Yale aid increase leaves U. lagging

In a move that will again force Penn to play catch-up with its Ivy League peers, Yale University announced last week a 28 percent raise in its financial aid budget, most of which will be composed of increased grants.

The $7.5 million increase will lower what students are expected to contribute through loans and work-study jobs.

Yale's announcement comes on the heels of similar financial aid increases last year, first at Princeton University and then at Harvard University. Princeton completely eliminated all undergraduate loans last January, while Harvard upped aid packages to all qualified students by $2,000.

"The changes are costly, but they will reduce the burden on low and middle-income families and Yale to continue to attract the most outstanding students in the nation and the world," Yale College Dean Richard Brodhead said in a statement.

The new plan, which will go into effect for the 2002 school year, reduces a student's expected contribution by $13,780 over four years and increases the campus minimum wage from $7 to $9. However, unlike Princeton, Yale did not completely eliminate loans.

But Penn will likely not be able to keep up with the Yale plan given the smaller size of its endowment, which is used to fund financial aid. Administrators did say, however, that Penn would try to compete on an individual basis, and that the University is looking at its own financial aid policies.

"We can compete on a case-by-case basis, but it would be difficult for us to easily afford a much more expensive financial aid program," Dean of Admissions Lee Stetson said. "But we will continue to be responsive to offers at competing institutions and try to match them along the way."

And Director of Financial Aid Bill Schilling said that Penn is "looking at some" alternatives.

In order for Penn to match Yale's $7.5 million increase, it would have to spend $12-15 million per year, due to Yale's smaller size.

The Ivy trio has been able to radically change its financial aid partially as a result of their respectively healthy endowments, starting a trend that Penn has not yet demonstrated it can follow.

All three schools' endowments are larger than Penn's $3 billion endowment, with Harvard leading at $19 billion. The endowments of Harvard, Princeton and Yale all skyrocketed in Fiscal Year 2000 from heavy investment in then-burgeoning technology stocks; Penn's endowment, without similar investments, actually went down 1.8 percent during the same time period.

"Those three have endowments that we don't have," Schilling said. "Those three are tough to compete with."

Yale's recent decision is seen by some as an attempt to catch up to Harvard and Princeton.

"I think it's an attempt by Yale to compete with the other more aggressive Ivy League institutions and it just raises the bar for us all and makes it more challenging to compete," Stetson said.

However, both Schilling and Stetson downplayed the impact that the Yale decision would have on Penn.

"I don't expect this decision to change the yield," Schilling said. "I don't think we see that the Harvard and Princeton decisions have had a huge impact on Penn. In fact, our history has shown that we have shown an increased yield."

Despite Penn's inability to compete broadly, Stetson added that he believed that Penn would be able to match the other schools on an individual basis.

The $7.5 million Yale increase is composed of a $6.3 million rise in grants and an additional $1.2 million to recalculate the family expected contribution to a student's education.

Over the summer, Yale joined 27 other colleges and universities, including Penn, to determine a common procedure which schools will use in determining a family's need, in the hopes that the new system would preserve need-based aid.

Harvard and Princeton, however, declined to join, saying that the guidelines would hinder their ability to give aid.

The $7.5 million increase brings Yale's annual total aid to $34 million. Penn's total aid is $50 million, but Penn's undergraduate enrollment is almost double Yale's.

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