The University’s undergraduate financial aid pool will grow by 3.6 percent next year, nearly matching the percentage increase in tuition.
The slight funding increase will amount to about $6 million more for undergraduate aid than last year, when the Board of Trustees signed off on a $2 million decrease. The University’s financial aid budget swelled during the recession when more students reported need.
The about $170 million undergraduate aid pool that the Board of Trustees approved at its meeting on Friday returns to the University’s pattern of increasing aid totals to draw more diverse and academically excellent students to its programs. Last year’s decrease was the first in six years.
In 2012, the University also grew their pool about 3 percent – putting them far behind the national average. That increase was also the smallest jump since 2010, though overall the University’s financial aid budget has doubled over the last decade.
Associate Vice President for Financial Assistance Dan Small said in an email the increase shows the “continuing commitment to make GW accessible for students from all backgrounds,” though it is on par with the amount tuition will grow this year.
“We believe that even with the improvements in the economy, financing higher education will continue to be a challenge for families and requires a continued investment in financial aid,” Small said.
Small declined to provide the amount of funds reserved for need-based aid.
The University publicly revealed for the first time last fall that it places hundreds of students who cannot afford the cost of tuition on its wait list, a decision that affects up to 10 percent of the University’s 22,000 applicants each year.
Small said then that using a need-aware admissions strategy allows administrators to better plan out aid packages for students while staying within the confines of its budget.
The University doled out about $164 million this year, which includes funds from the University’s endowment and new fundraising gifts received this year. Next year, it will distribute a total of $233 million to graduates and undergraduates.
The University broke out of the nation’s top-10 most expensive colleges about four years ago, but the cost to attend GW has swelled about $6,500 in the last six years and now tops $60,000.
Last year’s shrinking financial aid pool came on the heels of a standard 3.4 percent tuition increase. About 10 to 15 percent more students requested aid, which marked the first time appeals increased since the recession.
Richard Vedder, the director of the Center for College Affordability and Productivity, said universities typically look to increase their financial aid pools to remain competitive in tough economic times as the cost of college rises.
“Schools increase aid for altruistic reasons because they want more low-income students, but also for competitive reasons,” he said.
Vedder said GW may have decided to increase to send a message to potential students.
“There’s a PR problem,” Vedder said. “If it’s thought of as a rich-kid school or a high-cost school, that isn’t terribly attentive to the needs of low-income students.”
Administrators at colleges nationwide have paid more attention to the cost of education after President Barack Obama declared a “year of action” to address inequality. Following the President’s announcement, the University launched a task force in January to address access and retention.
College admissions strategist Steven Goodman said colleges often use larger financial aid pools as marketing tools to help draw students in increasingly competitive environments.
“You can use financial aid to recruit students with competing financial aid packages from other universities,” Goodman said. “It’s a riskier strategy but it’s better for parents and families.”
Goodman also said schools may decide to give out more aid to recruit diverse groups of students from all states or backgrounds.
“It’s not just the amount of money, it’s where the money is going,” Goodman said. “Is GW going to spend all its money on students from California or students who were also admitted to Georgetown or Duke, or spend money on students from Florida who have high test scores? That’s a GW institutional decision.”
Jacqueline Thomsen contributed reporting.