<p>The W&L Promise guarantees free tuition to any undergraduate student admitted to Washington and Lee with a family income below $75,000. In addition, those students may be eligible for loan-free assistance to cover room, board and other educational expenses, based on demonstrated need.</p>
<p>Since it costs about $60,000 a year, of course a family making $75,000 can’t afford it. The “Promise” is simply a re-packaging of what they have been doing with financial aid for years to make it affordable. The “promise” is about seeming new. They know they are expensive and are doing what they can to fight that reality. </p>
<p>The added benefit of announcing this is to divert attention from the bad publicity they received on application inflation.</p>
<p>Other elite schools have been doing this or something like it for some time. W&L wishes to be considered as being among these elite schools, and this is one way for it to do that. I commend the university for its efforts in this regard. That Johnson endowment is having impacts that are just now becoming obvious. That is why the incomplete app scandal is so stupid. The goal of college administrators should be improving the educations of the people of the world, not making their own stars shine. There’s been too much of the latter at many institutions and in many ways CC could only begin to discuss.</p>
<p>Awesome new program W&L.</p>
<p>The program would be better if W&L was need blind, unfortunately according to admissions W&L is NOT need blind so those who otherwise would qualify for admission and the benefit of the free tuition guarantee will be denied if their parents are not wealthy enough to pay full rate. </p>
<p>Given that W&L has an endowment of about $1.3 billion, it should go to need blind admission process to really make this program a true benefit to all qualified students.</p>
<p>Puzzle78
The benefit of this program is that it potentially reduces the amount of loans for lower income students which is a good thing. Not having to worry about the cost of tuition is a great relief for families earning less than $75,000.</p>
<p>rlpak14</p>
<p>There are only a handful of schools in the U.S. which can afford to be truly “need blind.” The reason is that endowments have pieces of them RESTRICTED for not only financial aid but: faculty salaries, research, athletics, facility maintenance, staff support, program support, etc. </p>
<p>The $1.3 billion you mention includes about $350 million which the university does not control and for which it only receives dividend income. That income equates to about 70% of the money it would yield if part of the university managed endowment.</p>
<p>As noted in one thread or another, the university has about $400 million of its endowment available for financial aid support. That is not enough for them to be need blind. They already take about 40 cents of every full pay parent tuition dollar to help fund financial aid. Most schools do this but there is an upward limit on how much you can redistribute towards financial aid before these full pay parents protest. And, not all of the full pay parents are “rich.” They have saved for this all along, or they make enough money to fund a full pay. That makes them affluent not rich. The vast majority of full pay kids would fall into that category: two working parents making good livings but not flying around in their private jets or boating on their yachts. It is a financial sacrifice for these people too, especially when they are subsidizing other students. If you doubt this subsidization is going on there was an article on the front page of the Wall Street Journal a couple of weeks ago about this subject. It is becoming increasingly controversial.</p>
<p>For students admitted who fall into this category, W&L has been doing this for a long time. They just did not package it as a sales tool as they did the merit scholarships into the Johnsons.</p>
<p>RLPAK – My son is a freshman at W&L. We are not full pay and we are not getting a full scholarship. We are somewhere in between. My S was accepted at many schools and the package from W&L was the most generous. There are many kids that fall into that category.</p>
<p>I think the key is in the word “admitted”. I would not be expecting a huge increase in the number of admitted students in that range, although there will probably be an increase in the applications.</p>
<p>We are one of those families described by general77. Two income, but we have had to save and borrow to send our 3 children to college. (They are on their own for grad school.) Our oldest received a full tuition Johnson Scholarship, a gift that made college more affordable for our second (who also received some scholarship assistance to his college). When our third decided on W&L, we felt we could not ask again for such generosity, so we have chosen to make the financial sacrifices for him to attend (retirement, what’s that?). We figure that since it’s our last, there are many families who were in our position with our first, so the Johnson money (and some of our tuition $ for #3) is well spent on them. We do appreciate, however, that admissions can take into account the financial factors that keep W&L strong.</p>
<p>Esquette</p>
<p>I applaud you for being able to send 3 children to college:) FYI I would not qualify for the Free Tuition Program since my parents earn more than the max income of the program. My comment has to do with why W&L does not just go to need blind admission and have all students who are admitted pay what they can whether it be full cost or discounted based upon need.</p>
