Sept. 6, 2001: Nudged by rivals, Yale built its plans

Wednesday’s financial aid announcement reiterated Yale’s commitment to supporting undergraduates, but comments made by administrators during the decision making process and after its completion suggest that competitive pressures carried the day.

With the $7.5 million boost in aid, Yale finds itself on solid footing with Harvard and Princeton universities by offering more comparable financial aid packages. And by not eclipsing financial aid moves by Harvard and Princeton, Yale effectively put an end to the financial aid war — for now.

“One can’t deny that it was done partially to respond to Harvard and Princeton,” President Richard Levin said. “We need to remain competitive.”

But the modifications in financial aid policy and student wages announced Wednesday were not a sure thing just months ago.

Last winter, following Princeton’s announcement of a “no loan” financial aid policy, top Yale administrators were skeptical that additional financial aid improvements beyond those announced by Yale two years ago were immediately necessary.

Levin, Provost Alison Richard and others were highly critical of the Princeton plan because it diminished the student’s role in providing for his or her own education. If administrators had to make a change at Yale, they were not going to do it Princeton’s way.

But after Harvard followed Princeton in increasing student aid by giving students added flexibility rather than entirely eliminating loans, it became clear that Yale would have to respond.

University officials, however, refused to make a major change late in the budget planning process for the 2001-2001 fiscal year. It was deemed too difficult to muster the financial resources necessary to ante up to Harvard and Princeton, and according to some administration sources, Yale officials were reluctant to be blindly following the two rivals.

More than six months later though, Yale has emerged with a policy that closely resembles Harvard’s plan, which is already benefiting Crimson freshmen. Administrators considered pushing the financial aid envelope even further than its rivals, but the University was only willing to go so far.

“We did not want to precipitate another round of competitive adjustments,” Richard said.

The student wage increase associated with the financial aid announcement has less certain financial implications for Yale. Deputy Provost Lloyd Suttle, who was involved with crafting the new wage policy, said it is too early to tell how many students will take advantage of the higher wages and whether it will affect the number of hours they work.

Richard said the University raised wages to enable students to meet their self-help requirement. But administrators admit that they looked closely at what Harvard and Princeton were paying on average. Data showed that Yale paid significantly lower wages to its student workers.

The $7.5 million funding the financial aid initiative will eventually be centrally funded out of Yale’s operating budget. Initially, however, donor money will be used to lessen the burden on the University’s purse strings.

“We’ll still have flexibility in the budget to carry out new initiatives,” Richard said.

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