Paying the Price

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Author: Kerry Temple ’74

Congratulations. You got in. Or your son or daughter got in—one of the 1,985 fortunate ones to enroll at Notre Dame from among the 14,430 applicants. That’s a huge accomplishment. Given the competition and the narrow gateway and the impressive profiles of those who made it and those who didn’t, the achievement is pretty awesome.

Now here’s this, the next step: The average cost for a year at Notre Dame is $46,730. Whoa.

Multiply that four times because it’s likely a four-year deal. Then figure in those annual increases—say 5 percent per year—and you’re looking at a scary sum. Two hundred grand, right?

True, it can be seen as the biggest and most important investment of your lifetime, one that will pay dividends for decades. A Notre Dame education: a four-year experience that will bring enormous and long-lasting gratification, no doubt. And when compared to the costs at similar schools, Notre Dame is in the middle range price-wise. “Way expensive” is just the going rate these days. But right now paying that bill might feel like as momentous of an accomplishment as gaining admission (to say nothing of actually doing the work to graduate).

The good news is that there are people at the University who want to help you make it happen. And they are better able to make it happen than ever before. For one thing, they will tell you (and be able to back it up) that your full financial need will be met. They will tell you that—after you’ve done your part and filled out the forms and had your family finances scrutinized and made a sacrificial commitment to pay your share—the University will make up the difference. That’s right. The University will kick in the rest. That’s a promise that Notre Dame has made good on since 2000, and there’s no reason to think it won’t keep happening.

Last year the University paid out more than $68 million to make sure its students had their full need met. Notre Dame distributed these funds to almost half its undergrads; the average gift was more than $18,600. That doesn’t include athletic grants-in-aid or scholarships brought to campus or ROTC awards. Or the $2.2 million that 138 Notre Dame alumni clubs gave to more than a thousand students last year. Or other sources of aid. About three-fourths of all Notre Dame’s undergrads receive some form of financial assistance.

Here’s how it works:

First, at Notre Dame the admissions process is separate from the financial aid operation. Notre Dame is one of a few highly selective, high-priced, private colleges with “need blind” admissions. So a family’s ability to pay is a consideration distinct from selection procedures.

Notre Dame’s financial aid office gets involved when it sends a letter to applicants, explaining the University’s financial aid policies and inviting them to apply for assistance. Families may then file a CSS/Financial Aid PROFILE Application and a Free Application for Federal Student Aid (FAFSA).

The applications seek a thorough, three-year family financial portrait. It’s not just family income and such assets as home or business ownerships, or stock portfolios. The University wants to know about medical expenses, family size, the number of children in college and what those other tuitions are. If the prospective student has parents who are divorced, the University is interested in the financial situation of mother and father, not just the custodial parent. The idea is to get a clear and complete picture of a family’s financial strength. The purpose is to determine how much the family should be expected to contribute to the student’s education.

Despite the $46,730 figure, there is some variability in the bills each family faces. For example, the price tag includes $9,290 for room and board—for students living on campus, and not all do. The $35,190 for tuition and fees is firmly set, but the remaining $2,250 (after tuition, room and board) includes estimated costs for books and supplies, transportation, and personal expenses. These costs vary person to person.

Partnering with the family

Notre Dame doesn’t offer a full ride. There are no merit scholarships to lure exceptional students into the mix—a kind of enrollment incentive many schools use to boost the quality or character of its student body. Notre Dame’s commitment is to meeting the full need of those students admitted who really want to be here. “It starts with the student and the family’s investment,” says Mary Nucciarone, an assistant director of financial aid. “Then Notre Dame partners with the family. But it does begin with self-help.”

Notre Dame brings more to the partnership, though, than ever before. The $68 million disbursed last year will grow past $72 million this year. That’s a significant increase in undergraduate scholarships since the $27.8 million awarded during the 1999-2000 school year. Perhaps more important: Even though Notre Dame’s tuition has gone up almost 60 percent since 1999, the amount the University has given in scholarship aid has grown by 160 percent.

“We can now look a student in the eye,” explains Joseph Russo, Notre Dame’s director of student financial strategies and longtime financial aid director, “and say that if you are admitted and you want to come here, then we can make this happen. It might be hard and it might mean some sacrifice, but you will be able to afford it.” That was not always the case. Just a few years ago, says Russo, high school counselors would discourage students from applying to Notre Dame. “In the past,” he explains, “they’d say, ‘You won’t be able to afford it.’ Now they say, ‘Apply, because you will be able to go.’”

