Economy lifting college prospects of the well-heeled

By Peter Schworm, Globe Staff  |  February 24, 2009

For students applying to college, it's a very good year to have strong grades and deep pockets. Especially the latter.

As colleges and universities provide more financial aid to families hit by the recession, they are also more likely to give wealthier students preference in admissions and scholarships to help offset that extra cost, according to college administrators and consultants.

"The full-pay kid this year is going to be at a premium," said Frank Vellaccio, senior vice president at the College of the Holy Cross in Worcester, which does not consider finances in admissions decisions. "Those students are going to have a lot more choices now and will get into schools that they might not have normally."

To widely varying degrees, colleges consider students' financial means when they assemble incoming classes. But the dismal economy and problems in the credit market have complicated these calculations and renewed questions about economic disparities on campuses.

Outside the wealthiest sliver of colleges, whose so called need-blind practices are not expected to change substantially, most institutions are struggling to balance the growing demand for financial aid with their budget constraints. In effect, they need more students who do not need financial aid to subsidize the rising need of those who do.

That puts wealthier students at an advantage at smaller private institutions that rely heavily on tuition income. Not only are they more likely to be accepted, they also stand to receive more scholarships to sweeten the offer.

Colleges with modest endowments, in particular, acknowledge they must base some admission and scholarship decisions on students' ability to pay, especially in the current downturn.

"If students are going to need a huge amount of money, that's not a practical expense for us," said Michele Kosboth, director of student financial planning at Lasell College in Newton, which charges $23,000 in tuition. "We're not going to be able to help them as much as they need."

Morton Schapiro, president of Williams College in Williamstown and an economist who specializes in higher education finance, said there has "never been a better time to be a smart, rich kid. And at some schools, you don't have to be as smart as you did before. That's what happens in a recession."

Schapiro referred not to his own institution, a top-tier private school that meets the full financial need of its students, but to the vast majority of schools that must base admissions decisions - at least in part - on financial means.

He predicted that colleges would find ways to boost tuition revenue. Some will require students to borrow more money and pay more of their summer and work-study earnings, for example, and others will ask parents to contribute more.

More ominous for working- and middle-class students, many colleges will give more weight to families' ability to pay when making admissions decisions, educators say.

"They are going to turn the dial more in that direction," Schapiro said.

That step gives colleges, which have been forced to lay off workers, slash budgets, and delay construction, some badly needed financial flexibility and allows them to protect or expand financial aid.

Richard Doherty, president of the Association of Independent Colleges and Universities in Massachusetts, said that nearly all of the state's private colleges are maintaining or increasing financial aid, allowing some low-income students to pay the same at a private college that they would at a public school.

For example, Suffolk University is expanding a program that forgives loans for students who graduate, and many colleges, including Holy Cross, have created contingency funds to handle more aid requests.

Some, such as Newbury College in Boston, are marketing no-interest payment plans so families don't have to pay the full cost up front, and many are urging alumni to earmark donations toward student aid.

But a good portion of this aid goes to wealthier students who can pay more tuition, specialists say. Better-off students also tend to have higher standardized test scores, and therefore serve the dual purpose of boosting the college's reputation and its finances, critics of the practice say.

A survey by the National Association for College Admission Counseling released this fall found that 43 percent of college financial aid was distributed on factors other than financial need, such as academic achievement, athletic ability, and having a parental tie to the school.

"For every student that needs more financial aid because their parent lost their job, colleges need to admit someone who can pay the full amount," said Jack Maguire, a higher education consultant in Concord.

Colleges are apt to cherry-pick more affluent students off waitlists, Maguire and other specialists say, when they have a better sense of students' financial need vs. their own budgets.

"Colleges will reach the point where they've exhausted their financial aid," Maguire said. "At that point, they are disproportionately going to go with students with little or no need."

Some colleges are strategically offering well-to-do students partial scholarships in the hopes of outbidding the competition.

"We've lost some really top students to elite schools, and we realized we needed to boost merit awards," said Silvio Vazquez, vice president for enrollment at Gordon College, a 1,600-student liberal arts college in Wenham, where tuition is $26,132. "Whether you call it merit or need, it's all institutional aid."

Federal stimulus legislation provides provisions aimed at bringing college costs within reach, including educational tax credits and a hefty expansion of the federal Pell Grant program for low-income students.

Still, the college system hinges on students who can afford full tuition costs. Those payments enable schools to discount costs for lower- and middle-income students by as much as 40 percent, educators say.

At a college like Holy Cross, for example, which charges about $50,000 a year, that would mean a savings of $20,000 for some students on financial aid.

"Without these students, no one goes to college," Vellaccio said. "You need the paying customers." 

