Yale redistributes financial aid

Beginning with the class of 2015, low-income families will receive more financial aid, while those on the higher end of the income spectrum will receive less.

Families that earn between $130,000 and $200,000 annually will pay a greater share of tuition than they have in the past, Director of Financial Aid Caesar Storlazzi said, with the “parent contribution” rising from an average of 12 percent of annual income to 15 percent. This change accompanies the University’s decision to waive parent contributions for families that make less than $65,000 each year — a more generous cutoff than the previous $60,000 figure announced in December.

“Looking at the total picture, there are three big factors at play here: the drop in endowment, our desire to help more folks on the lower end, and our belief that making moderate adjustments on the higher end will still enable complete economic diversity,” Storlazzi said.

Even with the new formula, Storlazzi said, Yale is ahead of many other universities which charge 17 percent of annual income for this group of families as a parent contribution. The changes to the parent contribution on the upper and lower ends of the income scale will amount to an estimated $9 million increase in the overall financial aid budget and will help preserve financial aid during a time of economic strain, he said.

Mark Kantrowitz, publisher of two websites focused on college financial aid (FinAid.org and Fastweb.com), said Yale’s decision to shift funds from wealthier students to less wealthy students is part of a greater trend in higher education. Still, he said, Yale’s changes are too small to make a major difference in the University’s financial aid program because “we’re talking a few thousand dollars.”

“It’s a tweaking of policy,” he said.

Yale joins Dartmouth and Williams colleges in reducing financial aid for wealthier families in recent years, according to FinAid.com. Dartmouth announced last February that it would reintroduce loans for students from families earning more than $75,000 who would enter the college in fall 2011. Approximately a week before Dartmouth changed its policies, Williams announced it would reintroduce loans for some students receiving financial aid in 2011-’12, though not for “low-income students.”

Despite the increase in the overall financial aid budget, two Yale students interviewed said the University must do more to make a Yale education affordable for students from all backgrounds.

Kenneth Reveiz ’12, a member of the Undergraduate Organizing Committee, said the group believes that the student contribution toward financial aid, which increased by $400 this year, creates a “two-class system” among students. The changes for the class of 2015, he said, do nothing to rectify the issue.

Though Ellen Ray ’12, another Undergraduate Organizing Committee member, said she is not concerned by the content of the new rules, she said more student input — aside from that of the Yale College Council — is needed before the University changes its financial aid policies again.

“I think it would be great if there could be more transparency when administrators deliberate,” Ray said. “A lot of the time, these changes come as orders from on high.”

Almost 3,100 families currently receive financial aid.

Comments

  • The Anti-Yale

    *Families that earn between $130,000 and $200,000 annually will pay a greater share of tuition than they have in the past*

    It would be nice if Congress had similar “tweaking” courage with fairness and the income tax.

  • zena

    I think the Anti-Yale comment is absolutely right — had the exact feelings myself.

  • zena

    I think the Anti-Yale comment is absolutely right — had the exact feelings myself.

    Yale should be highly commended for its approach and its continuing efforts to make a Yale education possible for everyone.

  • RexMottram08

    In 2008 (the latest year for which accurate data are available), the bottom 95 percent of income-earning households in the U.S. – a group that surely includes “middle-income taxpayers” – paid 41 percent of the revenue taken in by Uncle Sam from the personal income tax, while the top 5 percent of income-earning households paid 59 percent of this tax revenue. And looking only at the top 1 percent of income-earning households – surely “the wealthy” – they paid a whopping 38 percent of federal personal income tax revenue.

    In 2008, for the typical household in the top one-percent of income-earning households in America, the percent of its adjusted gross income that it paid in federal income taxes was 23.27. Middle-income households paid less. For households whose earnings put them in the top 50 percent, but below the top 25 percent, of income earners, the percent of their adjusted gross income paid in income taxes was, on average, 6.75. For households in the bottom 50 percent of income-earners, the percent of their adjusted gross income paid in income taxes was, on average, 2.59.

  • Standards

    Rex,

    Those statistics become roughly meaningless when you discover that the top 1 percent of households hold 40 % of the wealth, while the top 20% holds 85% of the wealth.

    Who cares if they pay 38 percent of the taxes when they own 40 percent of the wealth? and can afford to pay much, much more.

  • River Tam
  • SimpleSolutions

    Well, it was certainly to be expected. Tuition up, financial aid goes up on the lower end, aid goes down on the high end. Nothing that students and parents can do anything about.

  • The Anti-Yale

    Zena,

    For all my crabbing, Yale is a pretty wonderful and generous place. It was good to me and has been good to many other students. I just wish it wouldn’t sell its Faustian soul for the elixir, Science, and would deal with the last two of its big historical problems: It settled the Peruvian artifacts “century-long “loan” ( nobly and with scholarship in mind, I might add ); now settle Geronimo’s Stolen Skull and Reparations for Slave Labor (nobly and with scholarship in mind, if that’s possible).

    PK

  • yalie13

    Yale college should have no tuition.

    Budget-wise, it’s worth the investment. Each student that enrolls at Yale is an investment with returns far more rewarding and reliable than that of any other type of institution.

    There’d probably be more donations and no longer could Yale ever be labeled as a country-club for the elite. From the billionaire students to the students from inner city schools, every attendee would essentially be enrolled in a free education.

    Ideally, education should always be free, but that’s rarely ever possible or practical. Here’s one case where it’s possible, practical, and smart.

    But hey, maybe I’m a dreamer.

  • ds747

    Actually, yalie13, the possibility of eliminating tuition has been examined in this extremely thorough, though somewhat outdated, article by an ex-editor in chief of the YDN: http://www.yaledailynews.com/news/2008/oct/10/up-close-can-yale-be-tuition-free/

  • yalie13

    Great article ds747. Thanks!