Study Group Recommends Minor Changes to Financial Aid PoliciesBy Priya Prahalad
The Financial Aid Study Group recently presented their findings about financial aid at MIT and their ideas on how to improve financial aid.
Since March, the group, headed by Stanley G. Hudson, director of student financial aid, and Harold Abelson PhD '73, professor of electrical engineering and computer science, studied financial aid at MIT and other schools. They found that the actual cost of attending MIT was among the highest in the country.
The group recommended a further cut in the self-help portion of a financial aid award, which, even with a $1,000 cut last year, is one of the highest in the country, Abelson said.
Self-help represents the amount that a student is expected to contribute to his or her education. It includes loans and work programs as well as expectations of summer earnings.
The group also suggested that outside scholarships be deducted entirely from the self-help portion of a student's financial aid, Abelson said. Currently, only half comes out of the self help.
Group prompted by aid changes
The organization of the study group was prompted by the extensive changes in financial aid policies by other universities, Abelson said.
"Twenty years ago financial aid was just aid," he said. "Now it's a form of competition. Financial aid is now a competitive weapon used by schools to attract students."
Although other schools have made extensive changes in their basic financial aid policies, MIT does not intend to follow their lead, Abelson said. "MIT is still committed to its policy of need-blind admission and need-based financial aid," he said.
"MIT should compete with other colleges on the basis of cost and value without compromising need-based aid and admission," Abelson said.
The group's research revealed that 43 percent of undergraduates are paying the full $33,000 each year to attend MIT. Moreover, 50 percent are paying more than $25,000 without outside scholarships to attend MIT this year.
The group also surveyed students with Scholastic Assessment Test math scores over 720 who did not apply to MIT. One of the main reasons that these students did not apply was the cost, the group's findings said. When this survey was narrowed to potential science and engineering students, cost was the largest single reason that the students did not apply.
MIT began redesigning its financial aid policies last year by cutting the self-help portion of a financial aid package by $1,000.
More alumni programs suggested
The group proposed that MIT make itself a better value for the money by having more services for alumni and alumnae. One idea is to have the Dean's Office collaborate with the Alumni Association to provide more programs and continuing education.
MIT also plans to encourage more people to apply, Abelson said. The group suggested that there should be more programs to make people aware of the Institute's financial aid policies. Also, MIT needs to market itself better, he said. The admissions office should do financial aid publicity to let people know the value they are getting for their money by attending MIT.
The group also urged MIT to help their students find outside scholarships to help with the cost of an MIT education. To compete with other schools, the group proposes that MIT should send out potential financial aid packages with the early action acceptances.
All of these proposals are still being considered, Abelson said. There will be no decision reached on financial aid policies for the next few weeks. MIT still needs to determine if there is enough money within the budget to support these proposals. Also, it is not known if any of these policies will be retroactive, or if they will only apply to newly admitted students.
"Making the policies retroactive will make it four times as expensive for MIT," Abelson said. "It is still a better choice to make the new policies retroactive."
Other schools see major shifts
Some schools, such as Vassar College, have completely dropped need-blind admissions, whereas Johns Hopkins and Brown Universities are slowly moving away from that policy.
Other schools are adapting a policy in which a student is admitted to the school, but is denied financial aid if he is near the bottom of the admitted class. Harvard University has adopted a policy of "differential packaging" in which financial aid is based solely on family income, but the grant/loan split is based on the desirability of the student.
The California Institute of Technology is turning to merit-based aid in order to attract their top students. Their top twenty students in each class will receive full scholarships to Caltech regardless of their financial situation.
Additionally, many second-tier schools are attempting to lure top students away from the top universities by giving out lucrative financial aid packages.
MIT does not practice any of these policies. "Financial aid and admissions are not under the same office," Abelson said. "Admissions representatives don't know an applicant's financial aid situation, and the financial aid department only knows the financial aid form and that the student is admitted."
In a letter to last year's admitted students, Harvard encouraged students to bring in other financial aid offers in order to discuss a change in the student's financial aid package. Unlike Harvard, MIT will not compete with other financial aid offers.