lack of financial aid - a real or imagined problem at Chicago vis a vis its peers

Colleges and Universities A-Z University of Chicago ✅
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<p>We keep talking about U Chicago's comparatively lower level of financial aid as one of the issues explaining a lower yield than its peers.</p>

<p>However, this is the data I saw:</p>

<p>Best</a> Values in Private Colleges, 2011-12</p>

<p>You will notice that the delta between the cost of attendance for U Chicago minus the average fin aid is not meaningfully different for U Chicago vis a vis its peers. However, what's not clear is whether that's average for ALL students, or average only among those who receive aids. In that case, a case can be made that the NUMBER of students getting aids is smaller at U Chicago. If so, the perennial "low aid as a cause of low yield" argument still holds.</p>

<p>However, next you can look at the average loan balance at the time of graduation. Then you do see U Chicago's number ($22000+) is higher than the likes of HYPSM. But it's in the ball park (with a few thousand dollars difference) with Duke, Brown, Dartmouth, and U Penn. No, it's not chump change, but I don't think students and their parents will make a final decision of where to go based on additional $4K of student loan for the full four year college education/experience. </p>

<p>Yet, even taking into consideration of the ED advantage, the yield for these other schools is meaningfully higher than Chicago's. So, while we can have a discussion on the need to improve the fin aid as U Chicago continues its march toward the inner sanctum of the tippy top elite college, there is still a great deal of (head) room for HONEST and well crafted marketing efforts - plus, general improvement on some non-academic fronts. A recent David Axlerod's announcement for the political institute that bridges the gap between theory and practice is a move in the right direction. </p>

<p>All in all, my son is a third year now, and I can't be happier for the decision we all made together (his and ours) that led him there. U Chicago wildly exceeded both his and our expectation. I don't see how he could have been happier at other schools.</p>

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<p>“You will notice that the delta between the cost of attendance for U Chicago minus the average fin aid is not meaningfully different for U Chicago vis a vis its peers.”</p>

<p>Looks pretty different to me. Other than Penn and Cornell, Chicago is at least one or two thousand dollars behind every single one of its peers. On the upside, Chicago is now beating Northwestern by about $5000 worth of financial aid a year, which is extremely significant, seeing that Chicago’s financial aid has historically been inferior to Northwestern’s.</p>

<p>Anyway, the Total Cost/Financial Aid data is for the entering class, while the debt at graduation is for those graduating this year, so improvements in the former will precede improvements in the latter. I have a feeling that Chicago’s Total Cost - Avg. Fin. Aid figure has decreased over the last few years, so that the Debt at Graduation figure is slightly inflated.</p>

<p>In any case, I think Chicago still has a lot of room to improve its financial aid, and I still think financial aid and lay reputation is the cause for Chicago’s low yield. </p>

<p>Just as you stated, Chicago lags in the number of students it gives aid to. A quick search on Collegeboard yielded the following % of students given aid:
Chicago 44%, Cornell 51%, Dartmouth 53%, Brown 49%. It could be that Chicago is getting a lower percentage of needy students (and this would make sense given its high SAT scores and the historical correlation between SAT scores and wealth), but Chicago is still likely skimping on aid for some students.</p>

<p>Chicago still has a long way to improve. However, people forget that Nondorf is known not just for high admissions numbers, but also for increasing financial aid. I think that in the few years he has been here, aid has increased and will continue to increase significantly for the next few years. Also, it was overlooked here, but Chicago is increasing its financial aid package by an automatic $1750 for students whose parents make between $60k-90k. This should help close the gap between Chicago and its immediate peers.</p>

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<p>Totally agree! UChicago exceeded most people’s expectation.</p>

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<p>I am sorry if I sound like a one percenter. But do you really think students/parents are choosing one school over the other for a couple of thousand dollar difference per year when the overall cost of attendance of all spiffy private schools is approaching $55k - 60K?
It’s only couple of % difference ($2K/55K). Yes, $2k is not a chump change, but people look at the ratio, not the absolute amount (well known economics research outcome: people will drive 20 minutes to save $10 for lower price/tank of gas, but won’t bat an eye for $500 difference when you guy a car worth $30K).</p>

