"New Approach for International Aid"

asteriskea · October 30, 2007, 7:16am

Interesting article in Inside Higher Ed. on an important on-going experiment using the “global consensus approach” and a battery of common questions to calculate need and commensurate financial aid for international undergraduates. Adopted by a small group numbering about 10 colleges, that includes Yale, Amherst and MIT:

The system is based on applying a global coefficient to various cutoffs and figures used by colleges in awarding aid. That coefficient gross domestic product divided by the population, then compared to the figures for the United States is based on data produced annually by the Central Intelligence Agency to compare the relative wealth of nations.

Currency conversion alone doesnt speak to purchasing power, said Daniel Barkowitz, director of student financial aid at MIT. So colleges need better tools…

The effort to create such a system comes at a time that more colleges in the United States are talking about recruiting more international undergraduates, while discussion among some elite colleges grows about trying to meet their full need. (Only a relatively few colleges, even among those that meet full need for American undergraduates, extend that to students from other countries.)

Barkowitz and some of his colleagues in the effort presented information about the experiment at the College Boards annual meeting last week. While they are not yet ready to expand the effort to other colleges, they hope to do so in the future.

Caesar Storlazzi, director of financial aid at Yale University, said that prior to this effort, systems used to measure the need of foreign students varied from college to college and in degree of precision. This is about moving this away from back of the envelope calculations, he said…

<a href=“http://www.insidehighered.com/news/2007/10/30/global[/url]”>http://www.insidehighered.com/news/2007/10/30/global</a>

asteriskea · October 30, 2007, 8:46am

The 10 participating colleges are all members of the 568 group. Below are links to the 568 website that includes statements on their commitment to find a feasible set of common standards for determining the family’s ability to pay for college.

<a href=“http://568group.org/membership/members.html[/url]”>http://568group.org/membership/members.html</a>
<a href=“http://568group.org/methodology/[/url]”>http://568group.org/methodology/</a>

<a href=“http://568group.org/docs/memo.pdf[/url]”>http://568group.org/docs/memo.pdf</a>

tetrisfan · October 30, 2007, 8:53am

Wait, could you please explain this to me? I don’t really understand…

_brazilian · October 30, 2007, 11:15pm

Neither do I.

b_r_um · October 31, 2007, 12:35am

Well, 10 colleges changed the methodology by which they calculate the financial need of international students. It doesn’t really matter to us because we will have to deal with whatever fin aid packages we are offered anyway…

asteriskea · October 31, 2007, 5:53am

Everybody is in the same boat on that one - you have to work with what you get. But isn’t that the whole point of the experiment - what the offered financial package looks like? International students and their families can only hope that this type of experiment will help to streamline the process of applying for aid and, at the same time, have a favorable impact to recruit students who truly deserve financial support. I think many people, no matter how needy, find this whole process cumbersome and, frankly, intrusive - pages and pages of highly personal information, including bank statements and household management information, given out before there is any guarantee of an acceptance. To take Swarthmore as an example- an excellent LAC, well-endowed, with a well-known, long-standing, extremely generous approach to financial aid for international students and a member of the 568 group: their financial aid methodology made use of separate forms and batteries of questions to be filled out for domestic US residents, US citizens living abroad, as well as foreign nationals. Other universities including Yale used yet another set of forms and procedures. A standardized approach hopefully will help not only to streamline the process but yield a more equitable division of often very limited funds.

Then, of course, there is always the issue of who qualifies as “needy” - a hornet’s nest for US as well as for internationals. The tough issue of how to handle home equity - a hot topic lately for 568 member colleges, is in the mix as well. Often, what a family thinks it can contribute is not always even close to what the college thinks it ought to contribute. From the Inside Higher Ed. article, the colleges involved in the experiment see the new system to be a step in the right direction:

Generally, the officials involved in the effort said that they believed it worked well in its first year. Its not perfect, but I loved it, said Kate Gentile, senior associate dean of financial aid at Amherst. She noted that Amherst and the other colleges using the new system simultaneously used whatever their previous system was as well, to flag any serious discrepancies. She also noted that in cases where something seemed off, aid officers could still make changes.

The system seemed to work the least well, Gentile and others said, for students who came from families that are relatively wealthy in very poor nations. Another concern noted (although this is a concern in the United States as well) was how to handle countries with wide gaps in wealth by region or social group.

…many said that they were attracted to the idea of having a uniform and fair way to deal with the issue. Some quibbled about some of the choices. One aid officer noted for example, that home equity is a common way for families in the United States to finance many of their needs, but that this tradition is not the same in many countries.

…the 568 Group, … a small group of colleges that admit students regardless of financial need … have a federal exemption from antitrust issues to discuss issues related to awarding need-based aid. The college in the group are generally among the wealthiest in the United States, many of them with significant ambitions in educating foreign students.

Asked if the system would work for colleges without as much money or without similar ambitions, Barkowitz said that it could. Theres no presumption that you are meeting full need, he said. But with whatever system a college is using to determine need, it is much more reasonable to have common standards for dealing with economic variation in the world that pointing darts at the wall.

The global consensus approach is linked to concerted efforts by the international community, the world bank and International Monetary Fund for greater transparency and accountability when it comes to both defining poverty and economic status and allocating international aid. (Millennium Development Goals and the “Monterrey Consensus”) . Greater transparency and accountability is also at issue when it comes to financial aid in higher ed.

