Boston University President Robert Brown released the university’s annual report on Jan. 22, which included a financial report detailing, among other things, the financial aid given to students during the 2018 fiscal year.
According to the report, about $385.5 million was given in student aid last year, an increase from the just over $344 million awarded the previous year. For the first time in BU’s history, the school’s endowment surpassed $2 billion.
Martin Howard, BU’s senior vice president, chief financial officer and treasurer, wrote in a letter included in the financial report that he was optimistic about the ongoing fundraising efforts made by the university. In FY2018, Howard wrote, BU raised $252.8 million from gifts and pledges.
“Gifts from alumni and friends have provided generous support for undergraduate financial aid, allowing for greater substitution of grants for loans,” Howard wrote.
Randall Ellis, a professor of economics at BU, wrote in an email that financial aid can be the determining factor to attend a university for a wide range of household incomes.
“Students see [financial aid] as a signal of their being valued at a given university,” Ellis wrote. “Holding quality constant, a student is much more likely to go to a university with a larger amount of financial aid, even if it is more expensive even after that aid than another alternative.”
Ellis wrote there are several ways schools can go about increasing financial aid for students, but most of them involve cutting university spending elsewhere.
“Universities can choose whether to sacrifice salaries for faculty and staff, offer fewer amenities and activities, or slow down building investments,” he wrote, adding that most buildings at BU are built with money from a specific, individual donor.
Ellis added that there are ways the university could increase its aid to students, such as growing the school’s endowment.
“It takes real effort and motivation to increase endowments,” Ellis wrote. “BU is doing a better job, but is still behind other powerhouses like Harvard and MIT.”
For the fiscal year 2018, Harvard University’s endowment was $39.2 billion, and Massachusetts Institute of Technology’s endowment was $16.4 billion.
Economics professor Kevin Lang said he believes the university has done an “incredible job” at finding a balance between spending to increase the attractiveness of the university and continuing to expand its financial aid for students.
Sometimes, he said, giving more financial aid to some students can actually harm a university overall.
“A school might be able to raise tuition on students who do not receive financial aid in order to increase grants to students who do,” Lang said. “It might be able to reduce the number of small classes in order to increase grants to students on financial aid.”
Statistics in the report show that BU oversaw more than $140 million in net operating gain and granted $487 million in research awards in FY2018. The merger with Wheelock College increased the university’s total net assets by $517 million.
BU spokesperson Colin Riley wrote in an email that the university’s $2 billion endowment could make the university appear wealthier than it actually is.
“In fact, we have a modest endowment for a school the size of BU,” Riley said. “BU’s endowment dollar per student is around $60,000, while some colleges exceed seven figures per student.”
Riley wrote that given these data points, BU is proud of the financial aid it is able to provide.
“The university recognizes the investment that students and their families are making to them, and the president and his administration do an outstanding job in managing the university to be as efficient [as possible] in delivering high quality education,” he wrote.
Daniel Hernandez, a sophomore in the College of Communication, said that he attends BU in part because of the financial aid he receives.
“I would have to say that without the financial aid I get from this school, I probably wouldn’t be able to go here,” Hernandez said. “For real, I’m actually very thankful for the aid I’ve gotten from this school.”
Amos Mwaura, a freshman in the College of Arts and Sciences, said he is lucky for his financial aid but questioned the financials of BU overall.
“I was pretty fortunate with my financial aid, looking at the official price of the university in relation to that, but I think that many students weren’t as fortunate, and I’m sure it is a big blocking point for students to attend a university,” Mwaura said. “I’m not going to lie, I wonder how all that money is redistributed for sure.”
Joe Walsh, a freshman in the College of Engineering, said he would like to see more financial aid given out.
“I’d always like more financial aid, could always go for some more,” Walsh said.
Alex LaSalvia contributed reporting.
