Over the past year, competition for the best students has become muddied by a competition over money. To illustrate this point, Admissions Director Michael Goldberger likes to show an e-mail message he received recently from a student who seemed ideally suited to Brown: "If it were entirely up to me," the student wrote, "I would have the acceptance card sealed and stamped already. However, it's not my money. . . I'm apply[ing] to Princeton and Johns Hopkins at the request of my parents. They're happy for me and everything, but they want to compare financial aid before they okay Brown."
The student, fortunately, has since mailed in his acceptance card, but as other Ivy League schools have sweetened their financial-aid packages, Brown has found itself having to work harder to convince some of its most gifted applicants to opt for College Hill. Until the beginning of this decade, administrators from Brown and twenty-two other schools met once a year to divvy up these most talented students. Among other things, officials made sure that students accepted at more than one institution received basically the same financial-aid offer from all of them.
Then, in 1991, the U.S. Department of Justice broke up these meetings on the grounds they were a violation of antitrust law. The consequences of the decision are still being felt. "We're in a war for talent," says E. Gordon Gee. "The days of university presidents going the University Club in New York, smoking cigars, and dividing the world up is over - as well they should be. This is a world in which we have to think differently about how we finance higher education."
In late February, Brown announced a $5 million spending increase over four years for financial aid, paid for with the recent bullish returns on the endowment, with internal funding reallocations, and with stepped-up fund-raising. The plan, which will take effect with the class of 2003, aims to reduce the debt burden of the average graduate by substituting University grants for some loans. The amount of grant money entering the equation will vary with each student's financial need, but every student eligible for financial aid will see some reduction in his or her loans. Students with the greatest financial need will see the greatest decreases.
Beginning this fall, for example, first-year students whose household income is under $30,000 will graduate owing only $7,000 in loans. On the other end of the scale, students from families earning more than $85,000 a year who still qualify for financial aid will owe about $19,000 upon graduation. Most of today's students who receive grants, by contrast, graduate with an average debt of $23,300. Although Brown has taken longer than some wealthier Ivy League schools to address the financial aid conundrum, the need "has been on our radar for a long time," Goldberger says. He adds that over the last decade Brown has required its students to pick up more of the cost of attending college than any of the other Ivies. When Princeton announced an increase in financial aid for its neediest students in January 1998, Yale, Harvard, Dartmouth, and Columbia soon followed with similar announcements. What had been a worrisome blip became a menacing threat: Brown was facing a potential competitive disadvantage.
A final ominous sign came last year, when Goldberger compared two groups of accepted students: those offered the University's most generous financial aid packages and all others. For the first time ever, the percentage of students from the first group who actually chose to attend Brown was lower than the percentage who arrived from the second group. Goldberger discovered that Brown had tripled its losses to Princeton and doubled those to Columbia among students requiring the most financial aid. Then followed a 5 percent dip in the number of early applicants to Brown. Not a tremendous change, Goldberger notes, until you see that all of the schools who had announced changes in their financial aid policies were showing increases in their early application numbers. Then came the e-mail.
How serious is this problem for Brown? Goldberger admits that measuring the impact of this latest financial aid scramble is difficult. Last year, before any changes to the aid equation, the University received its largest number of applications ever, admitted the smallest percentage of them ever, and had the highest yield. Is the problem worth $5 million? Goldberger believes that Brown must act before it is at a competitive disadvantage. He cites "a gut feeling that if we don't act now, two or three years down the road we may have fallen out of the competition for the top kids."
Gee agrees. "It's one thing to be in the Ivy League," he says. "It's another to be of the Ivy League. Brown didn't need to make this decision. It was a decision about who we are and what our character is going to be in the long term." Gee hopes that the $5 million can also be another step toward need-blind admission - disregarding an applicant's financial need until after he or she has been admitted. He would like to see the University move from providing aid to 37 percent of its students to "well over 40 percent - and that moves us toward being need-blind," he says. "Our goal is not only to deepen financial aid, which is what we've done right now, but to broaden it. First we have to make certain we are on a level playing field. Once we've done that, we can talk about phase two."
Jasmine Waddell '99, who was president of the Undergraduate Council of Students and who founded Brown Students for Financial Aid last year, passed up a full scholarship to Boston University to attend Brown - where she will graduate with about $20,000 in student loans. "My parents think I'm crazy," she laughs, "but I wanted to come to an Ivy." Waddell acknowledges that she does not stand to gain much from the University's new policy, but that hasn't slackened her zeal for change. "We cannot stop here," she says. "Our role is to be proud of the moves we're making, and to hold [Gee's] feet to the fire."