Aiding Students, Buying Students: Financial Aid in America

8. New Strategies

142   8 New Strategies College Chooses In late 1993, Oberlin College, Ohio, bit the bullet, or abandoned its principles, according to one’s point of view. It decided to limit its intake of needy students by instituting “need-aware” admissions. It also established a major new program of merit scholarships not requiring need. Under financial pressures and the influence of new market-driven strategies, other colleges made similar moves, but they were not made easily. Oberlin’s journey dramatized the troubled history of student aid in the 1980s and 1990s, especially among elite colleges that were somewhat weaker than the market leaders. The leaders in turn were given pause by what the others did. Oberlin, it must be said, was never a typical liberal arts college. Known throughout its history as a nursery of social activists—from abolitionism in the 1830s to 1850s to pacifism in the 1930s and gay rights and other issues today—it was the first American college to coeducate men and women to degree level and admit black students on a regular basis. Both took place soon after its founding in 1833. On race as well as gender, it was not immune to prejudices of the larger society, but it eschewed fraternities and sororities, and its ethos—among students as well as administrators —generally valued social openness.1 (Harry Colmery, the liberal lawyer who largely wrote the GI Bill, was, fittingly, an “Obie.”) In 1964, with Rockefeller Foundation money, Oberlin became one of the first colleges to organize precollege campus programs for inner-city high school students.2 New Strategies  143 Oberlin has also identified itself with academic and artistic excellence. Since the 1920s, unusually high proportions of students have gone on to get Ph.D.s; it has an outstanding art museum; and its famous Conservatory of Music, founded in 1865, enrolls some 400 of its 2,800 students.3 As much as any college, therefore, Oberlin has felt a dual commitment to access and excellence. Both obviously cost money—the first for financial aid, the second for faculty, facilities, and again financial aid, to widen the talent pool of applicants. By most standards, Oberlin has had a big endowment and a prestige that commands high tuition fees, but the pack it has wanted to run with—a group of elite colleges, mainly in the Northeast—has richer alumni and larger endowments per student.4 And in the 1970s, Oberlin lost some of its distinctive image when the Ivies and other elite male colleges started admitting women and made special efforts to recruit black students and other minorities. These challenges were not unique to Oberlin. Women’s colleges, too, were threatened when male colleges went coed, and in a culture of constant upgrading and competition, many college administrations spend a lot of time eyeing stronger institutions as well as those coming up from below.5 Liberal arts colleges as a whole became more anxiously competitive in the 1980s as the number of high school graduates leveled off—a trend made worse by a longer-term shift among four-year college students toward vocational subjects rather than arts and sciences.6 Faced with these pressures, Oberlin did not cut prices: to do so would signal weakness and require cutbacks in what it offered. Instead, it followed the tuition increases of its peers and market leaders. From the early 1980s private-college tuition fees began to go up faster than most family incomes. We will look later at the reasons for this, but it meant that more students qualified for more financial aid on the basis of need. Oberlin, which had ostensibly been practicing “need-blind/need-met” admissions and financial aid in most years from the early 1970s, saw the scholarships item in its “Educational and General” budget grow from 12 percent in the early 1970s to 20 percent in the early 1990s.7 Yet the college was offering less-generous financial aid packages (smaller grants, bigger loan burdens) than its stronger rivals. In part because of this, Oberlin became less attractive to students and therefore less selective. Between 1971 and 1991 its “admit rate” (proportion of applicants offered places) rose from 44 percent to 68 percent in the College of Arts and Sciences. (The conservatory did better; it took 35 percent in both years.)8 144   part II The Way of Elite Colleges Through the 1980s and early 1990s, Oberlin’s planners twisted...