Williams Ends Need-Blind Admissions for International Students

[arcadia]

<p>From Interim President Bill Wagner:</p>

<p>

To the Williams Community, </p>

<p>Financial aid has been much on the minds of members of the Williams community as we have thought about ways to control the growth in its cost that would align with the great value we place on having a diverse community. </p>

<p>The process of setting the College’s price is complicated and at odds with how the world generally works. Since we live with this system every day, we tend to forget that outside of Williams and a small number of similar colleges, there may be no business or organization that charges for its goods or services only what an individual can afford to pay. That is amazing. (More so when you consider that even the top price that is charged covers only about half of what the College spends per student.)</p>

<p>The system has worked remarkably well. We have been able to make the benefits of a Williams education accessible to strong students from all economic backgrounds. And, while parents do make sacrifices to send their children here, when we ask them if it was worth it, 98% say yes.</p>

<p>As astonishing as this system already was, it became more so when a few years ago we dropped loans from all aid packages and began to admit all international students without regard to their ability to pay.</p>

<p>We could take those steps because our endowment had been growing at quite an amazing rate. Since that is no longer the case and apparently will not be the case again anytime soon, the College has needed to cut expenses virtually everywhere. Given the value we place on affordability, the only exception has been financial aid, which grew again this year (by about 12%) and will grow next year.</p>

<p>What we have explored are ways to control the growth in overall spending on financial aid that would be consonant with our commitment to broad financial accessibility. One way was to reintroduce modest loans in the aid packages of some students. Families with low incomes will still not be expected to borrow. When, beginning with the Class of 2015, we go back to something that resembles the loan program that was in place until fall of 2008, Williams will continue to be attractive to students of all incomes and we will have a wonderfully strong and diverse student body.</p>

<p>This will also be true as we begin to admit international students somewhat differently than we have in recent years, beginning with the class entering this fall.</p>

<p>Until the Class of 2006, Williams each year maintained two pools of international applicants: those who had applied for aid and those who had not. We admitted only a few who had applied for aid. All other admitted international applicants were among those who could pay the full fee. For the last several years we admitted international applicants without regard to their ability to pay. We also let the percentage of international students in the class drift up to a range of 5% to 8% (though one year it topped out at 9%); any higher would have been financially unsustainable. This enabled us to matriculate a cohort of international students with significantly more presence and diversity, to the great advantage of us all.</p>

<p>But as a result, the cost of international aid in the last decade rose by more than 200% (more than $4 million). In the College’s changed financial situation, that rate of growth is unsustainable. One way to reduce it would be to have fewer international students. But no one wants that and no one wants it to be the case that all of our international students are able to pay the full fee.</p>

<p>The way to avoid either of those outcomes is to use intelligently some form of need-awareness for international applicants. This does not mean going back to the two-pool system in place before the Class of 2006. It also does not mean that the Financial Aid Office will compute the need of each international aid applicant and the Admission Office will then admit the most desirable international applicants until the aid runs out.</p>

<p>The Admission Office will know which applicants have applied for aid, as it does now, but will not know the level of each applicant’s need. The office will then look at the international pool as a whole and aim to build an entering cohort that is not only academically strong but that is geographically and economically diverse and that in terms of aid approximates a rough dollar target that will begin where it is now and grow over the years at a rate slower than it has been. This new system should result in entering cohorts of international students that roughly resemble the one that we are blessed with now and at a rate of cost increase that is sustainable. When four classes have been admitted this way the increase in our international aid budget should be about $1.2 million less than it would have been. We do not expect this change to affect dramatically the pool of international applicants, which is extremely strong. </p>

<p>I understand how unsettling it is for many members of our community to have to contemplate altering our aid practices somewhat. Even with the changes we have adopted, however, the system by which Williams determines how much to charge aided families will still be among the most generous in the history of higher education, as it should be, and among the most amazing anywhere in the broad economy. And we will continue to serve and to benefit from a wonderful and diverse community of students.</p>

<p>With regards,</p>

<p>Bill Wagner
Interim President

</p>

[OldWell]

<p>Many people will argue otherwise, but these seem like pretty dramatic changes. Williams must have gotten hit hard.</p>

[standrews]

<p>Everyone got hit hard, some harder than others.</p>

<p>Worst to best performance of the 50 largest endowments
(% change July 1, 2008-June 30, 2009)</p>

