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The Badger Herald

Independent Student Newspaper Since 1969

The Badger Herald

Independent Student Newspaper Since 1969

The Badger Herald

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Study examines financial-aid distribution

In a recent story The New York Times conducted a comprehensive analysis of how federal financial aid was distributed in the 2000-01 school year, comparing allotted expenditures for colleges and universities nationwide.

When the University of Wisconsin’s financial-aid system was examined, there was a sharp contrast between UW’s allotment of 21 cents per applicant for Perkins loans and Stanford’s $211.80 per applicant for the same loan.

Steve Van Ess, UW director of the Office of Student Financial Services, said he does not dispute The New York Time’s system of comparison, but the 2000-01 school year was a transition year for UW and is not representative of UW’s financial-aid system as a whole.

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In the years leading up to 2000-01, UW had always applied for federal funding jointly with UW-Green Bay. When UW and UW-Green Bay split, UW decided to give the $63,000 in federal funding for Perkins loans to Green Bay. Later that year, UW received an additional $3,600 in supplemental federal funding. The $3,600 was the amount used to calculate UW’s figures in The New York Times story.

When the $63,000 is included, the amount of financial aid per person is $3.78.

“The initial impression you get is that UW is at the bottom of the pile,” Van Ess said. “But UW is getting its fair share, especially when you factor in the revolving funds involved in Perkins loans distribution.”

Revolving funds are loans from past years owed to the university and paid back yearly by students.

Van Ess said past recipients owe UW $67 million and that the university receives about $15 million annually. UW uses its revolving fund money to supplement what it receives in federal funding for Perkins loans, so the actual per student recipient amount is $821.

However, other colleges have large revolving funds also, and some colleges have even larger endowments but still receive more funding. Harvard and Yale Universities both have endowments of over $10 billion.

As discrepancies between the funding received by well-established universities and relatively new universities circulate, some groups are calling for the implementation of a new allocation.

In The New York Times article, Dallas Martin, president of the National

Association of Student Financial Aid Administrators, said that the federal loan and grant money ought to follow where students are, and politics should be removed from the equation.

Van Ess said the issue is more complicated than that.

“There are two groups of schools, the older, more well-established schools who have alumni and a past to speak for them. And then there are the new schools who also want funding but don’t have the prestige of the older schools,” Van Ess said. “And of course each school has needy students.”

Van Ess added that the current formula for loan distribution would work if the funds are not increasing and there is not enough new money.

UW senior Anna Cianciara agreed that some things need to be changed within the current financial-aid system and feels that there is a demographic the current system passes by, noting that both her parents have good jobs, a house and a car.

“The government says my parents make too much money in order for me to be eligible for a significant amount of aid,” Cianciara said. “I have two jobs, and my parents don’t pay for anything. But that isn’t factored in at all, which I don’t think is fair.”

Despite what some think, Van Ess said he does not think politics plays a significant part in the distribution of loan money to universities.

“The result shouldn’t be based on politics but on reason. But the fact that this is being examined means it’s on somebody’s agenda,” Van Ess said.

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