Weighing costs and changing lives
Part of Scott Seibring’s job as director of new student financial aid is to meet with
prospective students and their families to discuss ways to make college more affordable.
Above, Seibring chats with Tom and Ellen Reid and their son Brad, who were visiting
Saddled with an increased burden to provide financial aid, Illinois Wesleyan faces
tough choices on how to award institutional funds most effectively.
By Nancy Brokaw ’71
Photos by Marc Featherly
Talk about a balancing act.
Each year, Illinois Wesleyan has only so much money for financial aid. Should it go
to students with financial needs? Which ones? How much should they get? How much of
that money needs to go for scholarships to attract top students?
IWU, like most private universities, seeks to find a balance between the two worlds
of financial aid: need-based help to students who cannot otherwise afford to attend
and merit scholarships that entice some of the best students in the nation.
“Financial aid is a way to provide opportunities,” sums up Jerry Pope ’80, dean of
Illinois Wesleyan’s Admissions Office.
It’s helpful to keep that simple — even noble — purpose in mind when delving into
the complicated realities of today’s financial aid policies.
Illinois Wesleyan’s comprehensive student fee for the current school year is $30,380.
Almost half of all IWU students receive need-based aid to help meet that expense.
(The average award for the class of 2006 was $16,298.) At the same time, Illinois
Wesleyan, in an effective bid to lure ever-better students, awards merit scholarships
to more than one-third of its students. These scholarships typically range from $5,000
To put Illinois Wesleyan’s situation in context, awarding merit aid as a tool in admissions
has increased steadily for both public and private institutions. In 1999-2000, the
last year for which data was available, 29 percent of the undergraduates attending
private institutions were receiving merit aid, according to the National Center for
Education Statistics. Illinois Wesleyan officials note that the percentage is even
higher among those institutions with which the University typically competes for students.
A question that’s on many school administrators’ minds these days is this: Does merit-based
aid take away too much money from need-based aid? In 2002-03, the number of first-year
IWU students receiving need-based aid dipped below 50 percent, to 45 percent, for
the first time in recent years.
“We work very hard to help our students with financial need,” says IWU Director of
Financial Aid Lynn Nichelson, “but in the last eight years, it’s become more difficult
to meet students’ demonstrated need, for a variety of reasons.” Merit-based aid is
one factor, says Nichelson, but another is reduced state and federal financial aid
A chart provided by IWU’s Business Office shows the greater percentage of burden that
the University has had to shoulder in financial aid over the past decade. In 1993-94,
University grants amounted to $6.9 million of the $10.2 million total that year in
gift assistance to IWU students. In 2003-04, the projected amount of University grants
was $17 million out of $20.6 million in total grants. In contrast, state grants actually
declined over the same period, from $2.062 million to $2.009 million.
This decline in state and federal aid is an inevitable result of fewer tax dollars
devoted to higher education in an era of economic downturns and government belt-tightening.
It also makes the current examination of merit- and need-based financial aid that
much more important, as University administrators are faced with tough choices on
the wisest way to spend the limited pool of funds available to help finance students’
Dreams behind the data
Lynn Nichelson has been in charge of financial aid at IWU for 41 years. He loves the
job. His days are full of spreadsheets and complex financial data, but are also punctuated
by the joy of assisting a family in making a dream come true.
Nichelson’s first task in working with a family is determining whether or not the
student qualifies for financial aid and, if so, how much. Illinois Wesleyan uses several
diagnostic tools, including a form called the Free Application for Federal Student
Aid (FAFSA), which also measures eligibility for federal and state financial aid.
In addition to the FAFSA, IWU students must fill out the Illinois Wesleyan Financial
Aid Application that is processed free of charge, or the College Scholarship Service
(CSS) form, which is used by many colleges and universities.
Nichelson crunches data from all these documents to find the Expected Family Contribution
(EFC), which is an assessment of how much a student and his/her family will be expected
to contribute to college costs.