<p>-29.8 Harvard University MA
-28.6 Yale University CT
-27.5 Duke University NC
-26.9 Grinnell College IA
-26.7 Stanford University CA
-26.6 Brown University RI
-26.4 Cornell University NY
-26.1 California Institute of Technology CA
-25.7 Pomona College CA
-25.6 University of Southern California CA
-24.8 University of Texas System TX
-24.8 Northwestern University IL
-24.3 The Rockefeller University NY
-24.0 University of Rochester NY
-23.7 The Texas A&M University System & Foundation TX
-23.7 Washington University in St. Louis MO
-23.7 University of Washington WA
-23.7 Tufts University MA
-23.4 Amherst College MA
-23.2 University of Chicago IL
-23.2 University of Toronto ON
-23.0 University of Notre Dame IN
-22.8 Princeton University NJ
-22.8 Trustees of Dartmouth College NH
-22.7 University of Virginia VA
-22.1 Williams College MA
-21.7 Johns Hopkins University MD
-21.6 Rice University TX
-21.4 Wellesley College MA
-21.3 University of Pittsburgh PA
-20.9 Emory University GA
-20.9 University of Wisconsin Foundation WI
-20.7 University of Michigan MI
-20.7 Indiana University and Foundation IN
-20.7 Pennsylvania State University PA
-20.7 University of Minnesota Foundation MN
-20.6 University of California CA
-20.6 Case Western Reserve University OH
-20.4 The Ohio State University OH
-20.1 Swarthmore College PA
-19.8 Columbia University NY
-19.7 Smith College MA
-19.0 University of North Carolina at Chapel Hill & Foundations NC
-18.9 Vanderbilt University TN
-18.0 Michigan State University MI
-17.8 Trustees of Boston College MA
-16.8 Trustees of the University of Pennsylvania PA
-16.8 University of Richmond VA
-16.0 Purdue University IN
-15.4 New York University NY</p>

[interesteddad]

<p>Evaluating how a college weathered the storm requires looking at more than the endowment losses. For example, Harvard’s problem is not the endowment losses, but severe liquidity problems due to cash call commitments and the cost of untangling underwater interest rate swaps.</p>

<p>Nothing in Williams financials suggests severe problems. Endowment losses, cash call commitments, debt, liquidity, and endowment spending rates all fall towards the mild side of the ledger. The only real issue might be that almost all of the debt is variable rate and therefore at risk of being costly as inflation sets in.</p>

<p>I would say that reducing the cost of international aid was inevitable. Williams was only getting, on average, $5000 of revenue from each of their international students. That bleeding had to be stopped.</p>

<p>Ending no-loan is a little harder to evaluate. All of the top schools are looking to slow the rise in aid discounting and “get back” a bit of the $2000 per aid student bump they incurred going need blind. Most have decided on a partial offset – for example, bumping summer earnings requirements by $600, but leaving no loan in place. Faculties have been pushing to end no-loan.</p>

<p>I still believe that Williams is in solid shape and is simply making priority choices to cut spending in some areas and preserve spending in others. I do think it is possible that they have a more serious spending-side problem than I’ve been able to see. They really haven’t released any kind of comprehensive budget-cutting plan with enough management discussion to really know.</p>

[standrews]

<p>interesteddad,</p>

<p>That’s a good point about the composition of the portfolio. Performance for the current fiscal year will be a better reflection of the strength or weakness of college endowments. President Wagner’s statement, “…our endowment had been growing at quite an amazing rate. Since that is no longer the case and apparently will not be the case again anytime soon,” comes after a 22% gain in the DJIA and NASDAQ since June 20, 2009. This is a sobering assessment, not just for Williams but the economy at large, and with it the likelihood of greater student need and stagnant annual giving.</p>

[Sam_Lee]

<p>standrews,</p>

<p>Looking at endowment loss % only gives you a very limited picture. Another thing you have to look at is how much Williams has relied on its endowment income to cover its operating expenses. Some schools may lose larger faction but don’t have to scramble as much because their operating revenue depends less on the endowment income.</p>

[TheRoad]

<p>This must really suck for international students who needs lots of financial aid and applied to Williams banking on the fact that it was need-blind.</p>

[mythmom]

<p>Very, very schools offer this and no one is entitled to it. Yes, I am sure it is a disappointment to some.</p>

[gary7]

<p>Only thing that surprises me is why do they do this in the middle of decision making? Also, I remember Williams as the only univ that asked for family income on the supplement for the fee waiver :-/ Was this planned?
Either way, this hurts :(</p>

[ashbert]

<p>indeed it does gray.I was really counting on williams</p>

[gary7]

<p>Haha, its ‘gary’. Not my real name anyway, so nvm :P</p>

<p>I guess the aid requiring students will be fighting for some 35-40 spots?</p>

<p>I guess thats 1-2 from India :-/</p>

[HorseRadish]

<p>Disce quasi semper victurus vive quasi cras moriturus</p>

[gary7]

<p><em>stares blankly</em></p>

[QuasiProfound]

<p>This is sad. The only reason I applied was need-blindness. Ah well. Never pick a school to apply to for less than two reasons, people.</p>

[srrinath]

<p>Now I don’t feel so terrible for missing the financial aid application deadline at Williams. :)</p>

[gary7]

<p>My reasons- tetris and FA
■■■</p>