By Eric Gorski, AP Education Writer
In the past year, the nation's private colleges have laid off staff, shelved construction projects, slashed sports teams and turned down thermostats to cut costs. But student financial aid has kept flowing.
Now the weak economy is forcing some institutions to limit their generosity after many of them doubled or even tripled financial aid over the past decade to attract more applicants and reduce student debt.
Two of the nation's most selective private colleges — Dartmouth and Williams — announced they would no longer offer aid packages that allow students of any income to attend without taking out loans. Other schools are expected to follow suit, meaning many middle-class students will have to take on more debt.
Situations vary depending on the school, but experts expect financial aid at private schools to be less generous than last year while colleges increase tuition by 4% to 6%.
Many colleges dipped into savings last year to substantially increase student aid out of concern their enrollments would plunge because of the economic downturn — fears that went unrealized at most schools."There's a bit of a feeling that in increasing aid, maybe colleges went a little overboard because there was a lot of panic a year ago," said Roland Kinge, vice president of public affairs for the National Association of Independent Colleges and Universities. "I think it's going to be a more austere year."
On Monday, Dartmouth College in Hanover, N.H., became the latest prestigious private institution to announce sweeping cutbacks in the wake of the recession. The Ivy League school said it will lay off about 76 staff as part of a plan to close a projected $100 million budget gap.
The Dartmouth board also approved a 4.6% increase in undergraduate tuition, room and board, and fees, raising the annual tab to $52,275 — the smallest increase in the past five years, officials said.
The school said it would increase its financial aid budget 10% to help offset the tuition increase. But one big part of the aid program will be cut: The plan to offer loan-free financial aid for students of all income levels beginning with the class entering in fall 2011."The simple reality is that we just can't afford that anymore," said Dartmouth President Jim Yong Kim.