The challenged financial aid officer, part II: financial aid officers reveal the impact of the economic downturn in 2001-2002 - On The Money

University Business, July-August, 2002

CAROLE LAPIERRE-DENNING, Dir., Financial Aid Worcester State College, Worcester, MA

Student pop: about 6,000

Primary lenders: Fleet, Nellie Mae

"We heard rumblings last year that the budget would be cut, so I set aside some funds in case the cuts were severe. From what I set aside and through attrition we were able to avoid reducing financial aid for the coming year. Right now, we are anticipating lessened state scholarship funding. The House Ways and Means Committee has voted for a reduced amount and we're waiting for the senate to put its two cents in--currently, we don't know how substantial the cuts may be. The challenge will be dealing with these reductions to maximize the access to students. This year the cuts were significant but not severe, but if the economy continues as it is I may have a different answer for you next year."

DORIS SMITH, Assistant Dean, Financial Aid North Central State College, Mansfield, OH

Student pop: 3,000-4,000

Primary lender: FFELP

"Our state ended up in deficit, but we weren't expecting anything as drastic as the tack of state funding we were faced with. We've lost resources, personnel, and internal dollars. We're raising tuition (4-5 percent), plus adding additional fees for labs, etc., but the cuts are affecting everything. The greatest challenge, however, is Just to help our students with the cost of everyday living. Many of our commuting students have to drive an hour, hour-and-a-half to get to school, and with the cost of gas, car upkeep, or other transportation, it's one expense on top of another for them. In this depressed part of the country, many businesses have closed, and people thought they would go back to school, but it's costing them much more than they imagined. Financial aid doesn't cover it, and they thought it would."

SUSAN L. PUGH, Dir., Student Financial Assistance Indiana University, Bloomington, IN

Student pop: 35,474

Participates in direct lending

"The Indiana State Legislature had difficulty reaching consensus regarding funding of the state institutions, which affected our ability to project estimated instructional fees for the 2002-2003 enrollment periods in order to package aid. As a result, awarding has been over a month behind schedule, which will cause a certain cascading effect of delays in management calendar target dates."

REBECCA MORTON, Dir., Student Financial Planning Covenant College, Lookout Mountain, GA

Student pop: 1,200

Primary lenders: Citigroup, Chase Manhattan, Nellie Mae, AmSouth

"Our new student enrollment will be down 6 percent for the fail 2002 semester, so our administrators have offset the lost tuition dollars with a 6 percent tuition increase. This kept us on track financially. Now, however, I'll be watching enrollment trends for 2003. If enrollment drops again, we will feel an even greater impact. We may have to do with fewer new staff hires, or with lower compensation increases."

JIM SWANSON, Dir., Financial Aid Colorado College, Colorado Springs, CO

Student pop: 1,900

Primary lenders: CHASE, TIAA, Wells Fargo, Bank One

"While we did see a small number of families who were impacted by the economic downturn, the numbers were not as significant as we had predicted. Although I have not researched the reasons for this, my hunch is that parents who decided to enroll their children at Colorado College may have jobs which the economic downturn did not affect, or else they have alternate resources to assist their child's higher education financing. For families who were affected, we tried to be proactive and address those situations with additional institutional grants and scholarships. We did have to admit more students from our admission waiting list, compared to recent years. This may have been an indirect response to the economic downturn. Students who thought they could have afforded CC and did not apply for financial aid, may have decided to attend an institution with lower costs."

CLIFF NEEL, Asst. VP/Dir., Academic Scholarships & Financial Aid

Baylor University, Waco, TX

Student pop: 14,000

Primary tenders: Citibank, Wells Fargo, Nellie Mae, etc. "The university decided to increase tuition by 38 percent. That was a little bit more than we had anticipated. But we have been able to double our merit scholarship so the tuition bump wasn't quite as big a hit as we thought it would be. Students who are high academic achievers are not going to be hit quite as hard."