“We work very hard to help our students with financial need,” says IWU Director of
Financial Aid Lynn Nichelson, “but in the last eight years, it’s become more difficult
to meet students’ demonstrated need, for a variety of reasons.”
Simply put, the difference between the EFC and the budgeted cost ($30,380) equals
the student’s financial need. To help a student meet that need, Nichelson and his
staff prepare a financial aid package that consists of a combination of three types
of assistance: grants and scholarships (assistance that does not need to be repaid),
loans (funds which must be repaid) and/or campus employment.
Should a student also qualify for a merit scholarship, the amount is considered part
of the financial aid package, not added to it. Many IWU students also bring in outside
awards — local civic club scholarships, for instance — which further reduce their
Acting Provost Roger Schnaitter points out that each year, as statistics are evaluated,
it turns out that among students who have financial need, the conversion rate (those
who sign a contract to come to IWU) has always been highest among those with the highest
need. This goes against the idea that Illinois Wesleyan is a “rich kid’s school,”
an idea Nichelson sharply dismisses.
Pope wishes IWU could always meet 100 percent of a student’s financial need, but there
is not enough aid available to make that guarantee.
“Sometimes,” Pope concedes, “other schools offer a better financial aid package and
the best we can do is to get a student in the ballpark.” In those cases, the staff
works with the student’s family to find alternative financing.
One reason that IWU administrators work hard to “make it happen,” Pope says, is they
know that Illinois Wesleyan can change a person’s life.
Wes Schneider ’75 represents one of those changed lives.
One week before he was set to enroll as a freshman at Illinois Wesleyan, Schneider’s
mother, the parent on whom he depended for financial support, was killed in an auto
accident. Assuming he’d have to be a “short timer” at IWU, Schneider showed up for
his first football practice, where Coach Don Larsen urged him to go straight to the
Financial Aid Office. Schnieder said that Nichelson was able to rearrange his financial
aid package sufficiently to “carry the day.”
Schneider — who lives with his family in Kenilworth, Ill. — now owns Creative Marketing
Communications, a nationally recognized sales promotion agency that counts General
Motors, Bayer, and Nestle among its clients.
“People stuck with me,” Schneider says. “Because of the generosity of the IWU Financial
Aid Office, I was able to stay and graduate.”
“I’m grateful for it [the financial aid] every day,” he continues. “I’m honored by
the attention focused on me at a time when I wasn’t very focused.”
Reward or bargaining chip?
Back in the mid-1970s, when Wes Schneider was receiving need-based financial aid,
Illinois Wesleyan began to follow a new national trend of using merit-based scholarships
to lure higher achieving students.
Looking back, administrators agree, it worked.
By almost any measurement, successive freshman classes at IWU have been ever more
impressive. Applications for admission to the class of 2006 rose to 3,480, of which
only 41 percent were accepted. The average ACT score of this year’s freshman class
One reason merit scholarships work so well in attracting bright students is that they
can be made available early on in the recruiting process. Because qualification for
a merit scholarship is based on a basic matrix (class rank and ACT/SAT score), the
University’s admissions staff can say to a qualifying student before he or she is
admitted that, yes, there will be a merit award offer.
Scott Seibring ’85, director of new student financial aid and associate director of
Admissions, points out that the average merit award is less than the average need-based
award, which represents a cost savings to the University in budget-conscious times.
Another plus for merit aid, and one Pope enjoys, is the fact that a scholarship rewards
hard work by students. “You can see parents’ faces light up when we first mention
it,” Pope says. “It’s like they want to tell their kid, ‘See, we told you all that
hard work would pay off.’”
An additional advantage of merit scholarships, according to Pope, is that the money
may make a crucial difference for some middle-income families (such as land-rich farm
families) who “on paper” show they can afford Illinois Wesleyan. For such families,
sending their child to IWU would be a real struggle without merit-based aid.
Still, Pope acknowledges, finding exactly the right balance between merit aid and
need-based aid is a priority for the University during the process of strategically
planning its future.
