College financial aid is a hot topic today. Whether or not you’re a parent of college-bound children worried about being able to afford their education, you probably know someone who is, or are hearing about some aspect of it in the news.
    The Scene invited Gary Ross ’77, vice president and dean of admission, and David Hale ’84, vice president for finance and administration, to discuss the whys and wherefores of the financial aid process. As well, they provide their insight into the national picture and how Colgate fits in.

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Who should be applying for financial aid — is there a specific income cutoff, for example?

Ross: I think that’s a personal decision to make as a family. Applicants need to have a conversation with their parents, or the person to whom they would look for support of their college education. That is a great opportunity to gain insight into their financial picture, which for most students is shaped significantly by the financial picture of their parents.
    I don’t know that there is a specific income cutoff; it really can vary. What we say as an admission office is, if you believe you will need financial support to make your college education affordable and possible, then you should apply for financial aid.
 
Hale: I would echo that, and also say a little more strongly that there is no specific income cutoff. It depends not only on income, but also on resources, as well as certain other obligations the family might have. For example, we take it into account when families are paying undergraduate college costs for other children.


So it isn’t that simple. You can’t just say, “If you make x amount of money, you should apply for aid, and if you make more than that, don’t bother.”
 
Ross: Right — it’s not that simple. For the students admitted to our Class of 2015, financial aid was offered to students who come from backgrounds where there literally are no assets, to several families with reported incomes of $300,000 or more. Although that is a high income level, there are situations where it is a possibility to qualify for need-based aid, and indeed it happened in four situations in that class. [See chart to the right.]


People often express the concern that the middle class is getting squeezed out of accessibility to college — that students who are very poor receive financial aid, and those who can afford to pay full tuition have access because of their means. But from the income range you’re describing, it sounds like that situation may not be mirrored at Colgate?
 

Gary Ross ’77, Colgate’s admission dean since 2000

Ross: A few years ago, we had a discussion here on campus on that very point. There was a real disagreement over what constitutes middle class. Someone asked one of our economics professors to help us with the question. It turns out, there is no single definition; the government has one, and various economists have others, for example.
    So when I think about the middle class, I think about a wide range of incomes. Consider an income between $100,000 and $140,000. To most of us, that sounds like a tremendous amount of money and not at all a middle-class income. But what if that person has three kids in college at the same time? What if they are responsible for health care bills for an aging parent? What if their home is in an area where housing prices have plummeted and they bought it at the peak of the market? Facing those kinds of financial challenges, that person would probably qualify for substantial financial aid, whereas another family with that income level but a different situation could qualify for very little aid.
   
Hale: There’s just no way around the fact that an education in a private, residential, liberal arts college is a major investment for a family. I go back to what Gary said earlier: if folks feel that they need assistance, they should apply for aid. They find out if they qualify for aid, and what their aid package is, and then they have to make a personal financial decision as to whether or not they can afford it. Every family needs to make a decision that best fits their situation.

How can families get an estimate of where they might fall?
 
Hale: There’s a net price calculator on the Colgate website where families can input their financial information. It’s not a guarantee, but is intended to provide a sense of the aid package that a family might qualify for.
   
Ross: It’s important to note that the tool is only as good as the information that is plugged in. If somebody forgets about a $75,000 stock portfolio — we have seen that happen — it could distort the information they get from the result. So people need to be careful to put in accurate numbers.

How, then, is a family’s financial aid package determined?
 
Hale: What Colgate and most other schools do is determine an expected contribution — what a family can afford to put toward their child’s education. The key variables are annual income and other available financial resources, such as savings and home equity. And, as I mentioned earlier, having siblings who are attending college also can play a role.
 

And once Colgate determines the level of need, that’s the figure used to calculate the aid package, correct?
 
Ross: Yes, that is correct. And, since students must reapply for aid each year, we will continue to meet the level of their need, determined for that year.
 
 
So it’s an individual-by-individual determination?
 
Hale: It is. Just as the admission office does in determining whether to admit a student, the financial aid office staff reads every application for financial aid and assesses the expected family contribution on a family-by-family basis.
 
 
Once you determine the family contribution, how is the rest of a financial aid package structured to address what we call the “need” in meeting the total cost?
 
Hale: Colgate’s typical package includes a grant, a campus job, and a loan.
 
 
We read so often in the news that many college students are graduating with crushing debt. There is a lot of scrutiny on colleges for the financial burden they are putting on students. Could you talk about Colgate’s expectations for borrowing and how that compares nationally?
 

