-earning quintile.  This tuition squeeze is more than twice as painful as the more heralded, publicly lamented "middle income squeeze" that people tend to focus on. 

The middle income-earning quintile, during the same five-year period, has seen kindergarten tuition rise about 3 times faster than their average income.  Sure, the middle income squeeze is real, but no more real than the squeeze on any other income group.  Because tuition increases have outpaced income increases to a large degree, even higher-income families are now applying and qualifying for aid in greater numbers.  Financial aid budgeting is not accounting for this group of the "newly needy," shifting limited aid dollars to low need current families, and increasingly away from high-need families that most need access to the type of education independent schools provide.

As an alumnus of the A Better Chance program from Camden, NJ, who attended Moorestown Friends with significant financial aid (through its Camden Scholars program), I find it very troubling to hear how high-need students become less and less likely to get the aid they need, especially in lower school grades.  Does this mean that students like me today are less likely to be able to attend our schools than they were 25 years ago?  That's an unfortunate, increasing possibility.  A true snapshot to consider:  at one school in the Washington, DC, area, in a recent academic year, 41 percent of its financial-aid recipients had incomes in the highest US family income quintile, while only 10 percent of its financial-aid recipients had incomes in the lowest two US family income quintiles.   More affordable for higher income families, less accessible to low income families. 

Throughout the country, organizations and agencies that exist to help low-income families access and thrive in independent schools (from Rainier Scholars in Seattle to The Independent School Alliance for Minority Affairs in Los Angeles to Early Steps in New York to The Black Student Fund in Washington, DC, and all points in between) are reporting increasing difficulty in securing the admissions and financial aid support for high-need families, as more and more schools explain that they've "run out" of financial aid dollars due to unforeseen increased spending on current families newly needing aid.  The ten $3,000 grants given to current families who didn't have the need last year means that two families needing $15,000 to gain access will be more likely to be wait-listed for aid, or perhaps even denied admission because of the lack of funding needed to make an offer that has a chance of being accepted.

This, then, is the pressure on constrained resources:  how do you best accommodate addressing need across the board, when the mission of economic diversity and access competes with the market pressures of fiscal conservatism?  How do you fund that in a time when endowment values plummet and the after-effects of the weak economy are unknown (at best) or devastating (at worst)?  Bringing these trends and dilemmas to school leaders' attention is vitally important.  The difficulty for those leaders, though, is that if a school has a forced choice, it will lean toward funding more low-need families, especially in budget-tight times, even as it agonizes over what that means philosophically, or culturally, in terms of broadened economic diversity or broadened opportunity to low-income kids.  As an industry, all schools need to plan their futures so that it doesn't become a forced choice.  Otherwise, we risk allowing the cycles to repeat themselves, particularly for schools that are never under-enrolled and aren't forced to address this dilemma.

These are indeed complex issues in complex times.  But addressing such challenges is what makes leaders leaders.  As schools continue to reach out and help the high-income families' ability to maintain affordability of the school they prefer to attend, we must not forget about the extent to which we do the same for lower-income families' ability to access the schools they need to attend, in order to improve their chances for poverty-cycle-breaking success.  Stories like the one about teens from a struggling Los Angeles public school thriving in an independent school (from an October article on the Los Angeles Times's website, (http://www.latimes.com/news/education/la-me-cochran22-2008oct22,0,5110735.story,) can be found all over the country.  Reading, remembering, and living them, though, remind us of how and why increasing aid at all levels, not just the highest ones, makes the kind of difference it does.