<a href=“http://www.imf.org/external/np/speeches/2002/032102.htm[/url]”>http://www.imf.org/external/np/speeches/2002/032102.htm</a>

angelutza · October 31, 2007, 2:09pm

One more question: what are the other universities, except Yale, MIT and Amherst?

boho_girl · November 1, 2007, 4:50pm

Asteriskea, on post #2, put the link where the member schools are listed.
I will repost it:

<a href=“http://568group.org/membership/members.html[/url]”>http://568group.org/membership/members.html</a> :)

asteriskea · November 5, 2007, 3:52am

Thanks for reposting the 568 full membership roster link. I

In any case, add Dartmouth to the list of the colleges experimenting with the global consensus methodology to adjust financial aid to internationals. Of course, the heart of the matter is that Dartmouth, like most other IHEs, is not need-blind for internationals but does promise to meet full “demonstrated need” - so the way demonstrated need is calculated is extremely important when it comes to the amount offered, possible wiggle room for negotiation, and, of course, the ultimate goal “to bring the most talented, aspiring and diverse students to campus — wherever they come from.”

The new system was designed in consultation with Dartmouth’s financial aid staff, according to Virginia Hazen, who directs the office.

The old system was overhauled in an effort to help financial aid workers more easily determine how much to award international students, whose relative family incomes are difficult to measure because of the discrepancies in purchasing power. For example, an American family with an annual income of $40,000 would expect to receive financial aid if they sent a child to Dartmouth, yet $40,000 of annual income would make a family in another country relatively wealthy.

The colleges take these discrepancies into account by employing this “global consensus” system, using a global coefficient to calculate appropriate financial aid awards.

“You need to understand what wealth in another country is,” Hazen said, citing international differences such as variations in investments and savings.

In order to calculate the global coefficient, a country’s gross domestic product is divided by its population and then compared to the identically calculated U.S. value. While generally successful, the system still has its flaws. It cannot be used for Canadian students, since their financial situation is so similar to that of Americans, and it does not adequately represent regions where wealth is unevenly distributed. The new system works the worst for students who come from comparatively wealthy families in exceedingly poor nations.

Although Hazen supports the new method, she admits that it is not ready to replace all other systems to become the sole calculator of international financial aid. The eventual plan for the global consensus system is to adapt it so that it can be used by the College Board to create standardized financial aid forms for all international applicants to all colleges.

While Hazen said she looks forward to such an outcome in the future, she emphasized that it will take more time before the system is ready for that kind of expansion.

Dartmouth ran the new system alongside the current one during the last financial aid calculation season and found that they would be awarding international students less financial aid under the newer system…

[TheDartmouth.com</a> | Rubric for int’l financial aid adjusted](<a href=“http://thedartmouth.com/2007/11/02/news/international/]TheDartmouth.com”>http://thedartmouth.com/2007/11/02/news/international/)

b_r_um · November 5, 2007, 4:46am

Note the last quoted paragraph:

[quote]
Dartmouth ran the new system alongside the current one during the last financial aid calculation season and found that they would be awarding international students less financial aid under the newer system.<a href=“emphasis%20added”>/quote</a>

Sounds like the new method is bad news…

asteriskea · November 10, 2007, 4:09pm

and that is why it really is still an experiment and used in conjunction with the “spreadsheet approach” and any “appropriate adjustments” made by financial aid officers- which, of course, may or may not include back of the envelope calculations… Yale, of course, figures among those colleges that pledge to meet full need with a need-blind approach to both domestic and international admission.

Article in the Yale Daily News:

“Univ. considers new formula for international student aid”

…Because the new formula would raise the family contributions for some students, the University has not yet formally adopted the new needs-analysis formula and has no plans to do so in the immediate future… financial aid administrators at several universities, including Yale, have made it a goal to resolve the discrepancies that arise when international students need figures are calculated with the domestic-student formula.

Under the new guidelines, financial aid officers would calibrate students aid packages according to their home countries global coefficients which compares foreign gross domestic products to that of the United States in order to avoid making overly generous offers. Storlazzi said the University is hesitant to formally adopt the new formula, in part because it would make Yale appear stingier than peer institutions Harvard and Princeton.

But a problem pointed out by the financial aid office and one student interviewed is that a move to the new guidelines could penalize some international students by failing to take into account cost-of-living disparities across different regions of the same countries…

The spreadsheet approach is still the offices default analysis tool for international students, Storlazzi said, and Yale has used the global coefficient formula so far only when reviewing concerns about already-assigned aid packages brought to the attention of financial aid officers.

For intellectual reasons, I like the idea, Storlazzi said. We have some things to work out. We know this isnt a perfect tool, but the domestic tool isnt perfect either.

The University is refraining from formally adopting the new formula in order to avoid unflattering financial aid comparisons with competitors such as Harvard and Princeton universities, neither of which uses it, Storlazzi said.

If Yale were to implement the new system, financial aid packages for many international students would be less generous…

[Yale</a> Daily News - Univ. considers new formula for international student aid](<a href=“http://www.yaledailynews.com/articles/view/22310]Yale”>http://www.yaledailynews.com/articles/view/22310)

asteriskea · November 12, 2007, 5:01am

Of related interest, The Institute of International Education has an Atlas of Student Mobility that breaks down information about internationally mobile students by country placed within their respective World Bank classification category - data given is for 2004.

Worldscape: Places of Origin:
[Places</a> of Origin](<a href=“JOKER123 daftar link login download alternatif joker388.net”>JOKER123 daftar link login download alternatif joker388.net)
[Sources[/url</a>]

and a page dedicated to Funding for US Study that also has links to other resources for international students interested in studying in the US:

[url=<a href=“http://www.fundingusstudy.org/wbs/cont_edit.asp]Funding”>http://www.fundingusstudy.org/wbs/cont_edit.asp]Funding</a> For US Study: International Scholarships](<a href=“http://www.atlas.iienetwork.org/page/59408/]Sources[/url”>JOKER123 daftar link login download alternatif joker388.net)

"New Approach for International Aid"

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