Harvard Law School Makes Online Zero-L Course Free for All U.S. Law Schools Due to Coronavirus


For Kennedy School Fellows, Epstein-Linked Donors Present a Moral Dilemma


Tenants Grapple with High Rents and Local Turnover at Asana-Owned Properties


In April, Theft Surged as Cambridge Residents Stayed at Home


The History of Harvard's Commencement, Explained


Financial Aid

By Joe Mathews

Raj Yerasi '95 wants to go into business. And he considers The Wharton School at the University of Pennsylvania to be the best undergraduate business school in the country.

But any intention that the first-year student from Rowland Heights, Calif. might have had of attending Penn evaporated last April when he saw his financial aid offers.

Stanford University expected his family to contribute $3500 of what it would have cost for him to attend. Harvard wanted $5000. But Penn's offer would have left Yerasi's family with a tuition bill of more than $8000.

"[Stanford and Harvard] were the two best aid packages, so those are the only two I visited," said Yerasi. "Penn was ruled out off the bat."

Two years ago, a student like Yerasi might have gone to Penn. Now, after the May settlement of an antitrust suit filed by the Department of Justice, Yerasi and some of his classmates say they are seeing such wide discrepancies in financial aid offers that their college choices are virtually made for them.

According to admissions officials at Harvard and other schools, the impact such discrepancies have on financial aid budgets, coupled with the recession, threaten not only the decades-old policies of need-blind admissions and need-based financial aid but also racial and economic diversity on college campuses everywhere.

Two years ago, the Justice Department began its investigation of the Overlap Group, a now-defunct organization of 23 colleges which included all the Ivy League institutions as well as private colleges like Amherst, Williams, and Bowdoin. The group met annually to decide on financial aid offers to students accepted by more than one of the member institutions.

According to a report in The Chronicle of Higher Education, former attorney general Richard Thornburgh, who was defeated last month in his bid for a Pennsylvania seat in the U.S. Senate, said the group denies students "the right to compare prices and discounts among schools, just as they would in shopping for any other service."

The investigation concluded last May when the Ivy League members of Overlap, under pressure from the Justice Department, signed an agreement known as "the consent decree." The decree imposed a gag rule on financial aid offices, effectively ending the practice of jointly deciding aid awards.

"Each school can agree to distribute need-based scholarships unilaterally, but it can't decide to do that in consort with the group," said James Miller, director of financial aid.

In the era of Overlap, financial aid offers rarely differed by more than a few hundred dollars, aid officers say. But now both students and high school counselors say that students entering college this fall, the first group to be affected by the decree, have seen aid offers that regularly differ by thousands of dollars.

High school college counselors say the alarm sounded last May when high school seniors saw their financial aid offers.

Carl W. Bewig, director of college counseling at Phillips Andover Academy, said that he saw discrepancies of as much as $8000 in the aid awards of students he advised.

"To me, it represented a falling apart of the need-based financial aid program," he said.

Counselors at public high schools, even those with affluent student bodies, say that the discrepancies have affected college decision-making.

"Families will be thinking about their indebtedness at the end of the four years, and that will affect decision-making," said Charles V. Khoury, director of guidance at the only high school in Ridgewood, a New Jersey suburb.

According to financial aid officers, the families most affected by the discrepancies are upper middle income families, which pose the greatest problems to officers trying to determine the right aid package.

"It's very much like the admissions process--every case is reviewed independently," said Miller. "Still, we have more than 100 families making more than $100,000 a year on financial aid."

"If you're in the low income group, you'll pretty much get a free ride," said Georgia Arrington-Booker, chair of the guidance department at Woodrow Wilson Senior High School in Washington D.C. "But [the colleges] have always had a problem with packaging the middle-income students."

The change in financial aid, according to counselors, is already changing the way they advise students.

Booker, who has held her position at Wilson for 20 years, says that before the consent decree, she advised students to apply to only one Ivy League school. Students applying to more than one school, she reasoned, would get lower aid awards.

"I suspect that before [the consent decree], the financial aid offer would be that of the college with the lowest financial aid budget," said Booker. "Now that the colleges aren't getting together, it's okay for students to apply to more than one Ivy."

In the 30 years that have passed since the principle of equal access became doctrine at colleges and universities all over the country, admissions officers, while courting prospective students, have fervently pitched the company line: choosing where to attend college should not be a financial decision.

"The financial aid program was that when students chose colleges at the end that would be based on the intrinsic merits of the college, and that cost would not be a primary consideration," said Bewig.

