YCC report recommends more aid reform

This article has been corrected. You may view this article’s correction here.

Yale students are by and large pleased with Yale’s sweeping financial aid reforms, but more work remains to be done, the Yale College Council wrote in a report released this week.The ongoing financial crisis has created a continued need for financial aid reform at Yale, the report, which the YCC is circulating among administrators, states. The council suggests a range of policy changes, including a new way of calculating aid packages that would reduce the weight given to home equity, an increase in the annual travel award and reduction of the self-help contribution required of students.

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The report originated with a November 2008 YCC survey of 1,417 Yale students — targeted to those on financial aid — asking them to evaluate last year’s aid reforms and assess their own financial situations given the economic crisis.

“The results of this survey show that a lot of the problems that originally existed such as loans, lower incomes and middle incomes have largely been solved by the policy,” YCC President Rich Tao ’10 said. “But that there still exist other problems.”

While the economic crisis has increased student need, it may also prevent Yale from expanding its financial aid policies in the upcoming year, Director of Student Financial Services Caesar Storlazzi said.

“We always take these kinds of comments into account when planning for the future,” Storlazzi said. “But we’re in an extraordinary economic situation this year, which will probably prevent us from doing any kind of big change in the next year.”

Still, Storlazzi reaffirmed Yale’s commitment to its expanded financial aid policy — a commitment underscored in University President Richard Levin’s letter to the faculty last week. And despite the crisis, Storlazzi said, few students have asked for financial aid recalculations for this semester, although the office may see an uptick in aid applications for the upcoming 2009-’10 academic year.

Tao said the survey revealed that while Yale’s overall aid packages were in many cases sufficient, the crisis was affecting students in smaller ways. For example, students are finding themselves squeezed when it comes to finding money for travel to and from their homes and for daily expenses, areas the YCC hopes Yale can address through a reallocation of funds.

“I don’t know where you could reallocate from,” said Tao, “But I see potential places where you could reallocate to.”

For example, YCC representative Kevin Beckford ’11, a member of the committee that produced the report, said the quantitative data gathered by the survey showed a need to improve upon the $750 currently allotted to students for travel each year.

More than a third of respondents said they spend over $1,000 a year on travel. The report recommends increasing the amount of funds dedicated to student travel in order to allow students on financial aid to return home about as often as students who can afford the full tuition price.

“Students are going home more, and $750 might not be adequate for that,” Beckford said. “[Airfare] is so volatile in this current condition.”

For YCC representative and committee member Sabrina Karim ’11, the issue is a personal one. Karim, who lives in Canada, only returns home twice a year on average, she said, rather than the four times she would prefer to return.

The report also calls on Yale to reduce the amount of the student self-help contribution, both for term-time work and summer income. In the 2008-’09 academic year, freshmen on financial aid are expected to contribute at least $1,200 during the academic year, while sophomores, juniors and seniors are asked to contribute at least $2,450.

Still, Storlazzi noted that in order to afford the current term-time contribution policy, upperclassmen only need to work about seven hours per week, although some may work extra to cover personal expenses.

In the November survey, about 85 percent of the 1,417 respondents that they were at least moderately satisfied with last year’s financial aid reforms.

Comments

  • Econ

    “I don’t know where you could reallocate from,” said Tao, “But I see potential places where you could reallocate to.”

    Good start. You're halfway there.

  • /lwuh6

    Consider the following please:

    Various ways that Yale's (and other schools') financial aid policies still bite:

    1. There is no disclosure before admission that the "income protection allowance" (or similar term) is only about 125% above the poverty level. This means that Yale and other schools expect a family to live on 125% above the poverty level. No school is obligated to assume you live lavishly, but if in awarding aid they expect the family to live at 125% of the poverty level, the schools should make that known. They don't. This could obviously be important to the family's decision about where their child attends college, especially if there are younger children who will now not have the same opportunities as the older Yale undergrad because they can't afford to send Kid #1 to Yale, AND give Kids#2-4 the same opportunities Kid #1 had.

    2. More fundamentally, the schools in setting the "what we think you need to live on" allowance, should peg it to something reasonable, say 125% of median income, rather than 125% of poverty level. The schools may say they are required to do otherwise by the feds. That is baloney. It may be true with federally awarded money, but it is not true regarding the school's own money.

    4. The schools punish parents for making any retirement contributions. Say you earn $90K for the year, and make a reasonable 10% retirment contribution (as any economist would say is what should be done, right President Levin?). Yale treats the family as having $90K in money avialable to fund the Yalie's education, when $9K was set aside in a retirement account that can't be tapped without paying a punitive penalty to the IRS. No school should be required to factor lavish retirement account contributions out of the analysis, but 10-15% is hardly unreasonable. What is unreasonable is for Yale and other schools to treat the family as having all the retirement contribution available for the student's education for the year when in fact none of it is. No family should be put in the position of "Do I fund my retirment or my child's education?"

    5. Final pencil whipping the schools engage in: Every family gets assessed an "Expected Family Contribution." Assume you have two kids in college at the same time(say at different schools). You would expect that each school would get half of the ECF figure. That is not how it works--each takes 60% of the EFC, so the family pays 120% of the EFC. Thus for example if a family has one child in college and it has an EFC of $10K, it pays $10K. Assume that Family #2 also calculates out at a $10K EFC, but it has two kids in college. That family pays $6K to each school--so it pays 20% more than its "Expected" Family Contribution.

    Please bring these points up with Mr. Stolarrzi, and ask the YDN to write an article about what he tells you.

    Yale and a lot of other top schools have to their credit done a lot to improve financial aid, but all of them still pencil whip families with "gotchas" like these, and they don't disclose they are doing so. That is probably the reason they refuse to let you see how they calculated the EFC, and just tell you what the number is, and if you are lucky, they will tell you how they got there, but they won't put it in writing.

    Please consider these reforms. Most are simple fairness and disclosure.

  • Anonymous

    "Tao said the survey revealed that while Yale’s overall aid packages were in many cases sufficient, the crisis was affecting students in smaller ways. For example, students are finding themselves squeezed when it comes to finding money for travel to and from their homes and for daily expenses, areas the YCC hopes Yale can address through a reallocation of funds. "

    There is a minority of students here that could never afford things here at Yale…They should work like people with the highest financial aid do. It's not the University's responsibility to pay for personal expenses of its students.

  • yaylie

    More. More! We want moooore! Yeah, I'm sure if I dug into the details the current aid package would look more like a marketing gimmick than a real help to the middle class as per #2. But I'll pretend things are all right for now cause in case you ingrates haven't noticed, Yale gave you a big improvement in aid just a year ago and now we're in a big recession. You should probably follow my lead.