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<p>I highly doubt that socioeconomic difference account for the % of the students getting fin aid. There are all pretty competitive schools with outstanding students. More likely reasons are (1) U Chicago has a higher bar for qualifying for fin aid (2) U Chicago’s fin aid in the form of athletic scholarship is much lower or non-existent compared to its peers. (of course, there must be other reasons too, I am just hitting on what I think might be important causes).</p>

<p>For the point (2), I absolutely have no idea whether this is the case. I am shooting from the hip, and just thought this might make sense logically given that U Chicago is not a sports powerhouse and does not appear to have a few, if any, recruited athletes - much fewer than its peers. Comments on this?</p>

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<p>What you’re ignoring is the fact that no one cares about the overall cost… they care about how much they have to pay. And when at Chicago the average amount that you have to pay is $23.5k and at Columbia the average amount you have to pay is $20.9k, that’s a pretty significant difference… over a 10% difference, in fact (and over $10k over 4 years). And yes, that WILL affect people’s decisions.</p>

<p>But even more significantly, Columbia provides aid to 54% of its students. Chicago, 44%. It’s a math problem that’s hard to see unless you really think about it (explanation below), but the implication here is that the average amount that needy students have to pay is much more at Chicago… probably something like $5k/year, i.e. an over 20% difference, and a $20k overall disparity.</p>

<p>So say that Columbia provides aid to the poorest 54% of its students and Chicago provides aid to its poorest 44%. The extra 10% of students that Columbia provides for will bring its overall average financial aid figure down significantly since the extra 10% will need much less financial aid. This means that Columbia must be giving a whole lot more money to its poorest 44% of students for its Overall Cost - Average Financial Aid Package to be lower than Chicago’s. In the end, this likely implies that Columbia’s overall cost is about 20% cheaper than Chicago’s for those actually eligible for aid. Now, apply this logic to MIT, which provides aid to 70% of its students with an average Total Cost - Aid figure will lower than Chicago’s, and you’ll see why Chicago’s aid is far inferior to MIT’s.</p>

<p>Conclusion: Chicago is still under-performing in comparison to its peers. It is still on its way up in the financial aid world. Although it might be close to Penn and Cornell (although still not on the same level), it has a ways to go to catch up. This is definitely impacting Chicago’s yield.</p>

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<p>Phuriku:</p>

<p>Maybe I’m missing something, but I think the key statistic hyeonjlee is using is the avg. student debt at graduation. You’re right, though, that students worry about how much they’re going to need to pay, but do you really think paying 3k more a year for Chicago than Columbia is the factor that tips the scales toward Chicago? Do you feel that since students have to pay $2k more a year for Chicago than Dartmouth, that’s the tipping factor that points them to Dartmouth? </p>

<p>Put another way, say Chicago improved its financial aid a lot, and all of a sudden, it cost 3-4k more a year to attend Duke or Columbia than Chicago. Do you think that would really swing yield in Chicago’s favor? </p>

<p>I don’t think such a swing would really lead to significant yield gains for Chicago. </p>

<p>This list (which is already outdated) indicates that the usual suspects of schools are pretty tightly clustered. </p>

<p>UChicago can certainly improve on financial aid, because this is a good area to build upon in the future. Even if the school made BIG gains, however, and started costing a few k less than other schools, would this really change the decisions that much?</p>

<p>I know it can’t hurt, but this doesn’t seem like that big a deal.</p>

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<p>Cue7,</p>

<p>what you are saying is exactly my point. $2K is a lot of money if it is $2K vs. $1K. However, when it is $32K vs. $34K in fin aid for a school that cost $58K to attend, it’s not much at all, and I highly doubt it’s a deciding factor. There is ample research in the field of economics and behavioral science that the same people who will drive extra 10 miles to save $10 in gas will not do bat an eye over $1k difference between two cars: $20K vs. $19K. There was a whole slew of theoretical explanations for this phenomenon - I forget…</p>

<p>Your example is very apt: those who are choosing Darthmouth or Brown over Chicago won’t flock to Chicago simply because Chicago’s net cost of attendance after fin aid is lower by $2K.</p>