Stimulus 'nay' carries risk for some House Republicans

US Representative David G. Reichert talked with Jane Milhans at the Lincoln Day Breakfast last Saturday in Tacoma, Wash. (Jim Bryant/ Associated Press)

 

By Sasha Issenberg, Globe Staff  |  February 24, 2009

TACOMA, Wash. - US Representative David G. Reichert's first mention that he "voted no twice on the stimulus package" earned him a standing ovation that echoed through the Elks Club auditorium. A declaration that "we should be angry" provoked screams of, "We are!"

Not all of his Seattle-area constituents thrum with such ready outrage at the $787 billion collection of new spending and tax cuts President Obama signed into law a week ago. A day earlier, Reichert met a couple forced to close a 25-year old millwork business and lay off 170 workers. Together they went through the stimulus bill to see if it offered any aid. Often these days, Reichert has one staff member uncovering new outrages in the 1,071-page legislation as another pores over it hoping to find help for besieged constituents.

When Obama addresses a joint session of Congress in a televised speech tonight to outline his budget priorities and policy agenda, he will face 176 House Republicans who voted unanimously against his stimulus bill. Fewer than one dozen share Reichert's predicament: He represents a district carried by Obama in November, in this case by 15 percentage points.

He is the type of endangered Republican most sought by Obama's gestures of bipartisan outreach, but also the type whom the new president's successes would be most likely to dislodge from office.

Yesterday, the Democratic Congressional Campaign Committee announced plans to target him and 11 other House Republicans facing reelection next year with radio ads and phone calls informing voters that they "voted against President Obama's economic recovery plan." Since first winning office in 2004, Reichert has been reelected in tough races because his sensibility - an even-tempered, pragmatic centrist - fits the prosperous Seattle suburbs he represents.

"I wish Democrats would spend a lot of money in the Eighth telling people Dave Reichert voted against the stimulus. But people also want to hear you're also not a 'no' on everything," said Luke Esser, the Washington state Republican chairman. "People would not want to see - in a district like the Eighth - Dave Reichert to be reflexively against everything just because Barack Obama is for it."

Reichert believes voters have grown more skeptical of the stimulus as they have learned more about it. On the day of the vote, as the phones in his Capitol Hill office jangled with constituent calls, Reichert started answering them himself: Not one of the dozen callers asked him to support the bill. (Aides told him the total tally ran 10-to-1 against the bill.) Last week, when he held a "tele-town hall," more than 5,000 people joined the conference call, more than 10 times the usual, and he could not find a stimulus proponent to engage.

"People are beginning to realize the impact of the amount of spending," said Reichert. "This figure is hard for people to understand."

Obama acknowledged the criticism, but told governors at the White House yesterday, "We agree on 90 percent of the stuff, and we're spending all our time on television arguing about 1, 2, 3 percent of the spending."

National polls have shown that voters retain confidence in Obama, even as their doubts have grown about whether the stimulus plan will have its intended effect. An average calculated by Pollster.com shows that just more than 60 percent of Americans approve of the job Obama is doing, nearly identical to the number that disapprove of Congress.

"If that goes forward, it will probably be good for Republicans that Obama is not on the ballot in 2010," Esser said. "Republican and Democrat candidates will be judged on their qualities."

Reichert takes pride in being an ideological outlier. He has happily met with antiwar activists Cindy Sheehan and with MoveOn.org leaders and boasts of voting against the Republican Party line on stem-cell research, oil-drilling in the Alaska wilderness, and intervention in the Terri Schiavo right-to-die case.

"People put too much emphasis on all that junk," Reichert said of partisan allegiances. "The people that voted for me were Obama voters. They wanted change and a congressman that was independent."

Like many Republicans, Reichert offers warnings about the ruinous potential of the stimulus plan, saying that it will do little to boost the economy and leave his grandchildren - pointing them out in the breakfast crowd to make his point - with massive debt.

"I think you'll start seeing by late summer" voters souring on the stimulus plan, said Tom Campbell, a Republican state representative who has already begun a campaign to unseat Democrat Adam Smith in the congressional district next to Reichert's.

"I don't think the Obama tide is as awesome and big as it may appear."

But in the short term, Reichert acknowledges that the stimulus bill will deliver tangible good news to his constituents. By April, they are to start seeing the bill's tax cuts reflected in slightly larger paychecks. Within months, there may be job listings for construction projects, perhaps for the high-speed rail corridor - one of 10 nationwide to share in $8 billion in new funding - that runs along Reichert's district. By the end of the year, local companies in this tech-centric area may be reaching for some of the money to improve the digital infrastructure of the healthcare industry.

"I feel a responsibility at this point to make this still work," Reichert said. "It's passed, it's into law. Like a cop, there may be a law I don't like, but it's my duty to enforce it."

Sasha Issenberg can be reached at This e-mail address is being protected from spam bots, you need JavaScript enabled to view it .