<p>General77 is arguing that there isn’t enough money for W&L to go need blind and I think he is wrong. My estimate is that less than 10 need students would be accepted if W&L went need blind. Even assuming that all 10 required full tuition award to attend, W&L would only have to bear the cost of about $500,000 in extra tuition out of their nearly $1.3billion endowment. That should be quite doable.</p>
<p>As to General77 other arguments, I cannot understand how there are separate endowments to pay professor salaries, overhead, staff etc. What the heck is $45K/yr tuition for if not to cover the costs of paying professor salaries, overhead, staff etc. Since there are about 2000 student at $45K/year tuition, that amounts to $90Million in tuition revenue.</p>
<p>RL - I certainly do not pretend to be a numbers person, but it seems to me your argument for need blind admissions is mistakenly premised on the full 1.3 billion endowment actually being available for financial aid. General77 tells us (with enough specificity to establish the credibility of his information) there is only $400 million available. As you probably know, money that is earmarked for specific purposes is not available for other purposes. </p>
<p>Plus the enrollment to my knowledge is closer to 1800 than 2000. And on what do you base your estimate of fewer than 10 additional full tuition scholarship students? </p>
<p>Even using your estimate of “only” $500k annual shortfall in tuition for the extra need blind admitees, how long could the university afford to go need blind without looking to full pay families to contribute more than the 40 cents per tuition dollar that they already contribute toward the education of students with financial need? </p>
<p>I do not know the answers because I do not have all the facts. The people who do are working at and for the University. Perhaps before you conclude on a public forum that need blind admissions are fiscally possible, you could contact the University to obtain verified information for your projections and analysis? You strike me as someone who has a sincere interest in learning more. Based on my experience with the administration generally and the financial aid office specifically, I expect you will get some additional information and honest conversation on this topic.</p>
<p>Esquette
Thank you for your input.
General77 in another thread stated that W&L needed $200million more in its endowment to go need blind. However, General77 started with the belief that W&L had a total endowment of $850million broken down at $400-500million for financial aid endowment and $350million of trust endowment. General77 stated that the endowment needs to be $200million larger for W&L to go need blind, so a financial aid endowment of $700million is needed.</p>
<p>I pointed out that W&L’s endowment was closer to $1.3billion so under General77’s own calculations, W&L financial aid endowment is about $900million so it does have the funds to go need blind and then some. In fact, W&L has one of the top 20 highest endowments per student of any college public or private in the country.</p>
<p>Please understand “need blind” is not interchangeable with meets 100% need. In fact W&L is rare in that they meet all need without loans. W&L works with Questbridge who is NOT need blind but is designed for lower incomes. Also, international students are handled in another matter. Run an EFC on Washington and Lee…it is lower than most of the elite schools and no loans. Duke, for example shows us a higher EFC and then uses loans to meet the 100%. W&L is very fair for all classes and by using some lower income “aware” programs…they are need aware.</p>
<p>rlpak14</p>
<p>I don’t think you understand how college endowments work. Donors give money to them. Those donors typically have a specific area which they would like supported. Therefore they restrict funds for those uses exclusively. Any market growth in those donor designated funds is added to the initial donated principal. So, W&L has in the ballpark of $400 million allocated (and specified by the donors) to support financial aid. What are referred to as “unrestricted” endowment donations are very hard to come by. Colleges love them but donors don’t. After all, it is their hard earned money and they want it used as they see fit. That is the stipulation attached to almost all donations. This is why W&L has “only” about $400 million for financial aid funding. Pretty simple.</p>
<p>The school’s annual budget is about $110 million. If every student there paid the approximate full cost of going they would produce about $105 million of revenues. So, you can see that even in that impossible scenario they would be short about $5 million. Factor in about 50% of students receive financial aid and the average grant being $39,000. With roughly 1000 students receiving that much the school is spending about $39 million on financial aid. Universities use about a 4.5% draw from their endowments to fund operations. At that draw % the principal needed to fund the $39 million would be $866 million, a little more than twice the funds W&L has available to support financial aid. That is why full pay students subsidize financial aid at all but a handful of schools. They fund the difference between the $400 million “draw” and the $466 million more they would need to fully fund financial and be need blind. I don’t agree with this practice but it is pretty simple.</p>
<p>The reason universities use a 4.5% draw is that, as you might have noticed in the past decade, markets can have precipitous drops. The 4.5% draw over time allows for those drops to happen without losing too much core value of the endowment while still supporting operations.</p>
<p>justthinkingnow now is correct about the difference between need blind and meets 100% need. W&L is pretty generous in that regard and as a private school has to pay attention to its budgets closely so they can’t be need blind. Again only a handful of schools can afford that.</p>