Financial aid: doing well by doing good
September 2015 | OnTheRecord@UNC
From the New York Times Magazine Education Issue. September 13, 2015.
By Eric Johnson
Assistant Director for Policy Analysis & Communications | Office of Scholarships & Student Aid
The economics of higher education are strange and arcane, but Adam Davidson does yeoman’s work untangling the mess in this weekend’s New York Times Magazine. He explains how different colleges and universities try to balance tuition, financial aid, and broader institutional goals.
College occupies an odd niche in our economy, existing as both a public good and a private investment. That’s especially true at competitive public universities like Carolina, where the cost of an education is heavily subsidized by state taxpayers, but tuition can still be a challenge for many families.
“If colleges and universities were just another consumer good, like cars or clothes, we wouldn’t worry so much about their cost,” Davidson writes. “But higher education is both an individual and a public concern.”
At Carolina, we take that public concern seriously. As state and federal investments in higher education have stalled, shifting more of the burden to individual families, UNC has made a very conscious effort to maintain access for all qualified students, regardless of income.
In blunt terms, that has meant both limiting tuition increases and making sure the shift toward individual investment affects those families most able to bear the cost. Like many of the country’s top-tier private universities, we spend an enormous amount of our own funds on financial aid, effectively discounting the individual cost for low- and middle-income families so that Carolina remains affordable for students at all income levels.
The success of that policy is reflected in the economic diversity of our student body and the consistently low debt burden for our graduates. Even as the Great Recession created a sharp increase in economic hardship — 37 percent of UNC students had financial need in 2009; 43 percent do today — student borrowing has remained flat. Only 40 percent of UNC undergraduates take out loans, compared with 70 percent nationally, and the average debt at graduation is just over $18K, compared with more than $28K nationally.
And that’s with a student body that is among the most economically diverse of major research universities. Almost 20 percent of undergraduates are the first in their families to attend college, and 22 percent are eligible for federal Pell Grants. Those numbers, along with some of the highest graduation rates in the country, led the New York Times to name Carolina the third most economically diverse top college in the nation, and the first among public universities.
That kind of commitment is expensive. Carolina spends tens of millions annually on grants and scholarships for needy students, money that could have been spent on other programs or projects. We choose to make affordability a priority, both because we care about the public mission of the place and because it’s an investment in quality.
As Davidson points out, top-tier private schools like Harvard and Williams and Stanford have aid policies similar to UNC’s not solely out of a sense of fairness or public good, but because it brings in the best talent. “If an elite school… insisted on admitting only students willing to pay the full freight, they would soon find they weren’t so elite,” he writes.
Accomplished students are drawn “by the prospect of studying with the best students and teachers.” Need-blind admissions — assessing applicants only on talent and accomplishment, not on their ability to pay — enhances the quality of the student body, and therefore the quality of the whole university.
“Most of the top-tier private schools say they won’t factor in an applicant’s ability to pay when considering admission and promise that everyone admitted will be given the financial aid necessary to attend,” Davidson points out. UNC is the rare public institution able to make a similar promise, and that’s a huge part of what keeps us among the best universities in the country.
Financial aid is not only a public trust at Carolina; it’s also a competitive advantage.
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Originally published at ontherecord.unc.edu.