Northwestern was one of 28 top-ranked universities to announce last week that it has agreed to a sweeping set of financial aid guidelines that reaffirm the institution’s commitment to need-based financial aid rewards.
The new guidelines will not cause large changes in NU’s financial aid policies, which are already almost completely granted on a need bases, said Rebecca Dixon, NU’s assoc. provost for university enrollment.
She said NU’s push for need-based aid follows from social concerns.
“It’s not good for society to pile (financial aid) all on one handful of brilliant students,” Dixon said. “It might be good for (an individual student) who’s getting $5 million in aid, but it doesn’t benefit society.”
Universities hope the guidelines will create a consistent financial aid methodology so that families of students who are applying to multiple schools can expect to pay the same amount at each one, Dixon said.
For instance, if a student applied to three universities with different tuitions, the schools theoretically would offer different amounts of financial aid that would leave the student’s family paying the same amount at each school.
The guidelines won’t make the financial aid application process completely mechanical, however. It allows university financial aid offices to apply “professional judgement” to individual applications.
Dixon said NU would try to use professional judgement as much as possible, in most cases to lower the family contributions toward tuition.
The guidelines were announced just months before the expiration of a 10-year Justice Department consent decree that prohibited certain schools from collaborating on financial aid applications before they were sent out to students.
Eight Ivy League schools and MIT began collaborating on similar applicants’ financial aid forms to ensure their families would pay the same amount at each school in the 1950s. In 1989, the Justice Department’s Antitrust division began investigating the practice. In 1991, the eight Ivies signed a consent decree agreeing to abstain from collaborating for 10 years. MIT took the case to court and lost in 1992.
Although NU wasn’t involved in the Justice Department’s case, administrators knew they had to be careful, Dixon said. And with the consent decree coming to an end this year, universities wanted to announce the guidelines before the Justice Department could take new, possibly more stringent, action.
The agreement also comes just months after Princeton announced that it would use its $8 billion endowment for financial aid so students no longer would need to take out loans, causing some administrators to worry that universities would start a bidding war for the most sought-after high school seniors.
Although Dixon said the agreement might help stave off a bidding war, she said the agreement had been in planning long before Princeton made its announcement.
NU gives out more than $45 million every year in need-based financial aid, Dixon said. She said NU’s student body tends to be needier than East Coast private schools such as Duke and Yale, both of which also have agreed to the guidelines.
In the Midwest, NU has to compete with highly touted public universities such as The University of Michigan, The University of Illinois and The University of Wisconsin, all of which offer lower tuition than private schools, Dixon said. East Coast private schools don’t have the same competition from state schools, she said.
The result is that NU tends to offer more need-based aid than East Coast private schools, which gives it a more economically diverse student body, Dixon said.
