Last year, when everyone was predicting doomsday scenarios for the economy, many colleges worried they would not be able to get enough freshmen. But now that the economy is showing tentative signs of rebound, many schools worry they went too far. From U.S. News and World Report comes the surprising information that colleges now appear to have been too generous with their financial aid offers:
College aid officers are planning to ratchet back offers under the belief that families can afford more than the colleges had estimated last year. And the improvements in the economy haven’t yet benefited many state and charity budgets. In fact, budget-cutting states are raising tuition at public universities and, often, reducing scholarships. California undergrads have been protesting the University of California’s plan to raise student fees by about 32 percent, or about $2,000, over the next year, for example. And Michigan lawmakers are debating whether to eliminate that state’s Promise scholarships of up to $4,000.
Well great. Just because the economy shows signs of recovering does not mean that has translated into more money for parents to pay for college. Many families are still waiting for their recoveries to kick in.
Apparently almost a third of American colleges gave out more much financial aid last year than they could afford and actually suffered declines (despite record enrollments) in revenue. So for 2010 colleges are expected to both raise tuition again and actually give less generous financial aid packages.