Generous, but Not So Generous

Three years ago, amid a flurry of announcements about major enhancements of financial aid programs at elite private colleges, Yale University wasn't shy about sharing details of its plan. The university announced that it would charge nothing to those with family incomes below $60,000, and that those with family incomes of up to $200,000 would pay only an average of 10 percent of family income a year.

The $200,000 figure was striking both because it topped Harvard University's program (which generally ended at $180,000 of income), and because to the vast majority of Americans who don't pay Ivy or similar tuitions, $200,000 doesn't sound needy.

The original Yale announcement clearly explained what the university was offering for students from families at a range of income levels, but Yale's public statement about a new round of changes this year was much more ambiguous about the ramifications for upper income recipients.

The announcement noted that Yale was increasing the income level at which it would ask nothing financially of students' families to $65,000, and the statement referred to "modest adjustments in its need analysis formula for families with over $130,000." A university spokesman declined to detail what those changes were, and Yale's director of financial aid answered only after a week. With little fanfare, Yale is now asking families in the $130,000 to $200,000 income level to contribute 15 percent of family income, not the 10 percent originally announced. That average has turned out to be about 12 percent (for those at the $130,000 and up level of income).

Stanford University, meanwhile, is asking a bit more of families at those income levels -- if they have multiple children in college. While there is no formal policy shift, university officials say that they are applying stricter formulas to this group, generally resulting in slightly smaller aid packages.

The aid expansions announced by Yale, Stanford and many other private colleges in the 2007-8 academic year came just before the sharp drop in the stock market and the values of these institutions' endowments in the fall of 2008. Ever since then, there has been speculation in aid circles about which colleges would pull back a bit on their aid pledges.

A year ago, both Dartmouth and Williams Colleges did so, ending pledges that no new admitted applicant who qualified for financial aid would have to borrow as part of his or her aid package. (In the cases of those institutions, as well as Stanford and Yale, spending on financial aid is actually going up because of increased need, and students admitted prior to aid changes are not having their packages adjusted.)

While aid officials almost uniformly want to encourage more colleges to offer more aid, many have been quietly critical of institutions like Yale, Harvard and Stanford for being as generous as they are to families with incomes as high as $200,000. Institutions without endowments nearly as large as those institutions' have found themselves pressed to fill the aid packages of students from more modest incomes, while being told by solidly middle class or upper class families that Harvard considers them suitable for aid, so other colleges should as well.

"I think Yale want too far, farther than anyone else," said one aid director at an elite college who asked not to be identified, citing a desire not to alienate a colleague.

"Most people, at most colleges, if you are at $200,000, you aren't going to get aid," said the director. "I think the rest of us know we don't have the funds to go there, so we speak honestly about what we can do."

Caesar Storlazzi, Yale's aid director, said that the university's changes should not force students to borrow, although there is a chance some may decide to do so. "Students can earn enough to cover this responsibility with an on-campus job, without having to undertake any student loans," he said, via e-mail. "Parents, as always, can make individual decisions regarding the financing of their contributions and many will use a combination of savings (past income), current income, and parent loans (future income)."

Storlazzi said that he didn't view the changes as a notable shift or one that would raise competitive issues. "Yale's landmark enhancements that took effect for the 2008-2009 academic year mean that a more generous policy is in place for everyone than existed prior to that," he said. "Our goal is that no admitted student should have to pass up a Yale education because of financial need. We are confident that our financial aid policies ensure that we meet that goal and that our policies are highly competitive with any schools'."

Karen Cooper, director of financial aid at Stanford, characterized the changes there as "technical tweaks" more than policy shifts. The changes primarily related to expecting more than half of the standard parental contribution from families with more than one child in college.

"Mainly we're looking more closely at families with more than one child in college, particularly at the upper income levels," she said via e-mail. "We felt that using 50 percent of the computed parent contribution, particularly at the higher income levels, was disproportionately advantaging some families. We're also taking a closer look at assets for those upper middle income families." She pointed to a paragraph in the university's budget book that states: "The main features of Stanford's financial aid program remain unchanged in 2010/11.... [N]ew parents at upper income levels will see increased expectations as we phase in reduced asset allowances and allowances for multiple children in college."

Cooper said it would be "fair to say that these changes have most affected families with income above $200,000, although those with income in the $130,000-$200,000 range also saw some slight impact if they have more than one family member in college."