In an effort to make higher education more accessible, Columbia's President George Rupp and the presidents of 27 other leading colleges and universities reaffirmed their commitment to provide financial aid based on financial need and endorsed a comprehensive set of principles for the fair determination of a family's contribution to the cost of securing an undergraduate education. The most fundamental of these principles is that financial need should be the principal determinant of institutional aid awards.
Cornell University President Hunter Rawlings, who chaired the group, said, "The need for further education beyond high school has never been more important than it is today. Increasingly, however, there is evidence that students and their parents are confused by the substantial disparities in the reports they receive from financial aid experts at different campuses of the costs of educational expenses that families will reasonably be expected to pay. We need to restore confidence in the process of determining family contributions, and we need to do so before the American public's confidence in the financial aid system erodes further."
Rawlings reported that the presidents also agreed to the continued development of a new "Consensus Approach to Need Analysis" for use by campus financial aid officials in determining student eligibility for financial aid. All the institutions represented in the group are committed to admitting students regardless of their financial resources and to providing an aid package that permits them to attend the college of their choice.
The need for clarity in the financial aid process has been widely discussed over the past several years. The 1998 report of the Congressionally-mandated National Commission on the Cost of Higher Education wrote that "higher education has a major responsibility to make its cost and price structure much more 'transparent,' i.e., easily understood by the public and its representatives…. American families are confused and poorly informed, not only about costs and prices, but also about the entire matter of how to access higher education and its complicated system of financial aid."
Other recent media and government reports have highlighted the fact that the commitment of colleges and universities to need-based aid has seriously eroded over the last decade, threatening the financial ability of low- and some middle-income students to attend the college of their choice.
In 1994 Congress created an antitrust exemption (Section 568 of the Improving America's Schools Act) that sanctioned efforts by eligible institutions, i.e., those practicing need-blind admissions, to discuss and agree upon common principles of financial aid need-analysis. In enacting Section 568 Congress recognized the value of need-based aid and the fact that students will benefit from colleges and universities working together to develop policies that enhance access to higher education. In early 1999, the 568 Presidents' Working Group, an ad hoc group of college and university presidents, was formed under the umbrella of this federal legislation. These presidents share a belief in the primacy of need-based financial aid and a common concern about the steady erosion of public confidence in a financial aid system that aspires to be both understandable and fair. All of their institutions practice need-blind admissions. The group, formed initially under the leadership of Rawlings, who continues as its chair, and then-President Harry Payne of Williams College, limited the purview of its work to strengthening need-based aid programs. Their recommendations are designed to bring greater clarity, simplicity and fairness to the process of assessing each family's ability to pay for college.
To that end, the presidents' group recently endorsed the following financial aid principles:
- Families should contribute to educational expenses according to their ability and those with similar financial profiles should contribute similar amounts.
- To the extent they are able, parents and students have the primary responsibility to contribute to educational expenses before an institution awards financial aid.
- Institutions should evaluate both income and assets as part of the assessment of the family's ability to pay.
- The exercise of "professional judgment" by financial aid officers in assessing a family's ability to pay should recognize unique or extenuating financial circumstances in individual cases; such judgment is not the proper mechanism for systematically treating groups of students differently to advance institutional objectives.
- Each institution should inform applicants about the policies and practices it applies when measuring a family's ability to pay, carry out its policies consistently, and support the awarding of need-based aid.
An institution that allocates any financial assistance that is not based exclusively on need should inform all prospective applicants of the standards it applies in allocating that aid.
The group also endorsed further revisions to the Institutional Methodology (IM). The general principles and methods associated with the IM continue to be used in determining a family's eligibility for institutional aid above and beyond any federal aid a student may receive. These principles and methods, developed by financial aid officers and the College Board, address a number of issues not covered in the federal rules. The additional revisions as incorporated in the new "Consensus Approach" include the following key components:
- common elements of need analysis and professional judgment;
- a common calendar for the collection of data from families;
- a means of training financial aid professionals in the application of the methodology;
- an oversight group to review and modify the methodology as needed over time.
Rawlings said the group intentionally developed a new methodology without regard to the potential cost implications to institutions. In general, the presidents expect that the new methodology will reduce parent contributions in most cases and increase the amount of aid provided by the institutions. No institution will reduce the amount it currently invests in financial aid.
For the list of presidents, and their institutions, subscribing to the statement of principles, please click here.