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U. financial aid squeezes middle-class families

Students graduate with highest loan debt in Ivy League, struggle to pay cost of attendance

When Amanda Ruggieri ’16 graduates from Brown, she estimates that she will owe between $40,000 and $50,000 in debt. Ruggieri receives a full tuition scholarship from the University, as well as federal Perkins loans and Pell grants.

She also works 13 hours per week as a cashier and supervisor at the Blue Room and five hours per week as a teaching assistant for CLPS 0010: “Elementary Psychology: An Introduction to Mind and Behavior.”

But Ruggieri’s financial aid and multiple on-campus jobs don’t cover the full cost of attendance. The University estimates the cost to be $62,694 for the current academic year — of which tuition is only $46,408. The roughly $16,000 remaining goes toward room, board, books and miscellaneous fees. Ruggieri is paying for college herself, so to meet all costs, she is taking out approximately $11,000 per year in student loans.

“It’s an awkward experience,” Ruggieri said, reflecting on the discrepancy between how she is paying for college compared to many of her classmates. “A lot of people are paying for Brown out of pocket. When they graduate they can do whatever they want.”
“There’s always the expectation that families will contribute, and that’s not always the case,” she said.

For many middle-class students like Ruggieri, attending Brown — a university with a stated commitment to meet all demonstrated financial need for domestic students — can entail student loans or payments that dig deeply into family and personal savings.

Financial realities

Though the University has attracted a relatively high percentage of low-income students — as represented by the share of students receiving federal Pell grants — Brown lags behind many of its peer institutions in university-provided aid, and its graduates have the highest average debt burden of the Ivy League.

This year, 43 percent of undergraduates received financial aid, said James Tilton, director of financial aid. This measurement of aid does not include students who receive only loans and work-study assistance. Including these categories, 46 percent of Brown students receive some form of financial aid during the current academic year, according to the Office of Financial Aid’s website.

By this metric, Brown has consistently been at the bottom of the Ivy League in recent years. According to a U.S. News and World Report survey of the 2012-2013 academic year — the most recent year available with full data on Ivy League institutions’ financial aid profiles — Brown ranked last out of the eight Ivies on the percentage of students who received any form of aid from their school. Princeton and Harvard ranked at the top of the Ivy League, with 59 percent and 58 percent of students receiving university aid, respectively. Penn was the closest to Brown’s 46 percent mark, with 47 percent of Penn students receiving aid from their school.
And for graduation debt — a key focus of national policy discussions about financial aid in higher education — Brown also ranks worst in the Ivy League.

The average graduate in the class of 2013 left College Hill with $24,382 in debt, according to a report from the nonprofit Institute for College Access and Success. This figure is less than the national average of $28,400, according to the report, but makes Brown students the most indebted in the Ivies. Princeton graduates were the least indebted among the Ivies, graduating with $5,552 in debt on average.

Middle-class students at universities like Brown, which provide need-based aid, typically receive less aid compared to low-income students than they do at universities that provide merit-based aid, said Lucie Lapovsky, principal for Lapovsky Consulting and an expert in higher education finance and governance.

A significant gap persists between the share of Brown’s applicants who apply for aid and those who receive it. Among the 67 percent of admitted students who applied for aid in the class of 2018, only 44 percent received any, according to the Office of Admission’s website.

A ‘function of resources’

While the comparatively low rate of students receiving aid from the University could point to the presence of many high-income students on campus and the budgetary limits of Brown’s financial aid program, the portion of the student body receiving Pell grants indicates that the University has attracted a larger share of low-income students.
Among Ivy-plus schools — the Ivies, Stanford University and the Massachusetts Institute of Technology — Brown ties for the highest percentage of students receiving Pell grants, a federal aid program that funds low-income students pursuing higher education. An average of seventeen percent of Brown first-years received Pell grants from 2012 to 2014, along with the same percentage for Harvard and MIT, the New York Times reported Sept. 8. In the current academic year, 1,095 Brown students received Pell grants with a total value of $4.8 million — an 11 percent increase over the last five years, according to the Financial Aid Office website.

But with many students at both ends of the socioeconomic spectrum, middle-class students are often forced to take out loans to fund their education, leading to debt upon graduation.

And unlike many of its Ivy peers, Brown’s financial aid packages include both grants and loans, which must be paid back with interest. Columbia, Harvard, Penn, Princeton and Yale do not include loans in their aid packages, Tilton said.

“If a family earns less than $60,000, there is ordinarily no parental contribution, and (families with annual incomes) under $100,000 have no loans in their aid packages,” said Dean of Admission Jim Miller ’73.

But Miller acknowledged that Brown has work to do in catching up to its peers on meeting the needs of students who fall between the ends of the socioeconomic spectrum. “We do a good job with low-income students, but I think we’re all concerned about the pressures on middle-class families,” he said.

The presence of loans in financial aid packages is a “function of resources,” Tilton said. The University will spend $104.1 million — 11 percent of its total operating budget — on financial aid during the current academic year, according to the Financial Aid Office website. This budgetary category has seen rapid growth since the University adopted need-blind admission for domestic applicants, a policy that began with the class of 2007.

