Wall Street firms and automotive giants aren't the only institutions feeling the effects of the global financial crisis. As the country's financial woes seep into college endowments, students across the country may feel the pinch in the coming years through reduced financial aid packages.
Laura Talbot, director of financial aid at Pennsylvania's Swarthmore College, said Swarthmore was able to offer loan-free awards to all students with "demonstrated need" for the 2008-2009 academic year. But while Talbot added that the need-blind college has announced to students that "there will be no change" in the college's financial aid promises, she said the college can only make that guarantee for the next school year. Last December, Bloomberg News reported that Swarthmore lost almost 30 percent of its endowment's value over five months.
To cope with the losses, Talbot said, the financial aid office has put together a budget that diverts more of the school's resources to financial aid. Talbot said all of the college's financial aid dollars come from the school's endowment - not from tuition and fees.
There may be a rise in demand for financial aid, but it will be unclear if and by how much the necessity for aid will increase until this year's April deadline for financial aid requests, Talbot added.
At Colby College in Maine, where the endowment has fallen by more than 25 percent, the percentage of aid applications remains fairly steady, according to Lucia Whittelsey, director of financial aid at Colby. Whittelsey wrote in an e-mail to The Herald that, over the last three years, aid applicants have made up 60 to 63 percent of the admission applicant group. This year, that figure currently stands at 63 percent.
Colby has a "need-aware" admissions policy, Whittelsey wrote, but the school will be able to meet the calculated need of all admitted students. For the first time this year, Colby is offering aid packages with no loans. Unlike Swarthmore, Colby does draw some of its aid funding from tuition.
William Adams, president of Colby, addressed parents and students in October, telling them the school remains "committed most fundamentally to current students, faculty, staff," but added that the school - like many of its peers - will look to make adjustments in the budget of the institution.
Amherst College President Anthony Marx made similar remarks in a letter to his school's community.
"We will make some adjustments to our spending, while ensuring that we can maintain our core commitments," Marx wrote in the letter. Amherst will continue its need-blind admission policy, he wrote.
The statements come as college tuition climbs to an all-time high. In 2008, the College Board reported that the average cost of attending a private, four-year college for the 2008-2009 school year was $34,132. Ten years ago, the cost of the same education in 2008 dollars was $27,580, according to the College Board.
The National Center for Public Policy and Higher Education reported last year that the cost of college tuition continues to outpace median family income and the cost of medical care, food and housing. The cost of college tuition and fees has grown more than 400 percent since the early 1980s, according to the center.