<p>In terms of the % of who get fin aid, I am still wondering what portion of that difference can be explained by the comparative lack of athletic scholarship at U Chicago.</p>

<p>My sentiment is, from a pure business perspective, Chicago is better off allocating financial resources to improve the overall quality of student life and professional career support than fin aid, since fin aid difference seems marginal while there is PERCEIVED and perhaps real difference between Chicago and its peers in terms of the quality of student life. Of course, I am qualifying this statement with “pure business point of view”. There is a moral and ethical dimension to fin aid, and I fully support the plan to improve fin aid to attract and help lower income bracket students. But I believe pointing at the fin aid as a major issue in yield is misguided and oversimplified.</p>

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<p>Cue7 and hyeonjlee: </p>

<p>Your analyses have a number of problems in them. You have to look at the mathematics behind the numbers if you’re going to get the real picture. The data set is extremely deceiving. Please study my mathematical analysis below.</p>

<ol>
<li><p>You’re taking the vantage point of an independent student to make a claim that students don’t make decisions based on a 10% disparity in price (which is actually 15-20%, as I’ve indicated). Your analysis makes sense from the viewpoint of a rational student, but you have to realize that we’re not dealing with a single student: we’re dealing with large numbers of independent students whose financial situations are all over the place. I certainly think that a 10% difference per year in total cost would affect the decision of at least 10% of cross-admits, don’t you? Boost that up to a 20% difference in cost, and I’d be willing to bet that it would affect the decisions of a good 30-40% of cross-admits. If we improved our aid to Columbia’s level, we could start winning more of our cross-admits since fewer students would be affected by disparities in cost, and our yield would rise. It wouldn’t be up to Columbia’s level (as we don’t have ED, the NYC location, etc.), but I’d bet good money that it’d be up to around 50%.</p></li>
<li><p>hyeonjlee: The conclusion of the study you keep citing seems to be that people think in terms of percentages, not in net cash. The examples you keep citing have differences of 5-6%. The examples I’m bringing up are 10-20%. Clearly, the difference between $1000 and $1060 is visibly smaller than $1000 and $1200 to all but the most irrational buyers.</p></li>
<li><p>Speculations on athletic scholarships are invalid, as that would count as non-need-based aid. All analyses performed here have excluded that figure. Plus, Ivy Leagues don’t even have athletic scholarships. We have to face the fact that Chicago just providing anything close to the aid it would need to match its peers, and this is something that needs to be corrected.</p></li>
</ol>

<hr>

<p>Now, what’s bothering me more than anything is the reality I’ve been exposed to. I know plenty of people who have received near-full rides to Yale or Harvard and who have been given $0 in aid by Chicago. But since this figure doesn’t count for Chicago on the data set that hyeonjlee linked to (only students who receive aid are listed), so a large number of financial aid problematics are completely ignored. </p>

<p>By looking at the data set that hyeonjlee linked to, you’d think that the average aid discrepancy between Chicago and Harvard/Yale is only about $8k. This is COMPLETELY AND TOTALLY WRONG; the actual figure is something like $20k after a brief mathematical analysis presented below. </p>

<p>The $ that Harvard and Chicago give to financial aid each year:
Harvard: $166m ([Harvard</a> College Admissions § Financial Aid](<a href=“http://www.admissions.college.harvard.edu/financial_aid/index.html]Harvard”>http://www.admissions.college.harvard.edu/financial_aid/index.html))
Chicago: $88m ([University</a> announces increases in education cost and financial aid for 2011-12 | UChicago News](<a href=“http://news.uchicago.edu/article/2011/03/21/university-announces-increases-education-cost-and-financial-aid-2011-12]University”>University announces increases in education cost and financial aid for 2011-12 | University of Chicago News))</p>

<p>If you do the math, with the figures that Chicago gives 44% of students aid and Harvard gives 63% of its students aid, Harvard can literally provide the poorest 44% of its students with full rides WHILE still giving $10k to the next 18%. This is a difference of about $20k ON AVERAGE for those eligible for aid. (Quite a change from the stated $8k on the data set, which is extremely deceiving to the inattentive eye.) The same thing applies to all of Chicago’s peers; Chicago is losing by over $5K PER STUDENT eligible for aid to almost all of our peers. This is why you can’t just look at data and make seemingly obvious conclusions. Data is often deceiving.</p>

