NYT Op-Ed Criticizes Harvard/Yale FinAid moves

The New York Times
January 22, 2008
Op-Ed Contributor
Ivy-League Letdown
By ROGER LEHECKA and ANDREW DELBANCO

LAST month, Harvard reached into its deep pockets — its endowment is $35 billion — and changed the way it calculates student financial aid. The aim, its press release says, is “to make Harvard College more affordable for families across the income spectrum.” Last week, Yale, whose $22.5 billion endowment is growing even faster than Harvard’s, followed suit. Yale’s president, Richard Levin, said he didn’t want students to have to choose “between Yale and Harvard based on cost.”
Who will benefit? Mostly the people Harvard calls “middle- and upper-middle income families,” by which it means those earning $120,000 to $180,000 each year. Yale stretches its new plan to include families earning $200,000. (The median family income in the United States is around $50,000.)
Next year, each of these institutions will add more than $20 million to what they now spend on financial aid, reducing the cost of a college year for families earning $180,000 to $18,000, from $30,000. That’s good news for students at Harvard or Yale. But it’s bad news for many hoping to attend other private four-year colleges — and for the nation in general.
The problem is that most colleges will feel compelled to follow Harvard and Yale’s lead in price-discounting. Yet few have enough money to give more aid to relatively wealthy students without taking it away from relatively poor ones.
Most colleges already tend to favor the affluent because their budgets require it. More than 90 percent of America’s private colleges have endowments less than 1 percent the size of Harvard’s. Giving an upper-middle-class applicant even a generous partial scholarship puts less strain on their budgets than giving a full scholarship to a student whose family can afford to pay nothing.
In 2004, Lawrence Summers, then Harvard’s president, pointed out that three-fourths of the students at selective colleges come from the top income quartile and only 9 percent from the bottom two quartiles combined. And as Donald Heller, a professor of education at Pennsylvania State University, has shown in a number of studies, colleges are increasingly awarding grant money in the form of so-called merit scholarships not based on financial need. More of this assistance is going to students in the top income quartile than to any other income group.
It is understandable that Harvard and Yale want to make themselves more affordable. But the way they’re going about it sets an example that is likely to make it even harder for low-income students to attend the best college for which they are qualified. Harvard’s stated motive is to stop prospective students from “voting with their feet” by choosing public universities or other private colleges. But surely this is not a very serious problem for a university that each year turns away hundreds of high school valedictorians and whose yield (the percentage of admitted applicants who enroll) is around 80 percent.
At Yale, Mr. Levin has acknowledged that another motive for the new policy is to blunt the growing pressure on wealthy universities to spend more income from their endowments. But is supporting upper-middle-class students the wisest way to dispense the additional money?
In fact, the new policy represents a step backward from the leadership that some elite colleges previously exerted. During the Summers presidency, Harvard focused on the problems of needy students by combining increased financial aid and recruitment in low-income areas, raising its percentage of students eligible for federal Pell grants to 11.9 percent in 2006, from 9.4 percent in 2004. Harvard demonstrated to other colleges that there is undiscovered talent in the two bottom income quartiles.
In a society that claims to believe in equal opportunity, our top universities should lead by example. The scandalous fact is that between 2004 and 2006 — an era of enormous private wealth accumulation — 27 of the 30 top-ranked American universities and 26 of the top 30 liberal arts colleges saw a decline in the percentage of low-income (Pell-grant-eligible) students. The problem Mr. Summers described is only growing worse. While some upper-middle-class families have to sacrifice in order to pay for college and may deserve more financial help, most of their children find a way to attend college. Low-income students earn bachelor’s degrees at less than one-third the rate of high-income students.
Only a few colleges can afford to make tuition affordable for both the poor and the affluent. For every college to become accessible to talented students regardless of income, the federal government must create enhanced grant programs, progressive tax incentives and programs that reduce the debt of graduates who spend time in public service. Otherwise, America will be the loser, no matter who wins the Harvard-Yale game.
Roger Lehecka, a former dean of students at Columbia, consults for scholarship programs for needy students. Andrew Delbanco is the director of American studies at Columbia.