David Hale ’84, Colgate’s chief financial officer since 2001

Hale: We try to provide as generous a package as we possibly can, so we meet the vast majority of need through grant dollars. While many of our wealthier peers actually have a no-loan policy, we can’t afford that, but we work to keep our loans quite low. In fact, the average debt load for the Class of 2010 is about $13,500. In comparison, the national average for seniors who graduated in 2010 is $25,250, as reported by the Institute for College Access and Success’s Project on Student Debt.
 
Ross: We want a student’s education to be affordable. I think — and I suspect the vast majority of people who are receiving financial aid would agree — that it’s appropriate to ask for students to contribute in some way to the cost of their education, but that contribution should not be so crippling as to hamper them for, perhaps, the first half of their lives after Colgate. I sometimes get frustrated because there are schools out there that call themselves need-blind, and if we followed their practices, we could call ourselves need-blind, too. What they do is graduate their students with tens of thousands of dollars in debt, and just give them a meager amount of financial aid in the form of a grant. Instead, Colgate has had a tradition of graduating people with an affordable, manageable level of loans.
 
 
Can you explain what you mean by need-blind?
 
Ross: As my colleague in the financial aid office, Marcelle Tyburski, often reminds me, need-blind is not a financial aid term; it’s an admission term. Need-blind refers to the process of application review. On the common application for admission to Colgate, there’s a box to check: Do you wish to be considered for financial aid? If you check ‘yes’ and demonstrate financial need, that application will be viewed with consideration given to the fact that you are a financial aid candidate. In a need-blind world, no attention is given to whether or not students are aid candidates when considering them for admission.
 
 
So if someone applies for aid, will it hurt them in the application process?
 
Ross: There are many students we consider for admission for whom their financial need would never become a factor because they’re so highly competitive within our pool. That said, once we confirm the applicants who are legitimate financial aid candidates, for more than a few students, we have to factor their financial need into our consideration for admission. Colgate’s admission policy is what we call ‘need aware’ — because we will not admit a student unless we can meet their full need.
 
 
Does applying early decision give someone an advantage in terms of getting aid?
 
Ross: In terms of the admission process, we give people a slight advantage for applying early decision — but it does not affect their aid award. Someone admitted early decision who demonstrates a financial need will receive the same aid package that they would receive as a regular decision candidate.
    It doesn’t happen at many places, but I will say one of the most despicable practices in the higher education world takes place when colleges make a determination that, because somebody applies early decision, they’re going to give them less than they might otherwise qualify for as a regular-decision candidate. That does not happen here at Colgate.
 

Why doesn’t Colgate offer academic merit aid, beyond a family’s need, to attract more high- achieving students?
 
Ross: An academic merit aid package will not attract a more highly achieving student than the compelling students in our applicant pool who have demonstrated need and wind up on what has been referred to as “the cutting-room floor” because we cannot afford to admit them. Some students might choose to not attend Colgate because they’re not receiving a merit aid package but, in my judgment, we shouldn’t try to fix that problem until we have fixed the problem that involves providing financial access to equally, if not more, compelling applicants.
 
 
Does Colgate offer other types of scholarships?
 
Hale: Through our commitment to compete in Division I athletics with student-athletes who are representative of the student body as a whole, Colgate does offer athletics scholarships in a limited number of sports. These enable our coaches to attract students who are strong both on the field and in the classroom.
 
Ross: Since instituting athletic scholarships back in 2003, a review done by a faculty committee chaired by Professor Doug Johnson in 2009 showed that the overall academic profile of Colgate students increased, and our student-athletes are third in the nation in NCAA graduation rates.
 
 
What are the biggest misperceptions about financial aid?
 
Hale: It’s important to remember that there are more than 4,500 U.S. colleges and universities — large public universities, private colleges, two-year colleges, four-year colleges — including about 1,500 for-profit schools. Within those categories are schools that are stronger financially, and those that are weaker. As a result, financial aid is approached in many different ways that are often unique to a particular college’s situation. The press tends to lump all 4,500 schools together and say, this is what’s going on, and this is how a family should address financial aid. But there are so many differences in how schools might approach a single student that folks should not take one anecdote from one college and transpose that to think, “This is how I will be treated across the board.”
 
Ross: What an important point. I saw a figure recently that small private liberal arts colleges are attracting about 6 percent of college-bound students each year. Even within the small-college world, we don’t all have the same financial aid practices, but once you add in for-profit institutions and large public institutions, you can’t imagine how many different financial aid policies and practices there are.
 
