The University increased its financial aid budget 21 percent for this fiscal year, though that may fall slightly short of the actual costs of providing aid.
The financial aid budget for this year is now $69 million - up from $56.9 million last year, said Susan Howitt, associate vice president for budget and planning. She said the increase was due mainly to the financial aid policy change.
But the actual financial aid costs for this year are expected to be around $70.5 million, said Director of Financial Aid James Tilton. The figure is based on students' current financial aid packages, though it could change as the year progresses because the University continues to meet demonstrated need throughout the year, he said.
Though the difference between the budget and the expected costs is small, any additional increases in the cost of financial aid this year will be drawn from a reserve pool of several million dollars that has been allocated to cover any unexpected changes in operating costs, Howitt said.
"We think we have enough cushion built in to be able to cover everything," she said.
"This year we've been talking to families about their options in case something comes up," Tilton said.
As a result of the recent economic troubles, there have been more families approaching his office with concerns about their finances for the rest of the year, Tilton said. But, he said, there has not yet been an increase over last year in the number of families that have requested additional aid.
"I think families are concerned, but I don't think families are panicking," he said.
The Corporation approved a new financial aid policy last February that eliminated the family contribution for students whose families earn under $60,000 per year and did away with loans for those who earn less than $100,000 a year. The new plan also reduced the proportion of aid that all students receive in loans.
Despite the University's increased expenditure on financial aid, not all students have noticed a drop in their personal contributions to their tuition.
"It's been about the same since I was a freshman," said Alice Alpert '09. She said that although her younger sister has also just started college - a factor that usually influences aid payments - her family contribution has not decreased.
"The family contribution was equivalent to what they usually gave me in loans," said Aubrey Cann '10, who added that, effectively, she's paying the same amount that she was last year.
Nolan Broussard '11 also said that his financial aid package has not changed from last year.
The Corporation and the University Resources Committee made the decision this year to draw 24 percent more from the University's endowment than it has in the past to cover operating costs, of which financial aid usually draws a large portion, Howitt said. Last year, the University drew $104 million from the endowment, but this year it will take $130 million.
The URC's recommendation rests on the fact that, until the recent financial crisis, strong financial markets had contributed to solid growth in the University's endowment - about 14 percent per year for the past 10 years, Howitt said.
The URC will begin discussion of next year's budget over the next month, when it will examine the issue of financial aid and determine how the economic climate will affect next year's budget.
