Rice modifies financial aid

By Margeux Clemmons     1/8/09 6:00pm

Rice Student Financial Services is offering its own bailout in these difficult economic times, not for banks or auto-makers but for incoming freshmen and their families struggling to fund four years of tuition. The changes to financial aid include an increased annual income threshold from $60,000 to $80,000 for families whose need-based aid will not require loans, and a decrease of the maximum amount of loans a student must contribute to their financial aid package from $14,500 to $10,000.

Dean of Undergraduates Robin Forman said the changes are in part to keep Rice diverse.

"Rice has always been a need-blind institution, and it's part of who we are," he said. "We are constantly reevaluating our financial aid policies to make sure that Rice remains affordable and accessible to all."

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Student Financial Services read the student-loan freezes of early last year, which prohibited many students from taking out loans from private lenders, as indicators that Rice's policies would require modification, although the timing of the changes is partially due to recent downturns in the economy. The changes will take effect next semester, beginning with the 2009 incoming freshman class, and will only apply to undergraduate students, Director of Student Financial Services Anne Walker said.

Typically, financial aid packages at Rice include grants, scholarships, and loans. With the new changes, the no-loan threshold expansion will increase the number of students whose families' financial aid package will not include loans.

Just under 20 percent of incoming freshmen at Rice falls into this group and comes from households whose income is between $60,000 and $80,000, according to Forman.

The student-loan cap decrease will apply to all undergraduate students, regardless of their family's income bracket, although students who wish to borrow more than is included in their package and who have federal eligibility may request additional subsidized loans.

Of all students enrolled in 2008, 753 took out subsidized student-loans. Additionally, 37 percent of students received need-based awards and 27 percent of students received merit-based awards, with some students receiving both or having their merit-based awards replace need-based aid.

Despite hearing the number of future students the new policy will affect, some current students are still concerned about the financial need of those already at Rice.

"If the goal is to get more applicants this is a great plan," Will Rice College senior Brian Meckes said. "If the goal is to help current Rice students during economically hard times, it's not such a great plan."

Meckes also said he felt merit-based aid at Rice should be expanded.

With an increase in the number of families not required to take out loans and the student population increasing 30 percent by 2012, Student Financial Services will need more financial resources to carry out the intended changes.

"We will probably be utilizing more institutional dollars," Walker said, "but at the same time, the population increase will bring in more revenue from tuition. We've done long-range planning to ensure we are covering the increase in population."

Another way in which the university hopes to fund the financial aid changes is through the Centennial Campaign for $1 billion, $100 million of which will go toward a scholarship endowment, Forman said.

Whether or not the scholarships, which will pull from the endowment's accrued interest, will be awarded based on merit or financial need will be largely determined by the wishes of donors.

The higher cost for the university will not affect Rice's guarantee to meet 100 percent of families' unmet aid or decrease the amount of aid available to families whose incomes exceed $80,000, Walker said.

Currently, Rice is one of 31 universities in the Consortium on Financing Higher Education that are committed to meeting additional financial need after a given family's estimated contribution, a figure based on FAFSA and College Board applications.

But while other universities have adjusted tuition costs or financial aid packages to accommodate those affected by the economy, the open, public nature of Rice's financial aid calculations is not shared by most other universities and is even new to Rice, Forman said.

"In the past, although [the no-loan threshold for families with incomes of $60,000 or less] was often true in practice, it was not always explicitly stated," Forman said. "It's really only the wealthiest schools that are able to come out and state such aggressive financial aid policies in such a simple form. Rice is fortunate to be one of them."

Beyond the proposed changes, Rice is finding other ways to respond to economic troubles.

"What we've seen this year is that parents come to us mid-year because, for example, a parent has lost a job," Walker said. "We suspect, based on early indicators, that we are going to have a lot more of those cases, and we're prepared to deal with that. That's so important for our continuing students."

While Financial Aid Services does not always adjust the packages prepared at the beginning of the academic year, it is willing to reevaluate based on recent changes in a family's economic situation, Walker said.

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