Cornell joins MIT in scaling back aid even as endowments rise
CORNELL UNIVERSITY and MIT are scaling back financial aid to students.
BLOOMBERG FILE PHOTO/MICHAEL OKONIEWSKI
By Janet Lorin Bloomberg News
NEW YORK - Cornell University and Massachusetts Institute of Technology are scaling back financial assistance to students, adding to the burden of families already coping with climbing college costs.
Cornell, the Ivy League school based in Ithaca, New York, will force students whose families make more than $60,000 a year to seek other financing to pay for part of their studies starting in 2013. This fall, MIT is raising the amount low- income students contribute by 36 percent to $6,000 a year.
Students are being asked to pay more even as college endowments show double-digit growth as they recover from the 2008 financial crisis. With more students qualifying for aid, Cornell said its spending on financial support has jumped almost 20 percent a year on average since 2008, a pace it won’t sustain by drawing directly from the endowment.
Cornell, which costs $60,000 a year, is good value for students’ money, even with the changes to financial-aid, said Barbara Knuth, vice provost and dean of the graduate school.
“I don’t see that as problematic in the context of providing access to an Ivy League education,” Knuth said.
More than 80 percent of need-based financial aid awarded to Cornell undergraduates is provided through university funds, according to the school. The cost to attend has climbed 4.6 percent a year on average since 2008.
Cornell’s endowment grew 20 percent to $5.35 billion in the year ended June 30, 2011, according to the school. Still, it’s down from a $6.1 billion peak in 2008.
In January 2008, Cornell said it would offer more financial support to meet “the needs of our diverse student body,” by dropping the requirement that students take out loans if their families earn less than $75,000 a year. The decision would let low-income students graduate debt free, the school said.
Under the plan that begins in 2013, students with family incomes between $60,000 and $75,000 will get financial aid packages with loans capped at $2,500 annually. The cap is $5,000 a year for those with incomes between $75,000 to $120,000.
Cornell, one of eight schools in the Northeast U.S. that make up the Ivy League, drew $35 million from its endowment in the 2009-2010 year to augment undergraduate financial aid. The agreement will end after the 2013-2014 year, Knuth said.
“It would not be a sustainable practice to draw directly from the endowment,” Knuth said. “That’s part of what informed our decision to think about modifications to the financial-aid programs to slow the rate of increase.”
Three of Cornell’s undergraduate colleges, known as land- grant colleges, are lower priced for New York State residents.