Harvard, with the largest endowment of any university in the world, used about a third of endowment funding towards its operating costs in 2008. In March 2009, however, the university announced that it would diminish its dependence on the endowment by reducing the amount allocated to the operating budget to only 8%. This comes after a 22% loss in the endowment's nearly $37 billion value. Harvard has begun cutting jobs and budgets to make up for this loss as well as past reliance on the endowment for operating costs.
Harvard, however, is one of the more fortunate universities. President Faust has stood by her commitment to continue to offer financial aid as a priority despite the economic downturn, with one of the best programs in the country - even offering a full-ride for students whose families make under $60,000 in annual salary. More important, Harvard will continue its need-blind policy in evaluating applicants for admissions - that is, one's ability to pay tuition will not be taken into account when one's application is reviewed.A recent New York Times article noted that many universities are now looking more favorably on applicants of wealthier means - even Morton Owen Schapiro, President of Williams College, remarked, "There’s going to be a cascading of talented lower-income kids down the social hierarchy of American higher education, and some cascading up of affluent kids." Colleges are even accepting transfer students or wait-listed students who they need not adhere to their usual policy of need-blind evaluation when reviewing. This creates a worrisome trend, one that universities such as Harvard may be isolated from in having large endowments as security nets, but others without such funding may continue to turn to.
The smaller-than-average tuition hike is certainly a good sign, but the economic downturn has left universities searching for ways to continue to fund themselves, especially after large endowment losses. Universities evaluating wealth as a factor of admissions is a new strategy which they will use to meet budgets while ostentatiously and publicly flaunting financial aid as a top priority. Universities cannot seek to solve their financial problems at the expense of those most financially burdened. Low-income students should not "cascade down the social hierarchy" solely because of the genetic lottery or socioeconomic situation which they were born into. We cannot defeat the age-old socioeconomic income gap alone - universities have to come together to attract the best talent and diversity regardless of financial need so that income does not determine educational opportunity.
Articles for Reference:
http://latimesblogs.latimes.com/money_co/2009/06/college-tuition-costs-for-the-new-school-year-will-rise-an-average-of-43-the-smallest-increase-in-at-least-37-years-the-n.html
http://online.wsj.com/article/SB122832139322576023.html
http://www.boston.com/news/education/higher/articles/2009/03/20/harvard_to_reduce_dependence_on_drawing_from_endowment/
http://www.reuters.com/article/domesticNews/idUSTRE55M66320090623
http://www.collegiatetimes.com/stories/9664
http://www.nytimes.com/2009/03/31/education/31college.html
Kevin Prior
INeedAPencil Summer Associate
Harvard College 2011