But the consent decree and the resulting discrepancies, according to counselors and students, has changed that.

"I'm finding more and more children are going to opt for schools where they get some help," said Booker.

And Khoury says that he sees aid as an increasingly important factor in decision-making. "I think it's a factor of the decision that's going to play an increasing role, but right now it's still a secondary factor," said Khoury.

"If it ever crept into where 'I'm going to make a decision based on my financial aid package'--and we may get there if costs continue to rise--that's bad," said Khoury.

Shopping Around

But high school counselors and students also report a phenomenon that the discrepancies have created--students negotiating their financial aid offers.

Bewig tells the story of one senior student who was heavily recruited for her basketball skills. The student had a choice between two Ivy League schools, neither of which was Harvard.

"There was a $4000 discrepancy and the better award was from the school she was less interested in," said Bewig. "She called [the school with the lower offer], and almost instantaneously they matched the award."

While such negotiating may lead to higher aid offers, counselors say it can also make a complex situation more confusing.

"When kids have to get on the phone and change their own financial aid, that's a situation that's not good for kids," Khoury said.

And, although he says that Harvard hears and often grants appeals of financial aid offers, director of financial aid James Miller denies that Harvard negotiates its financial aid offers.

"We have a responsibility not to negotiate," said Miller. "To the best of our ability, we don't say we're going to match Yale's offer or Princeton's offer."

But, if an informal survey of a dozen Harvard students on financial aid can be believed, students do negotiate with the University's financial aid office.

Six of the students said they had gotten their financial aid offers changed by bargaining with at least one school's financial aid office, and two said they had successfully negotiated with Harvard's office.

And those negotiations can degenerate into bidding wars in which students play financial aid offices off against each other.

Marvin A. Coote '95, of Ridgefield Park, NJ, said that his college decision boiled down to Harvard, Yale and Princeton.

"They all gave me the same package, except Princeton," said Coote. As a New Jersey resident, the first-year student received a Kean Scholarship, which removed his summer work requirement.

Coote says his father then went to work on using Princeton's offer against Harvard.

"My dad was able to get rid of my summer work [requirement] with Harvard," said Coote. "He increased my loan."

Even more disturbing than questionable "negotiating" practices, say the high school counselors, is that the discrepancies in aid offers may portend the end of need-based financial aid, as colleges begin to use financial aid as a recruiting tool.

"It's very possible that colleges are going to use financial aid to get the people they want," said Bewig. "I think the colleges are going to start to move to merit scholarships."

Some colleges have already deserted their need-blind policies. According to Donald C. Wolfe, acting director of financial aid at Brown, the Providence college no longer practices needblind admissions.

Still, amid predictions of gloom and doom at other colleges, Harvard set a new record last spring by awarding $29.5 million in grants and $53 million in total financial aid, according to Miller.

But Miller and financial aid officers say that colleges around the country, perhaps even Harvard, will have to abandon need-blind admissions and need-based aid in favor of a merit-based system. And the consent decree may accelerate the change.

"I think that's what's going to happen and what I see happening nationally," said Miller. "The inability to talk to each other is an accelerant in this falling apart of need-blind admissions."

A Real Threat to Diversity

How long can Harvard hold out? There is currently no cap on the financial aid budget, but the Faculty of Arts and Sciences has a deficit of more than $10 million, and former Dean of the Faculty Henry Rosovsky imposed a six percent across-the-board cut in the operating budget last year. If other Ivy League schools move to a merit-based system and instigate a bidding war for students, Harvard could feel pressure to heed the call to arms.

"It's going to be hard to know how schools are going to react. We certainly can't bury our heads in the sand," said Miller. "On the other hand, we feel need-blind admissions and need-based financial aid is the best way to build a quality student body."

And, if need-blind admissions go, the big loser could be diversity.

"I think there's a real threat to diversity in all its forms," said Miller. "There's a real threat that diversity is going to disappear in some parts of higher education."

There are already hints that the consent decree may be taking its toll.

"Our middle income students, especially middle income minorities, didn't choose to go to the Ivies [this past year]," said Booker.

The irony of the situation, Miller says, is that, at a time when it might be in students' interest for aid offices to communicate and find a solution to the mounting financial aid crisis, he and his colleagues find their hands tied.

"We had one wonderful phone call," said Miller. "The mother of a student who was looking at wildly different offers called and said, 'Why don't you folks all get together and talk about this?'"

Want to keep up with breaking news? Subscribe to our email newsletter.