Recession Threatens Enrollment And Budgets At Private Colleges Article

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Recession Threatens Enrollment and Budgets at Private Colleges

To woo recession-spooked families who are wary of being on the hook for tens of thousands of dollars in student loans during the worst recession since the Great Depression, private colleges and universities throughout the country are admitting more students than ever before, and in some cases, extending larger financial aid awards.

Author: Vanessa Mchooley

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Swarthmore, Villanova, Johns Hopkins, Dickinson College, and the University of Pennsylvania are among the schools that have accepted more students than in the past, while other schools, including Villanova and Temple University, have increased their financial aid budgets in an effort to boost their enrollment numbers.

With applications to many private colleges down for the 2009–10 school year as the recession leads many families to consider less-expensive public schools, two-thirds of the 371 private institutions that responded to a survey conducted by the National Association of Independent Colleges and Universities said they’re greatly concerned about preventing a decline in enrollment (“NAICU Survey Examines Economic Concerns of Private College and University Leaders,” NAICU press release, Dec. 18, 2008).

Private schools, especially those whose budgets are heavily dependent on tuition, are anxious about what a dip in enrollment will mean for their financial outlook and are calling this year one of the most unpredictable and tense years they’ve seen in decades.

In November 2008, Beloit College, a small liberal-arts school in Beloit, Wis., eliminated 40 positions because its enrollment fell short by 36 students, which led to a $1 million budget shortfall. The college has about 1,300 students and gets three-quarters of its $55 million budget from tuition.

Financial Aid and Prospect of Student Loan Debt Factoring More Heavily Into Students’ Decisions
Some elite and Ivy League universities — including Harvard, Yale, Dartmouth, and Duke — have been an exception, having seen their applications for 2009–10 shoot up, in large part attributable to their generous financial aid packages for low- and middle-income students at a time when requests for financial aid have increased substantially.

Many of these schools’ financial aid offers are meant to ensure that low-income students won’t have to turn to federal college loans or pricey private student loans to help cover their college costs.

“More students are applying for financial aid,” said William Fitzsimmons, Harvard’s dean of admissions. “It’s a significant increase, four full percentage points ahead of last year” (“Private Colleges Worry About a Dip in Enrollment,” The New York Times, Dec. 21, 2008).

Without the prospect of significant financial aid, many families are eschewing pricier private colleges for the lower tuition of in-state public universities. When his son applied to college previously, the issue of cost didn’t come up, Bill Becker of Bethesda, Md., told The Washington Post. But now that his twin daughters are applying to college, they had to be told they “no longer had the luxury of choosing any school regardless of price” (“Recession Has Silver Lining for Class of ’09,” The Washington Post, April 1, 2009).

College and Financial Aid Officials See the Effect of Lingering Recession
Robert Massa told The Philadelphia Inquirer that this is the “toughest year” he’s seen in his 35 years of higher education. The vice president of enrollment and college relations at Dickinson College, a small liberal-arts college in Carlisle, Pa., says it doesn’t help that “the price [of a private education] has never been higher and the economy’s never been worse.”

With the stagnated economy showing little signs of recovery, families are shopping around for the school offering the most financial aid in grants and scholarships with minimal student loans.

“Students are shopping around — no doubt about it,” said Philip Day, president of the National Association of Student Financial Aid Administrators.

Compounding the funding shortage that private schools are potentially facing, said Gail Sweezey, director of admissions at Gettysburg College in Pennsylvania, is increased media coverage about an alleged shortage of financial aid and student loans.

“It’s become almost viral that there’s no loans, that schools are having problems,” she told The New York Times. “The truth is that a lot of private colleges have more financial aid available this year, but there’s lots of misinformation out there. And my guidance counselor friends tell me students may be applying to fewer places and turning to their state university, which will be at capacity.”

Even if a private college may not have the budget this year to offer tuition waivers in the form of scholarships or grants, families can still qualify for federal financial aid from the U.S. Department of Education. Federal Pell grants and low-interest Perkins loans are awarded to eligible low-income students, and other low-cost federal college loans —Stafford student loans and PLUS loans for parents — are available to eligible families regardless of financial need.

About Author

Jeff Mictabor, National Association of Independent Colleges and Universities 2008 survey of schools’ economic concerns, private student loans, federal student aid.

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Recession Threatens Enrollment and Budgets at Private Colleges