College announces $3.5 million increase in financial aid budget for upcoming academic year
April 23, 2021
The College announced on April 12 that, starting in the fall, it will be expanding its evaluation of student financial need—a decision that is expected to increase the student aid budget by an average of $3.5 million each year. The largest such increase in student aid for the College in recent history, the decision will allow the College to eliminate the current summer work expectation and replace it with grant support for students with a combined parental income below $75,000.
“Bowdoin is always seeking ways to make the College more affordable for students and their families. The recent announcement is our continuing commitment to our students and to address concerns around affordability,” Director of Admissions Claudia Marroquin wrote in an email to the Orient. “The increase to the student aid budget will improve the aid packages for currently aided students and for those who have recently been admitted to the College with a financial aid award. As prospective students learn about Bowdoin’s financial aid policies and our commitment to making the College affordable, we hope that students will continue to see Bowdoin as a feasible option.”
These changes in Bowdoin’s methodology for calculating financial need will most significantly impact middle-class students and families, many of whom have had to appeal their financial aid packages in past years.
“For this particular case … we really focus on changes at the middle class level,” President Clayton Rose said in a Microsoft Teams interview with the Orient. “It’ll affect everybody, but there’s more substantive changes at the middle class level.”
“In particular, we hope that for students who receive Bowdoin grant money in place of a summer earnings expectation, that they will not feel the need to work many hours in addition to the full time summer jobs many of them already maintain to meet other financial obligations,” Marroquin wrote. “As the population enrolling at Bowdoin continues to expand in its socioeconomic diversity, we are responding to the areas where we see students and families feeling the most pressure and are making adjustments to continue to meet the financial need as that continues to change.”
The College allocates funds for student aid in its annual operating budget, which is usually finalized each June 15. While aid payments vary from year to year due to the unpredictable financial needs of each incoming class, the College has data on hand that allows it to estimate what the rough number will be. Although the actual number is always slightly above or below that figure, the College is able to accommodate such deviations by either pulling from operating reserves or saving any remaining surplus.
“The annual budget is prepared and approved prior to the start of the fiscal year and so we must do our best to estimate a number of inputs including those variables that drive the financial aid budget,” Treasurer and Senior Vice President for Finance and Administration Matt Orlando wrote in an email to the Orient. “While a need-blind financial aid policy is inherently challenging, we already have a pretty good baseline on three of the four classes and can see our first-year class begin to take shape by the time the budget is approved in May. So historically our budget tracks pretty well to the actual amount awarded.”
The projected budget increase that the College presented came out of an expansion in the calculus by which the Office of Student Aid calculates student financial need. The increase will allow the College to allocate more funding while considering many variables—such as income, assets, the number of people in the student’s family and cost of living in their area—for each student.
The impacts of the budget increase will be immediately felt by students who already receive financial aid at the College, and Soule hopes that this increase will also signal Bowdoin’s commitment to affordability to future potential applicants.
“As students are admitted and can compare the student aid offered by Bowdoin to the aid package of another school, we believe that Bowdoin’s commitment to affordability will be clear,” Soule wrote.
The College allocated $43.6 million to student aid in its operating budget for fiscal year 2020-21. Even in the context of that number, an additional $3.5 million each year represents a tremendous financial commitment.
“One way to think about it is [through] the endowment,” Rose said. “If we take five percent of the endowment each year to generate $3 million [in additional aid payments], that’s a $60 million endowment. It’s a significant number, and it’s something that we want to do and are able to do.”
As is true for so many of the financial tools the College is able to employ, this budget increase is only possible due to the generosity of donors.
“We’re able to do this because we have great alumni and parents who donate amazing amounts of money, and we have an endowment that’s been stewarded in great ways,” Rose said. “That’s the reason we’re able to … have amazing students here who are able to realize their dreams and have great faculty, and it’s a virtuous circle—everyone wants to be with these great folks. Being able to bring great students, no matter their economic background … we’re in a fortunate situation in that regard, and we know we’re fortunate, and we don’t want to take it for granted.”
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