Re-focused, Duke may boost financial aid

The only way Carl Harvey graduated from Duke last year was by signing papers.

He signed federal forms and loan applications, scholarship acceptances and a slew of other documents. As a double major in English and public policy, he wrote plenty of papers too, but it was an extensive financial aid package and a parade of forms that covered the cost of his college education.

“I have not a single negative thing to say about Duke financial aid,” he said. “Basically, I just signed stuff, and they paid for everything.”

The University has pledged that its primary priority is keeping its gates open to students like Harvey who have earned access to Duke’s academics but cannot pay its costs. As other colleges have had to abandon need-blind admissions in favor of strategic goals, the University has adjusted its resources to ensure that financial limitations are not a factor in students’ ability to get into Duke—or their choices to come.

About a year ago, University administrators realized that they were failing to consider the effects that financial aid dependence has on students currently enrolled. After years of using matriculation numbers as a barometer for success, the University is now developing ways of comprehensively examining the experience of financial aid.

“The new goal is assuring that students who are financially aided have the opportunity for the same experiences as non-financial aid students,” Provost Peter Lange said.

He commissioned a year-long study of financial aid—the first in more than a decade—and is currently choosing from among dozens of recommendations for improvement. As the University mulls its immediate options, it is haunted by the need to permanently fund the entire aid program—a nearly $1 billion undertaking.

“If it’s only moving pieces around on the same chessboard, there’s not much we can do,” said George McLendon, dean of the faculty of Arts and Sciences. “If we’re just talking about slicing the pie in some different ways, there’s not much we can do.

Senior Jennifer Beall said her financial needs factored into her decision to become a resident assistant for a year. “I didn’t feel forced to do it, but I knew that it would make a big difference,” she said.

Since she could not afford to spend summers at low-paying internships, Beall took eight months off school to work full-time before her senior year.

The University thinks that despite its dearth of funds, it can have an immediate impact on students like Beall, who stretch the limits to stay at Duke.

One of the proposed reforms is to waive the summer earnings requirement for students who spend their summers at internships with academic or career merit.

Sheila Curran, executive director of the Career Center, said that her office sees fewer aided students searching for internships because they opt for higher-paying, lower-skill jobs such as construction.

Another short-term option the University may consider for adjusting financial aid is to allow outside scholarships to lessen the family’s bill rather than detracting from the student’s loan allotments, the area most additional money currently offsets.

The provost’s review also found a number of “annoyances” in the financial aid policy that had accumulated over time, Lange said. For example, the cost of the required freshman meal plan exceeds the allotment for food in the aid formula.

Recent student fee increases, which now total about $250, have not been factored into aid packages, and the disparity of room prices across campus also raises issues.

“Making some of these changes that are being offered is making sure that we walk the talk and are really defending our promises,” Lange said. “These are options—not recommendations—because they all involve significant trade-offs.”

In the longer term, Duke will also look at whether students receive enough money to buy their books. “If I hadn’t worked summers, I would never have been able to buy any of my books,” said senior Nick Chong, explaining that several semesters his grades suffered because he could not afford his $120 textbooks.

He did not want to ask for an emergency loan. “I feel they give me a lot, so I don’t really ask for more unless it’s in the thousands range,” Chong said.

The cost of instituting the majority of reforms in the report would eventually be more than $15 million annually. While the University will likely find money for some of these programs, it is unlikely all of them will be adopted—nor would they drastically change financial aid.

 

The Base of Capital

In President Richard Brodhead’s inaugural address Sept. 18, he virtually announced that the next capital campaign will create an endowment for aid. “Recruiting the support to assure that this school never closes its doors to a worthy applicant will be a project especially dear to my heart,” he said.

With the current resources, the University cannot even consider wholesale improvements to financial aid such as increasing grants or capping tuition. Duke’s endowment, which now totals $2.7 billion, is not sufficient for the needs of the financial aid program, so the University must take money from its annual working budget.

As administrators look to the long-term future of aid and discuss ways to elevate Duke, they are talking about ways to raise the nearly $1 billion necessary to fully endow financial aid.

“If we don’t make a choice to strengthen the endowment now, it won’t immediately affect the current generation of students, but it would affect the future Dukies among their children,” McLendon said.

Tuition, room and board has steadily climbed and will likely exceed $40,000 next year. The University’s ability to provide financial assistance has kept pace with the increases, and most aided families still pay about the same amount to send their children to Duke.

The additional costs have fallen upon the University. In the 1999-2000 school year, the financial aid bill was $24.5 million. Last academic year, Duke paid out $39.5 million.

“That’s money that could be spent developing more programs and academics,” Lange said.

Duke has, however, put some safeguards in place to prevent its academic programs from being consumed by the growth of aid. In 2003, the University capped the rate at which the contribution from Arts and Sciences, the area largely responsible for financial aid costs, could increase.

“We are deeply committed to need-blind financial aid,” Executive Vice President Tallman Trask said. “And for us to say that takes more money directly out of our pocket than anyone else who says it.”

 

The Challenge of the Ivies

At most of Duke’s peer schools, financial aid money is kept separate from the fund for the rest of the university.

Harvard University, Yale University and Princeton University have all revamped their aid programs, making it much easier for students with minimal financial resources to attend. In 2001, Princeton entirely eliminated student loans and now supplies grants for the gap between family contribution and total cost.

Administrators have acknowledged that Duke is not in a financial position to even consider such reforms, although McLendon and Lange have both said it may be an eventual goal.

Lange said the University rarely loses students to other schools primarily due to financial aid, but the report does suggest several options for greater flexibility to choose loans instead of a family contribution.

Since Duke doesn’t have a flashy aid draw, it is trying to make prospective students who write Duke off as too expensive aware of its classic commitment to need-blind aid.

“We talked about how financial aid impacts decisions,” said James Belvin, director for financial aid. “The immediate question is: Do the financial aid awards that we offer allow students to matriculate at Duke? And the answer is yes.”