Though the percentage of the incoming freshman class that plans to apply for financial aid did not increase over last year, Yale still expects to spend $9 million more on aid next year.
Yale College’s projected financial aid budget for the 2011-’12 academic year is $117 million — up by 8.3 percent from $108 million this year — though only 71 percent of incoming freshmen indicated they intend to apply for aid, a rate unchanged from last year. College financial aid experts said the increase in Yale’s tuition alone is likely responsible for the rise in the financial aid budget, but Yale’s Director of Financial Aid Caesar Storlazzi said adjustments to parent contributions are also a factor.
“The increase is attributable to two things — changes in the financial aid formula and the change of the cost of a Yale education,” Storlazzi said.
The changes to the University’s financial aid policy, which were announced in December, are twofold. Yale has raised the yearly income level below which parents are not asked to contribute to their child’s education from $60,000 to $65,000, and families earning between $130,000 and $200,000 will now be asked to contribute 15 percent of their annual income rather than 12 percent.
But Mark Kantrowitz, publisher of two websites focused on college financial aid (FinAid.org and Fastweb.com), said he thinks Yale’s 5.8 percent increase in the term bill, which will push the bill to $52,700 next year, necessitated an increase in the financial aid budget.
“[The changes to Yale’s financial aid policy] seem to balance each other out,” he said. “The majority of the increase is probably due to the increase in tuition — you have a certain percentage of students receiving financial aid, and they’re going to need more to cover that cost.”
Kal Chany, founder and president of the college financial aid advice company Campus Consultants Inc., said he thinks the University’s changes to its financial aid policy probably were not a factor in the budget increase.
With regard to the percentage of students who applied for financial aid, Storlazzi said the number seeking aid remained constant because the admissions office actively recruits students in lower-income areas. He also pointed to continuing economic difficulties in the wake of the recession as a factor driving aid applications.
Kantrowitz and Chany both said financial aid budgets at need-blind institutions such as Yale are strongly correlated with the unemployment rate. According to the United States Bureau of Labor Statistics, unemployment has fallen by 1 percent in the past year, fluctuating between 9.8 percent and 8.8 percent since last April.
As unemployment rates rise, Chany said, universities must support students whose families were able to pay tuition when their children enrolled but can no longer do so after losing employment. Chany said this is especially true at “the most generous schools,” such as Yale, Harvard, Princeton and Stanford.
Kantrowitz said that in future years, decreasing unemployment rates and increasing tuitions will create “cross currents” in Yale’s financial aid budget. Because the effect of rising tuition generally overwhelms that of economic recovery, he said he would expect Yale to increase its student aid budget again in the future, though the rate of increase from one year to the next may slow.
Almost 3,100 families of Yale students now receive financial aid.
Correction: April 28, 2011
An earlier version of this article stated that the projected financial aid budget is $119 million, when in fact it is $117 million. As such, the increase from last year is $9 million, not $11 million – a 8.3 percent increase.