The recent dramatic improvement in Notre Dame’s financial aid offerings reflects the University’s commitment to helping its students as well as a growing and well-managed endowment and the generous support of benefactors. And it’s paying nice dividends—for the students and Notre Dame. The result has been a significant increase in the number of applicants and a much more competitive admissions process and an even better student body. Minority enrollment has gone from 13 or 14 percent a few years ago to almost a fourth of the Class of 2011. And the University is conscious of maintaining a broad socioeconomic mix among its students, wanting the applicant’s achievements to get them enrolled, not family income.

The application process with its family financial profile and formulaic calculations may provide one large piece of the equation. But every student’s file is read at least twice, and Notre Dame’s counselors use their own judgment, examining each case individually. Scholarships are awarded according to academic performance and need, and each student’s circumstances are reviewed annually. A death in the family or a sibling graduating from or entering college may prompt an adjustment.

After the financial evaluation, the University works with the family on a strategy for covering costs. Families seeking University scholarship assistance are expected to first take out one or both of two federal loans—a Stafford or Perkins—as well as to accept a campus job for up to 12 hours per week. About half of the students who graduated in May 2007 had borrowed from one or both of these federal loan programs, with an average indebtedness of about $18,300 (the default rate among Notre Dame alumni is less than 1 percent).

The financial package may also contain a student-employment element; about 45 percent of Notre Dame’s students work on campus to help pay their way. Financial aid counselors will also work with families to determine other avenues of support—the array of outside scholarships available to them, other sources of affordable loans and some payment plan alternatives.

“The family pays first, and a certain level of sacrifice is expected,” says Nucciarone. “Families do have to make choices. My job is to look at the basic living need of the family and then what do I have to do to make this work. What does the family need, without being overly generous and not giving excessive allowances, so that anyone who wants to come here can? It’s often a question of assessing a family’s ability to pay versus their willingness to pay.”

A case study

To illustrate the process Nucciarone offers the case study of a family whose contribution—based on the CSS PROFILE and counselor review—is $16,730. That leaves $30,000 to cover those $46,730 annual costs. The “self-help” portion could also include a student job that might bring in $2,400 and a federal Stafford loan of $3,500. A second loan—a $4,000 Perkins loan—could be added, leaving a “need” of $20,100. The student would then receive from the University a scholarship in the amount of $20,100. The family would be making a real commitment and a hard-earned contribution to the student’s education. And Notre Dame’s $20,100 scholarship would fulfill its commitment to meeting each student’s “need” and would surely be a welcomed boost for those families climbing that $46,730 mountain.

And if, say, the student got a $4,000 scholarship from her local alumni club, that could eliminate the need for the second loan (rather than being deducted from the University’s contribution). Reducing the number and the dollar amounts of student loans is certainly a priority for University leaders.

Importantly, Notre Dame’s approach, unlike that at some other schools, is not a tuition reduction program by which some students pay a discounted tuition while others pay more to offset those reduced fees. “That’s why the endowment and fund raising are so important,” says Nucciarone.

The story does extend beyond the financial aid office, beginning with the high cost of an institution as ambitious as Notre Dame and a university wanting to be competitive with the best in America. It costs almost $2.5 million per day to operate the enterprise that is Notre Dame. A student’s tuition covers about two-thirds of the real cost of his or her education, says John Sejdinaj, Notre Dame’s vice president for finance. Tuition, he says, generates about 41 percent of the revenues toward Notre Dame’s $900 million annual budget. The rest comes mainly from various auxiliary operations, gifts, endowment income, grants and contracts.

When the University determines the cost of tuition, a complex maze of factors enter the deliberations—including keeping it in the middle range of what similar schools are charging. Notre Dame is aware of the burden its costs impose on a family. That’s why—in addition to trying to keep costs down—it has made such an effort to compensate with more financial aid. To make sure that more students receive even greater assistance in the future, the current Spirit of Notre Dame capital campaign seeks $250 million to be applied toward the endowment for undergraduate financial aid as part of its $1.5 billion goal.

Even though most students and their families have to work hard to cover the cost of attending Notre Dame, the University is nationally recognized as a “best value” among its highly selective peers. So congratulations. You’re in. Now you just need to put the financial package together and get the most out of everyone’s investment in your Notre Dame education.

Kerry Temple is editor of this magazine.

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