Financial Aid

Updates: Written in September 2012, this blog-post preceded a much larger conversation about merit aid. While I wish I could say this blog-post influenced the conversation, it has at least been interesting to see more attention to this issue. See:

However, not one of these articles has addressed the discrepancy between elite institutions that are effectively giving a $10,000-$20,000 tuition discount to wealthy families versus the plight of tuition-driven institutions. This should be a core issue of the debate.

Liberal Arts College Financial Aid

Liberal Arts college financial aid programs rapidly approach a crossroads: whether the small college liberal arts experience will be available for those seeking a broad education and valuing an educated citizenry, or liberal arts college financial aid policies will limit accessibility to an increasingly narrow elite.

I have lately been defending the value of undergraduate anthropology within a liberal arts context, while pondering the larger relevance of the liberal arts. In uncertain times–when careers are rapidly changing and jobs can be globalized away–the liberal arts skillset of thinking, reading, writing, analysis, working collaboratively and across boundaries, is more relevant than ever.

Yet small college liberal arts institutions encounter increasingly needy students. What financial aid officers call unmet need–the amount over and above what students are receiving in financial aid and low-interest loans–is rising to unprecedented levels. Many liberal arts college financial aid programs are unable to meet this need, prompting families to seek market-rate loans or employment that threatens the thinking and learning endeavor. Meanwhile the wealthy shop for scholarships, merit aid, or hire commission-based agents to bargain and strong-arm liberal arts college financial aid officers.

It’s a travesty to imagine that a small college liberal arts education has the same relevance for the student taking on large loans as it does for the debt-free. Debt erodes the entire educational purpose–if the liberal arts are to be part of citizenry and service, saddling students with the equivalent of a mortgage payment before they are even employed will shift priorities to the pursuit of the most lucrative jobs.

Liberal arts college financial aid programs will only have a chance of surviving the economic and political maelstrom if there is concerted effort around three principles. First, elite liberal arts colleges must begin charging full cost, ending the subsidy they provide to wealthy families. Second, tuition-funded institutions need to stop playing scholarship games with wealthy families–financial aid should be need-based. Finally, these shifts would allow liberal arts college financial aid programs to meet the unmet need, so that a broad liberal arts skillset can be relevant without acquiring large debt burdens. This shift in liberal arts college financial aid would truly prove the relevance of a liberal arts education, far more than public relations efforts.

1. Elite Liberal Arts Colleges – Charge Full Tuition Now

Some elite liberal arts college presidents have recently defended the endeavor in prominent newspapers. Michael S. Roth, president of Wesleyan University, writes Learning as Freedom in the New York Times, drawing on John Dewey’s vision of learning and the history of higher education:

Education should aim to enhance our capacities, Dewey argued, so that we are not reduced to mere tools. “The kind of vocational education in which I am interested is not one which will ‘adapt’ workers to the existing industrial regime; I am not sufficiently in love with the regime for that.” Are we?

Who wants to attend school to learn to be “human capital”? Who aspires for their children to become economic or military resources? Dewey had a different vision. Given the pace of change, it is impossible (he noted in 1897) to know what the world will be like in a couple of decades, so schools first and foremost should teach us habits of learning.

For Dewey, these habits included awareness of our interdependence; nobody is an expert on everything. He emphasized “plasticity,” an openness to being shaped by experience: “The inclination to learn from life itself and to make the conditions of life such that all will learn in the process of living is the finest product of schooling.”

[Note: Interestingly, see Ruth Benedict and the Anthropological Concept of Culture for how this anthropological best-seller was also very much influenced by John Dewey.]

Roth’s summary of Dewey protesting the reduction of people to “mere tools” and emphasis on plasticity–it sounds rather like how I wrote that Anthropology is the worst college major for being a corporate tool, best major to change your life.

Adam Falk, president of my alma mater, Williams College, writes In Defense of the Living, Breathing Professor, published in the Wall Street Journal:

What really matters is the set of deeper abilities—to write effectively, argue persuasively, solve problems creatively, adapt and learn independently–that students develop while in college and use for the rest of their lives.

At Williams College, where I work, we’ve analyzed which educational inputs best predict progress in these deeper aspects of student learning. The answer is unambiguous: By far, the factor that correlates most highly with gains in these skills is the amount of personal contact a student has with professors. Not virtual contact, but interaction with real, live human beings, whether in the classroom, or in faculty offices, or in the dining halls. Nothing else–not the details of the curriculum, not the choice of major, not the student’s GPA–predicts self-reported gains in these critical capacities nearly as well as how much time a student spent with professors.

What follows from this finding is obvious, but apparently in need of saying these days: What we do is expensive–and worth it–because these rich, human interactions can’t be replaced by any magical application of technology.

These are wonderful defenses of liberal arts approaches. From an optimistic perspective, it signals that liberal arts college presidents, who at one point may not have stooped into the fray, are now more ably making a case for the liberal arts. A more cynical take would be that the higher education woes are now knocking at the door of even the most elite institutions, prompting these media forays.

