The Critical Role of Financial Aid

Affordability, access, and the enduring strength of the college

Many readers surely know the power of financial aid to provide the kind of access and opportunity that can transform individual lives. Indeed, such stories abound in higher education and at Trinity, stories like that of Kara R. Douglas-Newman ’08, who couldn’t have attended Trinity without significant financial aid, and who went on to earn a Ph.D. and to work as a licensed clinical psychologist treating America’s veterans. And Timothy J. Walsh ’85, P’15, whose trajectory was so altered by Trinity that he felt inspired to give back, creating endowed scholarships that pay forward the generosity that allowed him to benefit from a Trinity education.

It may be less obvious that financial aid plays a critical role in the college’s overall strength. Increasingly, financial aid is the key to recruiting a talented student body that reflects society—not only providing opportunities for individual students from all backgrounds but also ensuring the relevance of the educational experience Trinity provides and the value of that education to our world.

Trinity has one of the most generous financial aid programs in the country and is one of fewer than 100 colleges that meet the full demonstrated financial need of all of its students. And in recent years, Trinity has dramatically increased both the amount of aid provided to students and the percentage of students receiving aid. Fully 60 percent of Trinity students receive financial aid today, and the average annual grant is more than $40,000.

The investment is paying off, as Trinity enrolls classes that are the most diverse and strongest academically in the college’s history, with students from all over the world and from all socioeconomic backgrounds increasingly naming Trinity as their first choice and finding stimulating engagement in the classroom, on campus, and in the Greater Hartford region.

Competition for these students is stiff, and the investment in financial aid is significant—now more than $50 million a year at Trinity. Looking ahead, shifting demographics, continued public disinvestment in higher education, and increasingly price-conscious families combine to create a challenging future for all colleges offering this high-tuition, high-cost model of education. For perspective, The Reporter brought together three experts for a conversation about financial aid. Nathan Mueller is a principal with EAB, a national enrollment management research firm and higher education consultancy. Angel B. Pérez is Trinity’s vice president for enrollment and student success. Michael Casey is Trinity’s vice president for advancement.

First, give us a sense of the national picture of financial aid awarded by colleges like Trinity. How have the amount of aid and the percentage of students receiving aid changed over time?

NM: The commitment to aid has grown dramatically, and because federal and state sources of aid have not nearly kept pace, the growth in financial aid has been almost entirely on the shoulders of colleges and universities. According to the College Board, the average college-funded grant aid for first-time freshmen at private colleges rose more than 70 percent in the last decade, from $8,850 in 2004–05 to $15,080 in 2014–15 (adjusted for inflation). And about 90 percent of new students at four-year private colleges now receive financial aid.

Why have we seen those changes?

NM: Rising college costs, stagnant government support, and trends in family income have combined to change the financial aid picture dramatically over the last 50 years, when the Higher Education Act of 1965 established the foundation of need-based financial aid. Today, just four percent of families with children in college have incomes that would probably put them in the “no-need” category (of not qualifying for financial aid). And even these affluent families face significant financial challenges in paying for college.

In constant dollars (not inflation-adjusted), the average fee for four-year private college tuition, room, and board rose from $4,609 in 1978–79 to $46,150 in 2016–17. During that same time, median income for a family of four rose from $20,462 to $91,036. That means the average private college cost was about 23 percent of the typical family’s income 40 years ago and now is more than half of what the average family earns. So, colleges have responded by committing more and more financial aid every year—both to meet the rising need and to compete for top students.

So, how important is financial aid in providing access and opportunity?

AP: For the past several years, 75 percent of students applying to Trinity have applied for financial aid. As the demographics in the United States continue to shift and fewer families can afford to pay the full comprehensive fee, financial aid will be the key to ensuring the access to and affordability of a Trinity education.

Trinity recently announced a comprehensive fee increase of 3.9 percent for next year, which will push the total cost over $70,000 a year. That’s a huge amount of money. How can we say we’re affordable?

AP: You’re right, it is a huge number. But every time tuition goes up, we increase the amount of financial aid we provide to cover the difference. Trinity is one of fewer than 100 colleges in the country that meet 100 percent of the demonstrated financial need of all of our students. So, if you’re admitted to Trinity, we do everything we can do make sure it’s affordable for you to attend.

We know that tuition rates have been climbing faster than inflation for years, but with financial aid factored in, have tuition revenues also outpaced inflation?  

