Since taking office, University President Amy Gutmann has passionately declared her support for improving Penn's undergraduate financial aid resources. This ambitious goal -- which is meant to increase accessibility of a Penn education -- can only be tackled by significantly increasing the University's financial aid endowment.
Though the University will probably double the current $233.8 million financial aid pool within a six-year period, Penn will not be able to compete with Harvard and Princeton universities' financial aid resources in the foreseeable future.
Nevertheless, University officials are right to be confident in Gutmann's ability to invigorate financial aid, assuming that she closely follows the agenda she has highlighted.
"She's so passionate about education as the great equalizer," said Craig Carnaroli, University treasurer and director of financial affairs. "She can be out there really trumpeting the horn, and I think people will respond to it."
Yet no characteristic of the University's new leader can fully trump the implications of Penn's current financial standing.
"The vision and enthusiasm are there. We have just started from so far behind that there's a long way to go to catch up," Director of Student Financial Services William Schilling said, in reference to Penn's limited ability to fund undergraduate financial aid from endowment rather than siphon money away from the University's unrestricted revenue.
Gutmann recognizes Penn's deficit in this area, and has been pledging her commitment to the issue frequently since arriving at Penn in July.
"You know what they say about real estate -- "location, location, location,'" she said, adding that for her, it is "financial aid, financial aid, financial aid."
"What really matters at Penn ... is that every student, middle-income student, lower-income student has access to this place."
Yet this lofty ideology requires a financial aid endowment decidedly greater than Penn's own.
The Department of Development and Alumni Relations succeeded in securing enough donors to double Penn's endowment from 1998 to 2004, but Penn is still ranked last among its Ivy League peers in terms of endowment-funded financial aid. Currently, Penn funds 14 percent of its undergraduate financial aid from the endowment, while the corresponding figure at Princeton is 98 percent.
Significantly increasing Penn's endowment is "sort of essential to our own competitiveness," Carnaroli said. "It's not so much a question of if we can do it, but when we're going to get it done."
Although Penn policy states that the University meets the financial needs of all its students, the state of the endowment means that the packages offered by Student Financial Services have a higher loan-to-grant ratio than those of peer schools.
"I'm sure we're losing some students" because of our financial aid packages, Schilling said. With the ability to provide more monetary support to students, "it may be that you're going to be able to attract some students that you wouldn't attract otherwise."
But before Penn can attract the top students, the administration must start attracting top donors.
Appreciation of Penn's investments in the stock market can improve the University's fiscal state, but "the best way to [increase financial aid] is to add gifts to the endowment," according to Executive Director of Administrative Affairs Bonnie Gibson. "I don't think that we've exhausted the market for undergraduate financial aid."
Though Penn does seem to have room to grow before it reaches its peak endowment level, it is extremely unlikely that the University would be able to fund undergraduate financial aid from endowment at levels comparable to Princeton's.
"I don't think that we're going to be in a position [similar to Princeton's] short of Microsoft donating all its money to Penn," Carnaroli said, demonstrating just how unattainable Princeton's financial program is for a school with an endowment like Penn's.
"We wouldn't be talking about doubling -- we'd be talking about quintupling," or going "six-, seven- or eightfold," Gibson said.
Most administrators agree that, while doubling the endowment is probable, Penn will likely never be at the top of the pack on the financial aid playing field.
Penn's leading financial officials are aware of this fact, and are therefore concentrating on more realistic options.
"Rather than be overwhelmed by the magnitude of that number [that we would need to raise to catch up], we should say, "What could we continue to do to build as close to that goal as we can?'" Carnaroli said.
Gutmann's visible commitment to undergraduate financial aid might be enough to give Penn the jump start it needs to turn the momentum of the late '90s into a trend.
"Increasing the awareness for need" will bring in the greatest amount of contributions, said Joanne Hanna, director of development for undergraduate financial aid.
Penn experiences the greatest growth in its endowment when "there is a real emphasis put on [undergraduate financial aid] from the leadership of the University," according to Hanna.
New development initiatives, such as fund-matching programs, could also affect donor rates.
"It's a function of what creative things we can" incorporate into the donation process, Carnaroli said.
Improving financial aid is also a direct function of the significance that Gutmann places on the issue. Though former President Judith Rodin's era saw a huge jump in Penn's endowment, Gutmann's fresh energy and deep connection to the issue of financial aid may make her even more successful than her predecessor in this realm.
"Her own commitment to student access has to do with her own personal experiences ... and I think that that colors your outlook on what your priorities are going to be," Hanna said.
Most administrators think that, although her background at the enormously endowed Princeton will neither help nor hurt Gutmann, her intrinsic values will affect Penn's performance on the financial aid front.
And if donors do respond to Gutmann, the benefits will extend far beyond those students receiving financial aid packages.
"If we didn't have to spend as much of our unrestricted dollars on undergraduate financial aid, ... we'd be able to help the president and provost meet the requests that they get for improving programs and services," Gibson said.
This article appeared as part of the "Amy Gutmann: Changing of the Guard" series.