Regardless of motivation, it is good to see these presidents defending the liberal arts. However, elite institutions like Williams undermine the sector by not charging the full price for an education. For 2012-2013, a Williams education costs approximately $57,000. The institution where I teach, Hartwick College costs approximately $48,000. How is it that a school with the enormous resources of Williams is basically in the same ballpark as Hartwick?

As the Williams admissions and financial aid page indicates, that’s because although they estimate the true cost per student at $80,000, they make up for the difference through donations and endowment. Put differently, that’s nearly a 30% subsidy to the wealthy, or as tuition-driven institutions call it, an automatic 30% discount rate for the already-privileged.

Wesleyan University’s subsidy is perhaps not as extreme. But would John Dewey be happy to learn Wesleyan gives the wealthiest a $19,000 break on tuition, or approximately 27% off?

Prestigious elite liberal arts institutions must begin charging full cost. They can provide more financial aid accordingly, including families higher up the income ladder than would have been previously considered. But only by charging full cost can we actually compare the value of an education. Perhaps more than a few families would choose a tuition-based institution like Hartwick if it were a $30,000 annual difference!

It’s unethical and immoral that the elite liberal arts institutions subsidize the wealthy at a time when the small college sector battles for survival. But if appeals to ethics and morals are unlikely to succeed, charging full cost would allow such institutions to demonstrate a much larger percentage of students receiving financial aid. It might also make them more money.

The proposal that elite liberal arts colleges begin charging full tuition is echoed by what R. Scott Asen recently wrote about private preparatory schools like Groton:

To the extent that any family with the wherewithal is paying less than the full cost of the product it is buying through combined tuition payments and donations, that family is effectively being subsidized by other current and past donors. Not only is this ethically unsupportable, but ultimately, it is also financially unworkable.

My proposal: Supplement the traditional development model with a new pricing model. During the admissions process, along with quoting the stated tuition, the school should inform all families of the real costs of operation on a per-student basis and, further, tell them that they will be expected to fill as much of the gap between tuition and cost as they are able with a donation. To determine this number, the same level of financial disclosure currently asked of financial-aid applicants will be asked of them, and a means-testing exercise will be used to determine capability. Any family not willing to provide such disclosure would simply be told that the school expected the full gap to be met with a donation. (Is Private School Not Expensive Enough?)

Or in effect–the already wealthy should not be demanding scholarships, merit aid, and legacy endowments–they should be paying the full cost of education.

As Asen remarks, this may reduce the number of applicants or make some people think twice about the cost. However, with admissions rates already extremely low, it seems doubtful this would occasion a shift away from these most prestigious institutions.

2. Stop Giving Financial Aid to Wealthy Families

Most of the elite liberal arts college financial aid programs are based solely on need, with no merit scholarships. Their tuition subsidies are effectively a discount-rate percentage break for the wealthy, but at least for the needier applicants, financial aid is determined by need alone. Not so at many tuition-based liberal arts college financial aid programs. These institutions must compete for the favor of the wealthier applicants, and so they offer merit-aid, legacy scholarships, and even financial aid to families making even several times tuition costs.

This must stop. Financial aid should be need-based for tuition-dependent institutions. It would not require collusion for liberal arts college financial aid programs to simply announce that there would be no aid for any family making 5x the annual tuition, or some such formula. The counter argument is that these students would go elsewhere, but where? Many of them are unable to get into the most prestigious institutions. In fact, given the competition at the public universities, many may not even be able to get in there. Perhaps they will abandon college and turn their enormous entrepreneurial skills and creativity into businesses–I say let them go and become job creators. We’ll see how that works out. I’m guessing after a few months at home, parents may decide it’s time to pay for college.

3. Liberal Arts College Financial Aid–Opportunity for Relevance

If we cannot enact the first two proposals, the small college liberal arts experience threatens to drastically shrink, becoming available for only the tiniest of the elite, the already wealthy who understand its benefits. No amount of liberal arts public relations campaigning will change that.

But a different world is possible.

Enacting the first two proposals will give liberal arts college financial aid programs the funds they need to make a liberal arts education relevant. They can then meet the currently unmet need and reduce the massive loan amounts or work programs students are taking on in order to attend a small liberal arts college. Give these students the opportunity to study, to truly study in a full-time residential campus, and without acquiring too much debt. Let them seize the hallmarks of a liberal arts education–thinking, reading, writing, working collaboratively, crossing boundaries–and then go forth into the world. These students will quickly prove liberal arts relevance, accomplishing far more than any public relations or marketing campaign.

Living Anthropologically means documenting history, interconnection, and power during a time of global transformation. We need to care for others as we attempt to build a world together. This blog is a personal project of Jason Antrosio, author of Fast, Easy, and In Cash: Artisan Hardship and Hope in the Global Economy. For updates, subscribe to the YouTube channel or follow on Twitter.

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