In the midst of financial turmoil, three small pieces of good news for students have emerged. Texas A&M, Boston University, and Vanderbilt have each announced hefty increases in their financial aid generosity in recent weeks.
That brings to at least 53 the number of schools that have made some sort of public pledge guaranteeing an affordable education to low-income students. A fairly comprehensive list of the pledges can be found at the Project on Student Debt's website.
Although these plans are improvements, they don't necessarily mean free rides. Like many of the older pledges, the new ones have catches that mean students and parents could still have to take out big loans.
Still, freshmen at the main College Station campus of Texas A&M got a happy surprise last month when the school announced that starting with the class of 2012, it would give free tuition to any student who maintains a B-minus average and comes from a family that earns less than $60,000. Texas A&M estimates the new Aggie Assurance scholarships will cost the school an additional $300,000 this year.
About 150 current freshmen already have had their accounts credited, says Joseph Pettibon, Texas A&M's assistant provost for financial aid. As new freshman classes start collecting their scholarships in future years, the school expects to aid more than 5,000 students at a total annual cost of $3 million. Texas A&M had this year's $300,000 sitting in an aid account and expects to cover the future costs through tuition, Pettibon says. Texas has benefited from high oil prices and thus isn't facing the kind of budget crises that have hit states such as California and New York.
Students still will have to cover living and other expenses, however. And those costs exceed A&M's $7,800 annual tuition. The school typically can't provide enough scholarships or grants to cover dorm, food, books, and travel for the lowest income students, so those students might have to borrow and work to cover about $12,000 each year.
In a similar development, Vanderbilt earlier this month announced it would replace all need-based loans in its financial aid packages with grants—free money—starting next year. As a bonus for all the current seniors who might feel a little jealous, Vanderbilt said it would replace their spring semester need-based loans with grants.
The plan will cost Vanderbilt $15 million a year and affect about half of the school's 6,500 undergraduates. Despite the current economy, and even though it still needs to raise another $100 million to fully fund the program, Vanderbilt is proceeding with this expanded aid. "We are going to have to work doubly hard" to raise that money in the midst of today's financial stresses, says Douglas Christiansen, associate provost for enrollment and dean of admissions. But school officials believe it will be worth the hassle because scholarships that meet all of students' financial needs will likely attract the nation's best students, no matter how much, or little, their parents make.
In late September, Boston University announced it would give scholarships to meet the full need of graduates of Boston public schools. No loans will be included in the students' financial aid packages. BU says that will help anywhere from 20 to 80 students next year, depending on how many needy students earn admission.
To pay for the new scholarships, BU halved its Boston Scholars program, which typically awarded full-tuition merit scholarships to about 50 Boston public high school graduates a year. But Colin Riley, a university spokesman, says BU expects it will need an addition $1 million or more on top of that savings to pay for the new scholarships. BU does not guarantee to meet the financial need of students from outside Boston.
BU is going ahead with the program even though it has had to freeze new hiring and construction. The freeze is a "pre-emptive move" to conserve cash because of the current financial turmoil, Riley says. "We are not in any kind of financial difficulty" right now, he says, adding that the money for the new scholarship program has already been set aside.
Of course, Vanderbilt and BU will award scholarships only to cover what they estimate a student needs based on extensive examinations of his or her family's finances. And many parents feel that schools have painfully high expectations of what they can truly afford. Still, in these financially frightening times, any improvement in financial aid is welcome.