Generous merit scholarships are the price of doing business as a topflight liberal
arts university. Many of the schools with whom IWU competes for students, such as
the University of Chicago and Washington University, also offer merit scholarships.
However, this very prevalence of merit scholarships may be reducing their effectiveness.
“It’s not a great academic metaphor,” Roger Schnaitter says, “but if all the car dealerships
are offering zero-percent financing, it ceases to be as big a drawing card for one
\And, ironically, now that Illinois Wesleyan has reached loftier heights in the comparative
college rankings, merit scholarships are actually a drawback for some prospective
students. The highest-ranking schools, such as Harvard, offer no merit scholarships.
As Seibring puts it, “Some people look down on you if you offer merit aid, others
won’t talk to you if you don’t.”
The matrix used by IWU to determine merit-based scholarship eligibility requires careful
calibration. Going back just seven or eight years, Schnaitter says, a student with
a 27 ACT score and an upper-quarter class ranking qualified for merit aid. With the
average ACT score now above 28, and the average high school ranking of the entering
class in the top 9 percent, that same student is now — theoretically, anyway — in
the bottom half of the entering class. Adding to the confusion, class rankings from
high schools can be deceiving, since schools vary widely in academic vigor. And, increasingly,
high schools refuse to give out class ranks.
With these facts in mind, Seibring poses the questions that many Illinois Wesleyan
administrators are now examining: what is the purpose of merit scholarships in light
of the University’s current scholarship and recruitment goals? Should more complex
factors (and therefore a more sophisticated matrix) be used in determining merit aid?
And, another question: might the student offered a merit scholarship have come to
IWU in any case?
Everyone agrees it’s difficult to find the balance. “We can’t get out [of merit scholarships]
easily,” Schnaitter says, “nor do we want to at this point.”
Seibring concurs. “The difficulty is to find where you are in the market and how much
money you need to offer in each individual case.”
There’s a bidding war going on among many universities for the hearts and minds of
the world’s top students.
On the fringes of that battle are some decidedly odd practices. Unity College in Maine
recently hosted its first-ever Fishing for Scholarships contest, in which prospective
students spent seven hours on the water angling for 100 specially tagged fish, including
one with a full tuition waiver.
Among the Ivy League schools, Princeton set off a firestorm a few years ago with the
announcement that it would begin awarding far more financial aid than it had in the
past by replacing loans with outright grants. Other schools followed suit, including
Stanford, Yale, and M.I.T. This shift puts even more competitive pressure on small
liberal arts colleges.
On another front in the bidding wars, some schools have become willing to “negotiate”
financial aid packages. According to a recent article in the Chronicle of Higher Education, Carnegie Mellon even encourages such negotiations by inviting students to send in
better offers from other colleges.
One seemingly unfair result of this is that families with savvy about the system will
do better. Two students sharing a dorm room could come from identical circumstances
but have very different financial aid packages.
Illinois Wesleyan stays away from negotiating financial aid, says Nichelson. Pope
puts it this way: “We don’t wheel and deal; we don’t have to.” He thinks schools have
dug themselves a hole with that mentality.
“Quality costs,” says Jerry Pope (above). “Saving a few thousand dollars may not be
While the University does not engage in competitive bidding for prospective students,
its Financial Aid Office does try to be flexible in making appropriate adjustments
if parents’ financial circumstances have changed. According to Nichelson: “If a parent
or student comes back and says another school has given them a better offer and asks
if we can refigure their package, I’ll ask, ‘Has anything changed?’”
If the answer is no, then the aid package stands as it is.
However, there are cases in which figures can be legitimately reevaluated. Aid forms
such as the FAFSA are based on the previous year’s income and can be misleading, says
Nichelson. In the event of some unforeseen circumstance — such as death, divorce,
or loss of job — Nichelson encourages families to go through an appeal process. If
successful, the financial aid package will be adjusted upwards. Likewise, if a family
wins the lottery, they can expect a downward adjustment.