The size of the endowment — $3.2 billion, the smallest in the Ivy League — may put the University at a disadvantage when it comes to attracting students based on financial aid offerings. Harvard’s “Zero to 10 Percent Standard” program is tailored to low-income and middle-class students: Families with incomes below $65,000 are not required to contribute to the costs of attending the university, and families with incomes below $150,000 will pay less than 10 percent of their income, according to Harvard’s financial aid website.
The students interviewed for this story all identified as either middle or lower-middle class. They receive some financial aid from the University but not enough to cover all expenses, pushing them to take out loans or rely on significant contributions from family members.

Stretched wallets

Some middle-class students have seen their financial aid packages fluctuate during their time on campus due to changes in their family’s income.

Peter, a junior who requested anonymity when discussing his family’s financial situation, had an expected family contribution of $13,000 his first year at Brown and $14,000 his sophomore year. His father is retired and works part time while receiving Social Security benefits, for an adjusted gross income of $35,000 in 2011 and $38,000 in 2012.

Last year, Peter’s father turned 66, and the family’s income rose to $53,000 because Social Security policy removes a cap on additional income for beneficiaries who are least 66.

But Peter’s father also cashed out two Individual Retirement Accounts worth $18,000, which the University counted as income when calculating financial aid allocations. With family income now totaling $71,000, the University raised Peter’s expected family contribution to $22,000, a 57 percent hike compared to sophomore year.

“I’m sure it makes legal sense, but it’s a slimy way to include income when your dad cashes out his retirement fund to pay for his son’s college,” Peter said.

Having exhausted family and personal savings, Peter anticipates having to take out approximately $15,000 in loans next year to meet the expected family contribution he believes Brown will charge his family.

“I’m a little bitter,” Peter said. “I can’t fault them — I’m getting solid financial aid, but at institutions like Brown, it seems like I wouldn’t have as much trouble.”

Peter said the expected student contribution of $3,000 earned from a summer job is unreasonable given that an Undergraduate Teaching and Research Award, which he plans to pursue next summer, only provides a $3,500 stipend. With food and housing costs subtracted, the UTRA stipend would cover significantly less than $3,000.

Thomas Pettengill ’17 said the Financial Aid Office expects him to earn $2,750 per year from work-study this year, which he said will be tough given that he earned only $480 last year at his work-study job as an intramural sports referee. “While I could apply for another job, I’m not sure I should have to,” he said, adding that academic commitments prevent him from taking on an even larger burden of outside work.

Over the summer, Pentergill worked seven days per week doing customer service for a T-shirt company and worked at a campground office 64 hours per week. He took out $2,750 in loans last year and $4,000 this year.

But Robert, a senior who requested anonymity when discussing his family’s financial situation, said he was content with his financial aid package, under which his family pays roughly $10,000 per year. When his parents were unemployed, the University adjusted his aid package to be more generous, Robert said.

Some middle-class students said they feel the squeeze of smaller financial assistance in limiting the opportunities they can pursue outside the classroom.

If the University had not upped his family’s contribution based on his father’s additional income, Peter would likely have pursued a trip abroad with an extracurricular group with which he is involved, he said.

Ruggieri said she could not afford to pursue a summer job or internship away from home because she needs to save money to pay for attending Brown.

Sophie Flynn ’15, a former Herald staff writer, described her $56,800 annual aid package, which includes Pell grants but the majority of which comes from the University, as “very generous.”

Nonetheless, Flynn ended up taking out $9,000 in loans when she studied abroad in Paris last fall. While she said the loans were not absolutely necessary to pay expenses, she “wanted to be on the safe side” when traveling in a foreign country.

Like Ruggieri, Flynn said she is not considering any summer jobs or internships outside her home area because of constrained finances for Brown. During the school year, Flynn babysits for a family 10 to 12 hours per week, and over the summer she works as a waitress.
But Flynn chose to attend Brown despite better aid package offers from Cornell and Duke University. “Even though I was offered more aid at other schools, it has definitely been manageable here,” she said.

Comparing schools

Weighing financial aid packages often becomes a deciding factor for middle- and lower-income students when making college decisions.
For Ruggieri, Brown was a top-choice school and the least expensive option. Attending the University of Rhode Island, even with discounted in-state tuition, would have required Ruggieri, a Warwick, Rhode Island, native, to take out $23,000 in annual loans, she said.

But Pettergill applied to Brown early decision, aware that if accepted, he would not be able to weigh financial aid awards from other schools. When he was deferred, he applied to several local universities and compared their aid offerings to Brown’s when he was accepted in the regular decision cycle. Attending Bridgewater State University near his home in North Attleboro, Massachusetts, would have meant paying just $8,000 per year, but his parents encouraged him to choose Brown, his first-choice school.

Ruggieri said that for many students at Brown, discussing their family’s financial situation and their financial aid package is taboo. But, she added, “The more people talk about it the more it becomes accepted.”

For Tilton, who co-chaired the Committee on Financial Aid for President Christina Paxson’s strategic planning process, feedback from students centered on the University’s need to “take care of the students who are here,” he said.

“I agree we should pay attention to middle-income students and the students who are on campus,” Tilton said. “We’re trying to pay attention to the resources that are necessary.”


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