NM: Taking into consideration schools’ discount rates, the average net cost paid by families—the revenue that colleges receive—has essentially just matched Consumer Price Index (CPI) inflation.

How does Trinity’s financial aid program compare to its peers’?

AP: As I mentioned earlier, we’re fortunate to be among a small group of schools nationally that meet the full financial need of admitted students. Our average annual grant is more than $40,000, double what it was a decade ago. Our discount rate (the percentage of tuition and fees we don’t collect because it’s provided to students as financial aid) for all students in 2016–17 was 40 percent, which is 4 percent below the national average. 

So, for more than half of all Trinity students, the cost to attend is nowhere near the comprehensive fee?

AP: Correct. For Trinity students receiving financial aid, the average net cost is $23,000 a year. For our lowest-income families (those who qualify for Pell grants and now receive four-year financial aid awards from Trinity), it costs less for four years at Trinity than it does for one year at many state institutions.

What’s the role of philanthropy in Trinity’s ability to provide financial aid?

MC: Put simply: it is essential. Trinity currently has 419 endowed funds valued at more than $167 million. That support is changing hundreds of lives—dramatically and directly—for the better. But that’s only the half of it. There’s also the benefit—and it is significant—that accrues to the donors who have an opportunity to see firsthand the impact of their generosity and their investment in the future of these students. How often do we really get to see our efforts, our work, have such a palpable, meaningful, and lasting effect? Finally, there is the broader impact that this pay-it-forward ethos has on our entire community. Our success as a community is directly related to our willingness to support and help others, and there are few places where we can see that dynamic at work as clearly and powerfully as we do when individuals have stepped forward to provide scholarship support for future generations. That’s why financial aid will be the most significant element of our new comprehensive campaign.

Is Trinity “need blind?” If not, why?

MC: Unfortunately, no, or, rather, I should say “not yet.” Fewer than 50 colleges—out of about 3,000 nationwide—have the resources to be need blind in their admissions policies and meet the full financial need of their students. It is, indeed, our long-term goal to be among them. What Trinity can and does do is meet the full need of every student we admit and for all four years, at a sufficient level that they should not graduate with heavy debt burdens. That’s especially important, so that students’ postgraduate career choices are not unduly shaped by the weight of their undergraduate loans. Trinity students graduate with an average of $20,000 in student loans, which is about 25 percent lower than the national average.

Let’s talk about demographics. How are the demographics changing with respect to the number of students overall in the United States and where those students will come from? How will incomes change?

NM: The number of students graduating from high school in the U.S. each year has plateaued, and in a few years that number will drop fairly quickly—by 4.5 percent over the next decade. Meanwhile, the number of white, non-Hispanic students will decline by 9 percent between now and 2027, while the number of Hispanic high school graduates will increase by 11 percent. In Massachusetts, New York, and Connecticut combined—the three states with the highest representation among Trinity’s student body—the number of white high school graduates is expected to decline by 16 percent in the next 10 years, while the number of Hispanic high school graduates will grow by 28 percent. As those demographics shift, we’ll see colleges commit more and more to financial aid, both to meet increased need among changing populations (Hispanic family incomes are typically significantly lower than white family incomes, for instance) and to compete for a shrinking population of college-going students.

What will all of that mean for tuition rates? Is there a ceiling?

NM: We often hear the word “unsustainable” used to describe college tuition increases. I think that families are increasingly decoupling their college selections from the published price. That is, what a family pays depends on their financial need and colleges’ varying abilities to meet their need. So, there may not be a discernible ceiling on tuition rates—the “sticker price”—but there certainly is a limit to how much families can pay and how much colleges can discount their rates. With fewer students overall and fewer families that will be able to pay the full sticker price, colleges will have to find more ways to control or cut expenses and find different revenue streams.

How can Trinity continue to attract top students and deliver a distinctive, high-quality liberal arts education?

MC: Certainly, we must continue to increase our financial aid resources, both by growing our endowment and through annual contributions to the Trinity College Fund. But that’s only part of the equation. We also must control the growth in our expenses and cultivate new sources of revenue. And we have to ensure that a Trinity education is worth the investment—that the particular set of educational, social, and cultural opportunities we offer is relevant, flexible, and valuable. Lastly, we have to clearly demonstrate that value and the many ways that it endures long after graduation.