Being Blind To Financial Need: Is It Worth It?
MICHEL MARTIN, HOST:
I'm Michel Martin and this is TELL ME MORE from NPR News. Coming up, music mogul Dr. Dre donated millions to the University of Southern California and some people are asking why he didn't direct some of his dollars and cache toward an historically black college that helps educate the fans who've supported him all these years. We'll talk about that in just a minute.
But first, we have another story about money and higher education. Millions of college students depend on loans and grants to get through school. Increasingly, though, universities say that they are too strapped for cash to continue to offer admission to students without regard for their ability to pay.
It turns out that fewer than 50 schools around the country say they're still able to admit students without considering their financial needs first. Grinnell College in Iowa is still one of those schools, but it could have gone the other way. In a heated vote earlier this year, the board considered stopping its need-blind admissions policy but ultimately decided to affirm it.
We wanted to talk more about that decision and whatever else is on his mind, so we've called Grinnell's president, Dr. Raynard Kington, and he is, in fact, a medical doctor as well as the college's president.
Welcome. Thank you so much for joining us.
RAYNARD KINGTON: My pleasure to be here.
MARTIN: And I understand that students graduated this week. Congratulations on the end...
KINGTON: Thank you very much.
MARTIN: ...of another school year. How was it? What was the highlight for you?
KINGTON: Well, we had a wonderful commencement speaker, Sarah Kay, a 24-year-old well-known poet, and she was great. And we also started a tradition of giving an honorary doctorate to a teacher from kindergarten to 12th grade who had an incredible influence on our students. So both were great elements of the commencement.
MARTIN: Oh, it sounds very refreshing. So this whole debate over need-blind admissions, which is what this is called, actually took place over an 18 month timeframe. How did it start that this discussion took place? It actually involved, like, the entire Grinnell community.
KINGTON: Yes, it did. Well, it began with an analysis of our financial position and we showed that the average need of our students and the amount of need per student were both increasing at a rapid rate, and so while we were not in crisis by any means, we decided that we would take a pause before we got into trouble to sort of do a deep dive, engage all the various constituencies, the board of trustees, students, faculty, alumni, and really think about whether or not we could afford to admit students, continue to admit students without regard to need.
And the second part of that is equally important and that is to actually commit to meeting their financial - 100 percent of their demonstrated financial need - if they got in.
MARTIN: How long...
KINGTON: And so it's two parts.
MARTIN: How long has Grinnell been need-blind and how has Grinnell been able to afford to be need-blind through this point?
KINGTON: Well, we began it around 1980 and it was when a number of schools and that began around then - largely, initially, really as a marketing tool to try to impress upon students who had - who were disadvantaged or had large financial needs that they would be fairly considered and given opportunity at schools like Grinnell. So it began around then and we've been able to do it largely because, you know, there are three financial streams of schools like Grinnell. One is an endowment. Two is tuition revenue and three is for fundraising.
And of the three we have one that is significant and that's our endowment. We have one of the largest endowments per students among liberal arts colleges like Grinnell, but for both of the other metrics, how much we get on average from students and in terms of tuition and fees and fundraising, we're almost at the bottom compared to almost any of our peers, so it's that tension that really caused us to ask this question.
MARTIN: As part of the deal, the college raised the loan limit for students from $3,000 to eventually $5,500. That's the maximum that students will have in loans after four years. That's still quite low by the standards of a lot of other institutions, and I think, you know, overall are you satisfied with how this whole decision came out?
KINGTON: Well, yes. First of all, that's the loan cap per year. Right now graduates of Grinnell graduate with the lowest average debt of any college in the state of Iowa, public or private, and lower than almost - many of our private peers. And so we raised the limit as a part of the response. And I was pleased with the outcome because the board actually a sophisticated answer. The board's response was, one, we think we can continue to do this.
It reflects our values and a commitment to access and assuring a diverse student population. But there was a caveat and the caveat was we're going to come back in two years and even with those - that commitment to our values, we can't continue just increasing the amount of aid we give every year and that we have to slow it down. And so we're going to look back in two years and see if we've been able to level off our aid, amount of aid we require every year.
Right now we spend more than 40 million a year on aid to our students. You know, one metric of aid is what's called a discount rate. It's sort of how much you essentially give back to students in the form of aid as a percentage of your tuition fee. Our discount rate is around 60 or 61 percent, so that means for every dollar of tuition, that fee that we have, we actually discount 60 percent of it back in the form of aid.
But we're the - there's only one other school that's need-blind and meets 100 percent of need that has a higher discount rate that we've been able to find out, and that's Harvard, which has an endowment of $31 billion.
MARTIN: And is, I think, the nation's oldest university, has kind of a long - kind of a long lead time, right, in getting to a strong financial position. Before we let you go, though, in the time that we have left, I wanted to ask if you would just talk more broadly about the whole question of college, what it costs and what it's worth. I mean on the one hand, you know, we now have an economy where a college degree is kind of a baseline credential for most people, particularly for middle class jobs, and yet we also have people questioning whether college is worth it, that the cost of college has increased so exponentially in recent decades, even compared to the increase in inflation, that some people are even questioning whether it's worth it now.
And you've got wealthy donors suggesting that, you know, that people should consider other avenues. They're offering, you know, fellowships for people to take time off from college or forego college and use that time to invent something. I just wanted to ask you if you and the trustees, in the course of this conversation, thought more broadly about why college costs as much as it does. Should it cost that and is there something that can be done more broadly to make college more affordable or sustainable?
KINGTON: Well, that's a great question. Well, first of all, the costs are going up because of the close, heavily person-laden cost of providing care - providing education, particularly because we have highly educated people who work in small groups at institutions like Grinnell, and that drives a lot of the cost, because technology, unlike many other industries, technology really hasn't reduced our cost.
But sort of the community that's beginning to question the value of a college education is largely a fringe group, I would argue, because I would argue that the evidence remains extremely compelling that a college education remains an extraordinary investment, and the fact is obtaining a college education is the most effective way for individuals to grow and to actually be an engine for economic transition from lower class to middle class and beyond.
So for individuals who - college remains the engine of social mobility in this country, and that's just the fact. And even in the face of the incredible recession that we've been going through, college educated individuals still had a substantially lower unemployment rate than those who were not college educated. And that's just the economic return.
I think there's also a great return in terms of enriching the lives of students and exposing them to a complicated world, so I would argue that the evidence is still compelling that a college education is a great investment and it is the engine for economic mobility in this society.
MARTIN: Well, Dr. Kington, I hope we'll speak again.
KINGTON: My pleasure.
MARTIN: Dr. Raynard Kington is the president of Grinnell College in Iowa. He was with us from Iowa Public Radio in Des Moines. Dr. Kington, thanks.
KINGTON: Thank you very much.