Administration responds to Princeton

Princeton's recent announcement that it would replace all student loans with university grants stirred speculation among students and faculty as to whether Yale would respond in kind. It was no surprise, then, that financial aid was the most anticipated issue on the agenda of last weekend's meeting of the Yale Corporation. At a press briefing on Wed., Feb. 14, University President Richard Levin, GRD '74, disclosed the business conducted at the meeting. Those hoping for a revelation in keeping with the spirit of Valentine's Day excitement had good cause for disappointment; the Corporation made no formal resolution apart from a "planned non-response" to Princeton's initiative.

ANDREW HEI/YH Yale President Richard Levin, GRD '74, stated on Wed., Feb. 14 that Yale will need to react to Princeton's recent financial aid maneuvers.

Levin said that he was "heartened that there has been a lot of campus discussion about this." He made it clear, however, that Yale would not be rushed into any decision, and highlighted the need to deal with the issue of financial aid policy responsibly. "We need to think about this. A two-to-three week response time is inadequate, and we feel this is an issue better dealt with next year. To match Princeton would be substantially costly. Is this really the right thing to do and the most creative and appropriate way to meet students' needs?"

Levin claimed a strong philosophical inclination for Yale to maintain its traditional stance toward financial aid. "Princeton has made a very bold move that is in some sense philosophically a departure from the fundamental theory upon which financial aid has rested in the past years, that students should co-invest in their education," he explained. "Yale's financial aid policy has historically been geared toward the sharing of the burden among the institution, the students' families, and the students themselves."

Ernst Huff, associate vice president of Student Financial and Administrative Services, elaborated on the nature of this philosophy. "The student ultimately is the primary beneficiary of the education they receive," he said. "First, they made the independent decision to attend their university of choice. Second, presumably after they graduate they are going to have some benefit, financially, in terms of career opportunities, or personally, in terms of intellectual assets. The primary beneficiary should share in the expense."

Levin also noted that the timing of Princeton's move allowed for deliberation and a delayed treatment of the issue. "I'd be very surprised if I saw action this year because all applications are in and the decisions are coming soon."

The Corporation's decision, rather than quelling campus debate, will likely shift the focus of discussion to how Yale will respond next year. That speculation is already underway in some quarters. "The big question is certainly one of recruitment," Caesar Storlazzi, associate director of Financial Aid, said. "Does Yale have to adopt a similar policy to maintain the quality of students? The question will be whether Princeton gets a lot more applications next year. Yale will have to consider very carefully what it needs to do while still staying within its philosophy of partnership. Tons of projection studies will no doubt be conducted. If Yale feels there will be a threat, it will obviously react. For right now, the possibility is very slim, but this does not mean that it's off the table."

What seems certain is that any change in financial aid policy implemented next year will stay within Yale's philosophical framework. Contrary to some predictions, Levin also said that Yale will not consider altering its spending rule, the formula which determines the proportion of Yale's endowment that can be spent annually. "There is no possibility of changing the spending formula," Levin said. "The formula is conservative, but on the other hand it is well cushioned. We don't want to be in a kind of boom bust cycle. We are cautiously adding new programs. We have provided for significant improvement in one dimension of financial aid, extending need-based aid to international students, and we are making improvements in the arts and sciences. These are substantial investments."

Yale is certainly not alone in having to deal with this issue. Addressing the national implications of Princeton's decision, and the prospect of less-endowed universities responding with selective packaging to compete for the best students, Levin said, "We are concerned with the possibility that the principle of need-based aid may erode. Some of the state universities have already implemented merit-based aid. This hasn't had a major impact on Yale at this point, but it could be a concern in the long run."

Storlazzi said, "The worry is that if each institution tries to match what Princeton did, then Princeton will lose its edge and may feel compelled to make further financial concessions, resulting in a spiraling effect."

Against this bleak view of the potential consequence of Princeton's decision on the financial landscape of higher education, Yale's decision to resist jumping the gun and to take cautious steps in line with Old Blue financial tradition may be the best move after all.

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