Officials in the Yale financial aid office are experimenting with a new — and, they hope, fairer — way of determining international students’ financial aid packages, University administrators said this week.
Because the new formula would raise the family contributions for some students, the University has not yet formally adopted the new needs-analysis formula and has no plans to do so in the immediate future, University Director of Student Financial Services Caesar Storlazzi said. But he said financial aid administrators at several universities, including Yale, have made it a goal to resolve the discrepancies that arise when international students’ need figures are calculated with the domestic-student formula.
Under the new guidelines, financial aid officers would calibrate students’ aid packages according to their home countries’ “global coefficients” — which compares foreign gross domestic products to that of the United States — in order to avoid making overly generous offers. Storlazzi said the University is hesitant to formally adopt the new formula, in part because it would make Yale appear stingier than peer institutions Harvard and Princeton.
But a problem pointed out by the financial aid office and one student interviewed is that a move to the new guidelines could penalize some international students by failing to take into account cost-of-living disparities across different regions of the same countries.
The global coefficients are meant to ensure that families do not contribute less than they can afford, Storlazzi said. He said these multipliers target the disconnect between what the domestic formula would require an international student’s family to pay — often $0 — and what the family tells Yale it is able to pay — often several thousand dollars more than the first figure.
This difference results because a family in India, for example, might need to spend much less than a family in the United States for basic household upkeep.
But when the financial aid office subtracts estimated living expenditures from the families’ reported discretionary incomes, both families are given the same allowance for living expenditures under the domestic formula.
As a result, the Indian family’s actual discretionary income is higher than the formula assumes it to be, and they can actually pay more than what they are asked to contribute under the domestic formula, Storlazzi said.
To address this problem, Yale uses families’ estimates of their yearly living expenditures to individually calculate each international student’s need on a separate spreadsheet — the “spreadsheet approach,” as Storlazzi calls it.
But since the spreadsheet approach — adopted by Yale in 2001 — relies entirely on honest reporting of expenditures, financial aid officers at Yale, Dartmouth, MIT and Amherst recently decided to devise a formula that takes international wealth disparities into account while preserving a degree of impartiality, Storlazzi said.
The officers presented the new formula at a College Board conference in October.
The global coefficient refers to the ratio of a country’s per capita GDP to U.S. per capita GDP, Storlazzi said.
The spreadsheet approach is still the office’s default analysis tool for international students, Storlazzi said, and Yale has used the global coefficient formula so far only when reviewing concerns about already-assigned aid packages brought to the attention of financial aid officers.
“For intellectual reasons, I like the idea,” Storlazzi said. “We have some things to work out. … We know this isn’t a perfect tool, but the domestic tool isn’t perfect either.”
The University is refraining from formally adopting the new formula in order to avoid unflattering financial aid comparisons with competitors such as Harvard and Princeton universities, neither of which uses it, Storlazzi said.
If Yale were to implement the new system, financial aid packages for many international students would be less generous.
Slightly fewer than 70 percent of Yale’s 443 international students — defined as students with non-U.S. citizenship — receive financial aid.
Zehra Ijaz ’10, who comes from Pakistan, said she is worried that the global coefficient approach ignores differences in the standards of living in various regions by assigning one coefficient to an entire country.
Such an approach might put some needy students at a disadvantage, she said.
Storlazzi said Ijaz’s complaint identifies one of the shortcomings of the formula, but individual financial aid officers could work around these issues.
“This is why we have human beings who act as financial aid officers,” Storlazzi said in an e-mail. “We are the keepers of the sharpened pencils and erasers (or the override key, in the electronic world) so that we can make appropriate adjustments based on our knowledge of an individual situation.”
Gemma Bloemen ’10, a native of the Netherlands, said she appreciates Yale’s willingness to look at international students’ situations individually rather than just inputting numbers into a formula and getting out an end result.
“I don’t think I would deserve to get more than I am receiving right now,” Bloemen said. “I’m really happy with the way things are.”
Yale’s financial aid deal for international students — offering to meet full need and taking a need-blind approach to admission, the same as for domestic students — is unusual among U.S. colleges, most of which restrict aid for non-U.S. and Canadian citizens, Storlazzi said.
This policy has burnished Yale’s international reputation, Ijaz said.
When she and her high school classmates were investigating U.S. university options, she said, the ones consistently called feasible were Yale, Harvard and Princeton, all of which give international students the same financial aid package as domestic students.
Before the 2001-2002 school year, Yale took need into account when assessing international student admissions applications.
There was a fixed budget allocated for financial aid for international students each year, Storlazzi said, and admission offers were made after examining students’ financial aid applications.
The global coefficient formula has been used on an experimental basis at a handful of schools, Storlazzi said.
It is more useful for schools that, unlike Yale, do not have a baseline income under which no parental contribution is expected, he said.
These schools need more precise estimates of families’ incomes at the lower end of the scale, while Yale automatically exempts families making less than $45,000 a year from a parental contribution, Storlazzi said.
The University adopted this policy, part of its low-income initiative, in 2005.