<p>Make no doubt about it. Chicago is losing in financial aid to its peers, and it is losing BADLY. Much worse than I thought before I did a mathematical analysis, in fact.</p>

<p>“But I believe pointing at the fin aid as a major issue in yield is misguided and oversimplified.”</p>

<p>No, it’s the data set that’s misguidING and oversimplifyING. Financial aid is much worse than it seems from the data set, and is no doubt having an impact on yield.</p>

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<p>Phuriku:</p>

<p>This is great analysis, and sure, it points to a disparity between Chicago’s financial aid and the aid given by the likes of Harvard and Princeton (this is unsurprising). </p>

<p>The larger issue, though, is how much is financial aid and cost truly the reasons behind a student choosing a peer school over UChicago?</p>

<p>From recent reports, the vast majority of students at elite schools come from wealthy backgrounds. For example:</p>

<p>[Duke</a> draws ?rich kids of all colors? | The Chronicle](<a href=“http://dukechronicle.com/article/duke-draws-rich-kids-all-colors]Duke”>Duke draws ‘rich kids of all colors’ - The Chronicle)</p>

<p>I think it’s easy to say, well, Harvard is cheaper for a student than UChicago, so that’s why a student goes there. Or, alternatively, that it costs ~10k more overall to go to UChicago than Columbia, so that’s why many students choose Columbia over UChicago.</p>

<p>I ask again though, if the situation was reversed, do you think you’d see a drastic difference in cross-admit battles? </p>

<p>Finally, my larger point is that UChicago loses students to its higher peers for reasons other than cost. As students at elite schools tend to be quite wealthy, the 10-15% markup for a UChicago education matters to maybe 20-25% of admitted students. </p>

<p>More persuasively, perhaps cost is a pretext for some students, but most students are going to harvard or princeton or columbia for the traditional reasons - prestige, quality of life, whatever. </p>

<p>You focus on difference in cost as being a big reason for students turning UChicago down. It’s a factor, sure, but there are potentially bigger problems that UChicago needs to correct (continuing to improve quality of life, resources for students, exit opportunities for students, strength of advising, etc etc.)</p>

<p>Again, if you flipped the scenarios, I don’t see the cross-admit numbers changing that much, which points to other reasons driving students to pick the superelites over UChicago.</p>

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<p>Comparison of attending students for FA numbers is misleading.</p>

<p>What needs to be looked at but people never have stats on this: how many choose other schools because they were given a better financial package. So if Chicago offers no money for a student whose family makes 100k (I don’t know the cutoffs) but Harvard offers about 75% in aid, that is not reflected anywhere for attending students. Loans at time of graduation usually reflect Stafford loans for 4 years (5500 x 4) but Chicago is trying to remedy that with Odyssey (?) grants.</p>

<p>Most colleges work out quite well at lower incomes. It gets competitive landing the students when Harvard and Princeton are offering money to families making upto 150k or more and people want to go there because they don’t see those from Chicago.</p>

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<p>Data point at our house: Tufts’ FA package was about $7-8k better than Chicago’s. Two kids in college, EFC right around full pay when just one is in school. Money was not the deciding factor in S2’s decision, but the difference was enough that it could have been a dealbreaker for others.</p>

<p>Interestingly, S2 said about a year later that if Chicago had given him a scholarship, the decision may have gone the other way. Not because of the $$ per se, but because it would have meant something to him personally to have been recognized in that way. Nevertheless, I think, for a variety of reasons that have nothing to do with rankings, prestige, FA or all the other things that we worry about in the admissions process, he made the right choice.</p>

<p>ETA: My other S is a Chicago student, so don’t interpret my post as Chicago bashing! :)</p>

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<p>My issue with UChicago is their policy on student assets. They have said that even if you use up all the student assets in the first year, they still count those assets as there for the remaining years. They still want ~25% each year of the original amount, whether it is still in the bank or all used up. I talked to other FinAid counselors and they said that when they reassess financial need each year, they REALLY do.</p>