 
It sounds like the important thing is for families to ask the same questions everywhere they’re looking, to get a better understanding of how each institution will approach their situation?
 
Hale: Right. If someone is looking at all similar types of schools, that will narrow the range of responses they might get. But, as Gary points out, many schools similar to Colgate may approach aid quite differently. For example, one of the things we are proud of is that we don’t “gap” students — some schools come up with an expected family contribution and say, “we can’t meet your full need, but we’re willing to give you a portion of that need. And if you can figure out how to make up the difference, you can come here.” Colgate does not follow this practice.
 
 
We’ve heard stories of students who receive aid for their first year, but then their package gets reduced the next year. Does that ever happen at Colgate?
 
Hale: Our commitment is to meet the full demonstrated need, which gets recalculated every year. If a family’s financial situation changes for the worse, we are fully committed to respond to that. But, if in subsequent years more resources become available to the family, the package will be reduced; the most common instance is when a sibling graduates from another institution. So, it’s an individual-by-individual and a year-by-year decision.
 
Ross: I also think it’s a great reflection on the university’s practices and sound financial management that, while our country has been going through some of the toughest economic times in history, Colgate has never entertained the notion of reducing students’ financial aid packages, even when the economic crisis was at its peak.
 
 
Speaking of the economic crisis, the mortgage and housing debacle has loomed large. As you mentioned earlier, one of the factors in determining need is home equity. Many people are worried about the value of their homes. Some have been greatly reduced; others have homes whose values have skyrocketed, while their incomes do not reflect that value. Could you explain how home equity factors into determination of a financial aid package?
 
Hale: Home equity is considered an asset that goes into the calculation to determine expected family contribution. If equity in the home has decreased, that is going to reduce the expected family contribution, which would indicate a greater need that Colgate would meet. We certainly have experienced that, and we’ve also seen our average financial aid package increase over time, as have our peer schools.
    On the flip side, where there’s a significant amount of home equity, we recognize that not all of it can be directed toward a child’s education, so we cap home equity at two times the family’s income when considering a financial aid application.
 
 
Could you explain how outside awards — for example, foundation scholarships — are taken into account in calculating a Colgate financial aid package, and why it’s handled that way?
 
Hale: This is one area where every school’s got a different policy. We do count the award as an additional resource; however, we do not reduce the grant the student receives, but rather apply that outside award to reduce either the job and/or loan component.
 
 
What about international students — can they apply for aid?
 
Hale: The same rules apply. We come up with an expected contribution and offer packages for international students just as we do with domestic students.
 
 
What should parents be looking at or thinking about in terms of financing college costs?
 
Hale: They vary by state, but there are very good state and private college savings programs called 529 plans, which are good savings vehicles that folks should investigate because there are some tax benefits associated with them. We know that families also utilize PLUS loans, which are federal parent loans, and some use home equity lines of credit (we call them HELOCs). In addition, many schools, including Colgate, offer a monthly payment plan.
 
 
How many students receive financial aid from Colgate today?
 
Ross: About 40 percent of our students receive financial support from Colgate. I tip my hat to Dave Hale and the business and finance side of the institution; that percentage has been steadily increasing. Even in the epicenter of the economic meltdown, when colleges and universities were having massive layoffs, Colgate did not, and when colleges and universities were having massive cutbacks in financial aid, Colgate actually added financial aid dollars.
 
 
How much does Colgate spend on financial aid each year?
 
Hale: In this current academic year, approximately $42 million is providing aid for just under 1,200 students. In recent years, we have increased not only the size of individual aid packages, but also the number of students we aid.
 
 
What’s the university’s philosophy behind increasing the number of aided students each year?
 
Hale: We view every additional financial aid package we can offer in an incoming class as a victory. And we are really focused on continuing to do that. There are two points. One is, we would like to increase diversity of all types in the student body, including socioeconomic diversity, so that more students from a broader range of backgrounds, including those from the middle class, can afford to attend Colgate.
    Second, right now, for our financial model to work, in each incoming class we need about 60 percent of our students to come from families who can meet the full price of attending Colgate. We need to lessen our reliance on that tuition income, slowly but surely over time, and instead build more endowment to draw from as a long-term financial strategy for the university.
 
 
How has that been going?
 
Hale: Coming out of the 2008 financial crisis, while we had to reduce expenditures overall, one place we didn’t reduce — and in fact, as we mentioned earlier, increased — was financial aid. But, in addition to reducing expenditures elsewhere, much of the increase in the number of students we’ve been able to offer financial aid to has to do with the success that President Jeffrey Herbst and the advancement staff have had in raising financial aid dollars during the Passion for the Climb campaign.
 