Nichelson says that nearly all the families with which he’s worked over his long career
have been “great.” When he gets the occasional parents who are determined to play
hardball, he understands where they are coming from. Everybody, these days, seems
to be looking for the “best deal.” But that’s not necessarily a good idea where schools
Pope has two replies when a family comes back to him and says, “Look, the financial
package you offered us is okay, but another school offered us a better deal.”
First, he encourages them to “do their homework” in evaluating the merit of institutions
offering “better deals.” Perhaps the school offering the free ride isn’t offering
the same quality education. “Quality costs,” Pope says. “Saving a few thousand dollars
may not be worth it.”
Secondly, Pope advises families to check for hidden costs. More and more schools are
charging fees for computers, graduation, parking, and extra dining services, which
might not appear until the first bill arrives. Also, Pope encourages parents to compare
schools’ four-year graduation rates. That fifth or sixth year of college not only
involves more expense but is a year of lost opportunity for the student to launch
a career or pursue graduate studies. Plus, if a student is unhappy and transfers,
that can add on an extra year or more.
The most important consideration for students and parents, Pope says, should be looking
for the best fit, which is a very different mindset than simply bargain hunting.
It’s not like buying a Buick
How can we convince parents that an education is an investment, not a commodity?”
asks Jeff Hanna, University vice president for Public Relations. “We haven’t always
been successful in making the case for small liberal arts colleges — that we are worth
the difference and that colleges are like anything else: you get what you pay for.”
Nichelson contrasts the investment in a child’s education to buying a Buick. “You
buy a Buick for $25,000,” he says, “and after five years, it’s worth $5,000. But,
if you invest in your child’s education, it pays dividends for a lifetime.”
“Luckily,” Nichelson adds, “most of our families are fantastic. They know how it’s
going to turn out. Their child wants to be here and the parents see the long-term
One thing is certain — the $17-million financial aid budget is hugely important to
the University, whether it is dispensed as need-based aid or merit scholarships. Most
of all, it achieves that simple goal of providing opportunities, for both the students
and for the University.
“Without question,” Pope says, “alumni dollars [that go to financial aid] strengthen
the University. If it weren’t for our alumni, we couldn’t do what we do to help students.”
Pope speaks from the heart on that subject. As a farm kid from a rural town, there’s
no way he could have attended IWU, he says, without financial aid.
Exactly how IWU’s financial aid dollars will be dispersed in the future remains a
challenge. Schnaitter points out that even though the number of students receiving
need-based aid dropped below 50 percent in 2002-03, there’s a silver lining. He says
the University “can do a better job of meeting those needs now than when the number
of students receiving aid was 70 percent.”
At the same time, Schnaitter acknowledges that the matrix used for determining merit
scholarships may need to be tweaked. “All these decisions,” Schnaitter says, “are
based on a trade-off between financial need and merit, plus an overall responsibility
to balance the University’s budget.”
“We’re trying to balance the financial aid policy in a way that enhances IWU, but
is also fair,” Schnaitter says. “The way it is now, we may not be able to meet all
need, but we have a strong desire and responsibility to do so. Among our institution’s
many diversity goals is financial diversity.”
As Seibring looks into the future, he sees scholarship aid drying up statewide, causing
an even greater vacuum to be filled by need-based aid. “Merit scholarships helped
us become successful,” Seibring says, “but as you become successful, you need to change.”
During ongoing discussions of possible adjustments to IWU’s financial aid policies
in light of current institutional priorities and strategies, Pope believes it will
be helpful to frame the discussion in light of core values that have a national dimension.
“It’s the great American way on both sides of the question,” he muses. “On the one
hand, we believe that students should be rewarded for their hard work, no matter what
their financial circumstances. On the other hand, those students who are academically
qualified but would not have the means to afford IWU should get assistance to make
Seibring agrees. “It will always be a balancing act,” he says.
Nancy Steele Brokaw ’71 of Bloomington is a freelance writer and award-winning children’s
novelist. She wrote about the campus food service in our last issue.
To read some inside tips on the financial aid process from an expert, click here