The cost of attending elite educational institutions has long been a topic of intense debate: private school costs often place a significant financial burden on families. In light of the recent pandemic and increasing student concern over the negative impact of student income contributions, several Ivy League institutions have announced plans to implement new financial policy changes—Yale University plans to announce a financial restructuring plan in early November.
Although specific calculation methods vary by school, there is often a difference between the sum a school expects a family to contribute to their child’s education and the actual amount the family can afford to pay, referred to as the financial aid gap. Colleges take various financial information such as income, tax data, household size, and assets into account when determining how much need-based aid to provide each student.
No-loan institutions work to replace student loans from financial aid packages with feature grants, scholarships, and work-study aid. Pomona College and the University of Chicago are examples of no-loan universities aiming to reduce debt obligations for students.
Similarly, Yale’s school’s aid policies ensure that all demonstrated need is met with no-loan packages, but students often cover their student share through loans. The student share is part of the expected family contribution, calculated based on unbilled expenses, books, clothing, and jobs. For Yale, this amount typically ranges from $3,700 to $5,950. However, as stated by Sammy Landino ‘21, “hitting students with costs that they have to find employment to earn money to repay [can] take away their chance to make the most of the school.”
Beginning the next academic year, Yale will eliminate the student income contribution estimate, and round all student shares down to $3,700. Princeton already made a similar reduction back in 2019, while Dartmouth launched a campaign in 2018 to eliminate eligible undergraduate loans. The school also recently expanded its program to provide no-loan awards for families with annual household incomes of $125,000 or less, starting with the Class of 2026.
With a $3 million investment, Yale’s reform to increase the campus’ socioeconomic diversity translates to a 34% decrease in student contributions, or roughly $7,500 over the span of four years, for undergraduates who receive partial aid. In addition, the financial restructuring includes a proposal for international students, who are required to pay the marginal tax. The US marginal tax is placed on scholarship money exceeding the cost of tuition used to cover housing, school supplies, or other academic expenses. Effective immediately, Yale will cover all eight semesters of marginal tax costs, while they previously covered just two semesters.
During our current endemic, Yale is not the only school prioritizing accessibility to education for students from all socioeconomic backgrounds. On October 21st, Cornell announced the launch of a five-year, $5 billion fundraising campaign. The money will be used to increase the number of undergraduates who receive aid, reduce middle-income undergraduate students’ tuitions by an average of $5,000 per student, and waive a portion of lower-income graduates’ expected contributions. The university hopes that eliminating parts of the student income expectations will allow students to freely pursue low-wage or unpaid summer internships and research opportunities.
Attending private schools will continue to be a great financial investment, and school boards, faculty, and student activists continue to call for more active policy changes. It is crucial for many educational institutions to send the message that they are committed to being affordable for all students. After all, nothing is more imperative than making sure that every admitted student has a seat at the table to create a more robust, inclusive campus community.