 
Can you provide a sense of where things stand on that front?
 
Hale: Originally, we were hoping to raise $87.5 million in commitments for financial aid, and we exceeded that. And so, in the final year of the campaign, Colgate set an additional goal of $40 million. It appears that we’re well on our way to achieving that goal as well. It’s important to point out that some of these are future commitments through planned gifts and bequest intentions, so not all of those dollars have yet been received. But we have been able to immediately put spendable gifts we have received to work to aid more students.
 
 
Colgate did admit one class need-blind, the Class of 2006. Aside from learning that the university couldn’t afford to continue the practice, was there anything else valuable that was learned in that experiment?
 
Hale: Financially, it did inform us of the incremental cost to fully pursue need-blind admissions at Colgate.
 
Ross: I think the Class of 2006 is very proud of the distinction of being need-blind, and they are an outstanding class. A couple of years ago, I received a letter from a member of that class, who told me why he thought their class was so distinctive. He described to me some of the friends and relationships with members of his class who were very different from himself. It was very moving to read how this one student reflected upon his experience and tied that into what he considered to be the need-blind experience that he was able to avail himself of while a Colgate student.
 
 
How would becoming need-blind change the student body?
 
Ross: It would be a dramatic step for Colgate. Dave mentioned that one of our goals is to be a place that has more socioeconomic diversity, and being need-blind would enable us to achieve that goal. Also, if one looks at the students whom we are not able to admit because of their financial need, these are high-achieving students who have made an impact on their schools, their families, and their communities — and yet, they were not the very strongest in our application pool, so they were not among those selected for admission with financial aid. Those are the most difficult decisions that we make in admission. We want Colgate to be accessible for all competitive students, regardless of their need.
    We’ve been very fortunate, as a part of the current campaign, to receive some terrific donations in support of financial aid. But, as we discussed before, we’re not need-blind. We can’t expect to be need-blind in the near future, but thank goodness for many alumni and friends of Colgate who have made financial aid a top priority, because every donation that comes in brings us that much closer to a day when Colgate will become a need-blind institution.
 
 
Dave, can you give us a sense of how close are we? What would it take, in today’s dollars?
 
Hale: We think we would need to aid about 75 — about 10 percent — more students within each incoming classs, which would mean that approximately 50 percent of each incoming class would receive financial aid. That translates into approximately $2.5 million of incremental costs per class, or $10 million when fully rolled out for four classes. To fully endow a need-blind admission policy tomorrow, we would need an additional $200 million in endowment.
 
 
That would be in addition to meeting the current campaign’s final goal?
 
Hale: Right. So on the one hand, it still is a very aspirational objective. On the other hand, again, we’re trying to chip away. Colgate has increased the number of financial aid recipients per incoming class by 30 throughout the past decade, so we’re making real progress.
 
 
Does not being need-blind put Colgate at a competitive disadvantage?
 
Ross: While I fervently believe that Colgate is already a part of the collection of top colleges and universities, there’s no question that, among the most highly regarded colleges and universities, most are need- blind.
 
Hale: There is no question that there would be a competitive benefit for Colgate. That said, ultimately, we are driven by trying to make Colgate as accessible as possible, and that’s really the motivation.


– Rebecca Costello

Tyburski’s tips: questions to ask Are you navigating the college financial aid process? Marcelle Tyburski, Colgate’s director of financial aid since 1993, shares her advice on the questions families should ask. What forms do you require, and what are the deadlines for applying for financial aid? What is the complete cost of a year at your institution, including tuition, fees, room, food, books, and average personal expenses? What is the typical composition of a first-year financial aid package? Will you meet our full need, or will there be a gap? Are PLUS (parent) loans included as part of an aid package? How many hours a week is a typical work-study award each year? (10–12 hours/week is reasonable) Are non-custodial parents required to submit financial information as well? How will my financial aid package be adjusted if I receive any outside awards? What happens to the financial aid package after the first year? Will any increase in school costs be covered by the institution, or the family? What are your scholarship/grant policies; for example, do scholarships depend on maintaining a specific GPA? Is campus housing available for all four years? For more information on these topics, check out these online resources: • Financial Aid FAQ's • Net Price Calculator • Financial Aid and Financing Options brochure Check out the webinar about the financial aid process with Tyburski and admission deans Karen Giannino and Lynn Holcomb to the right.