MIT changes its finaid policyBy Sally Vanerian
A change in MIT's financial aid policy has reduced the amount that MIT grants are decremented as a result of outside scholarships.
MIT's original policy, according to Leonard V. Gallagher '54, director of the Student Financial Aid Office, was that when a student on financial aid received an outside scholarship, his grant was reduced by the same amount.
This policy was not popular with students or donors, he said.
The Committee on Undergraduate Admissions and Financial Aid (CUAFA) recently instituted the Scholarship Incentive Program, according to committee chairman Kenneth R. Manning.
Under this new program, outside scholarships are first used to reduce the self-help level by up to $1000, Gallagher said. Any additional scholarship money will be used to reduce the grant. Gallagher explained that the committee hopes to provide an incentive for students to apply for outside scholarships.
Eighty percent of all MIT undergraduates receive financial aid of some sort, Gallagher said. Sixty-five percent of these students -- or 52 percent of all undergraduates -- receive aid from the Institute, he added.
Self-help is that portion of a student's financial aid that can be satisfied through government or MIT loans. The financial aid package given to undergraduates receiving aid at MIT consists of two parts: self-help and grant, Gallagher explained. The self-help level this year is $4900, including term-time earnings and loans.
The Guaranteed Student Loan (GSL), National Direct Student Loan (NDSL) and Technology Loan Fund or term-time earnings help students fulfill the self-help requirement of $4900. Undergraduates can receive $2350 through the GSL, with an interest rate of eight percent. Interest does not accumulate until six months after the student leaves school. GSL interest rates vary each year.
MIT applies annually to the NDSL program, Gallagher said. The NDSL can loan the student $1300, at an interest rate of 5 percent, he added. This leaves a minimum of $1250 of self-help, Gallagher said, which can be accumulated through term-time earnings or still another loan, this one from the Technology Loan Fund.
The Technology Loan Fund loaned a total of $750,000 last year, he said. Much of it was given to foreign students who are not eligible for the GSL or the NDSL, Gallagher noted. Remaining financial aid is given to the student in the form of a grant, he explained.
The federal government provides about 18 percent of all grants given to students, Gallagher said. The Institute also annually receives donations from alumni, friends of MIT, and corporations.
Forty percent of MIT grants are dollars given to the Institute designated for specific programs, according to Financial Aid Office statistics. MIT uses its own unrestricted funds to provide the remaining 42 percent.
Unrestricted funds are money given to the Institute that not designated for a particular purpose, Gallagher said. MIT has chosen to appropriate a large portion of these funds as grants, he added. The Financial Aid Office is planning to give out $6 million in the coming year.
The big question that looms ahead in financial aid is that of funds, Gallagher said. The proportion of need met by self-help is going up as the tuition increases, Gallagher said. Congress, however, is resisting President Ronald Reagan's conservative budget propositions concerning financial aid, he said, and there is talk in the federal government of a 1987 aid program. Next year should be stable, he predicted.
The federal government's pulling out of financial aid has not had much of an impact on MIT, he continued.