Middle-class families saw the amount they pay after receiving their financial aid packages rise at a faster rate than any other income group over five years.
Experts say GW has to not only help the poorest families, but also weigh how to lure families who can pay more out-of-pocket. Still, top administrators say it’s the middle-class families that concern them most.
Between 2008 and 2013, families that reported making between $30,000 and $48,000 a year paid 28 percent more on average to cover the cost of attendance at GW, after factoring in grants and loans. And families in the next bracket, who make up to $75,000, paid 24 percent more in that time frame, according to data GW is required to report to the Department of Education.
That increase is more than double the jump compared to families with the highest incomes, according to the data.
While the data shows families in the middle income brackets faced larger increases in their costs, GW administrators said they consider more than just income when determining need. To look at who is truly middle-class, the financial aid office looks at a family’s wealth like stocks, real estate investments and family business value – assets federal financial aid forms overlook.
“Frequently it’s these families that have the biggest time struggling,” said Senior Vice Provost for Academic Affairs and Planning Forrest Maltzman. “The families with a job but aren’t Pell eligible.”
The Board of Trustees approved a cost of attendance increase last winter that pushed GW’s sticker price past $60,000. The average net price at GW – the out-of-pocket cost after aid is given out – topped $32,000 in 2012, according to the most recent data from the Department of Education.
And families in the lowest income bracket faced 14 percent net price increases, according to the data.
Last year, about 14 percent of GW students received Pell Grants – which the government most often awards to students whose families make less than $20,000 a year – up from 9 percent six years ago. Experts consider Pell Grants a key indicator of a school’s ability to recruit low-income students, which GW has pledged to improve.
Though a middle-income family may not qualify for a Pell Grant, that doesn’t mean they don’t need aid, said Sandy Baum, a senior fellow in the Graduate School of Education and Human Development.
“They may not get a Pell Grant, so [the school doesn’t] get brownie points because you’re not poor enough. I worry about those [middle-income] students suffering,” said Baum, who specializes in student financial aid policy. “In the very low-income bracket, there aren’t as many and everybody is watching. So focusing on the bottom income band is a problem.”
Even though the data shows stark contrasts in cost between the highest and lowest income brackets, Senior Associate Provost for Enrollment Management Laurie Koehler said it doesn’t show non-income assets that GW considers when giving out aid.
“It’s not [the net price] data that honestly is terribly informative to how we’re awarding students. Our goal is to award students with as much as possible based on what their need level is,” Koehler said.
Koehler, whom the University hired last fall to link its admissions and financial aid offices, said the data excludes details about a family’s wealth – like businesses or stocks – that are left out of federal aid forms. She said GW, like many schools, has its own method of calculating income that takes that information into account to paint a fuller picture of what a family can afford.
“We want to get the best students we can within the constraints of a finite budget,” Koehler said. “We really want students to come here and stay here, and we know that by meeting as much aid as possible that will happen.”
Last fall, administrators publicly admitted for the first time that GW puts a portion of its applicants on the waitlist if they can’t pay full tuition. About 60 percent of students receive grants from GW, and the University met about 87 percent of need on average last year.
Universities will often spread out their financial aid budget by awarding smaller packages to wealthier families, experts say.
Richard Vedder, the director of the Center for College Affordability and Productivity, said after the 2008 economic crisis, many schools realized they needed students who could afford most of the cost of tuition to bring in more revenue.
“After 2009, they decided, ‘Hell, we can’t afford this. We’ve got to get a lot of rich kids, or from moderately affluent families, who will pay a larger portion of tuition,’” Vedder said. “The way they did this was cut discounting of low-income students. So as tuition went up, financial aid for low-income kids didn’t increase, so those kids got walloped with big net increases.”
The University has made other efforts to keep costs down. In the spring, University President Steven Knapp charged a group of top administrators with finding ways to accept more low-income students and see them graduate. GW also has a fixed-tuition policy, which keeps the cost of tuition the same for returning students and allows families to plan without fear of tuition rising.
In May, the Board of Trustees signed off on a 3.6 percent increase to GW’s now $170 million financial aid pool after it decreased the year before.
Mark Kantrowitz, a financial aid expert and senior vice president and publisher of Edvisors.com, said “the reality is everyone struggles” when trying to pay for college, especially low-income students who may qualify for federal aid but still are “paying a greater portion toward college costs.”
Students with reported family incomes of less than $30,000 paid an average net price of about $18,000 in 2011 – a 22 percent increase in cost from the year before. That’s about 60 percent of their reported family income for the year.
Koehler, who warned of taking the data at face value, said a more effective method for making comparisons between schools is with college admissions “shopping sheets,” like the one GW implemented for the first time this fall. More than 500 schools already use the sheets, which show students a total price tag, the type and amount of aid available, graduation rates and how much debt they’ll carry after graduation.
“I think it gives students and families a really clear way to say, ‘This is the expectation of what I’m going to pay compared to this other school if the other schools are using it,’” Koehler said.
This article appeared in the September 8, 2014 issue of the Hatchet.