Issue date: 1/18/08 Section: News

At small liberal arts schools vying for the attention of top students, announcements of sweeping financial aid reform at Harvard, Penn and other schools mean trouble.

Like most colleges and universities, academically-renowned liberal arts schools do not have billion-dollar budgets. Such funds allow for Harvard's reduction in tuition for families earning under $180,000 and Penn's new loan-free aid packages.

These smaller schools, which draw students from the same talent pool as Harvard, Penn and Yale, are now at a loss as to how to compete.

"What was a hard battle before might be a lost battle now," said Philo Hutcheson, co-chair of the Association for the Study of Higher Education archives.

Experts also predict that if smaller schools divert precious funds toward competition for middle-class students, student decisions will increasingly be based on price, not fit.

At Kenyon College, a percentage of students are eligible for loan-free packages, but not all. Jennifer Delahunty, Kenyon dean of admissions and financial aid, says she fears it will be more difficult to convince students that a Kenyon degree is worth post-graduation debt if they've also been accepted to Yale.

The media attention given to radical financial aid increases makes the job of admissions officials at small liberal arts schools even more difficult.

Nancy Benedict, vice president for enrollment services at Beloit College, says many prospective families may now have unreasonable expectations of financial aid at schools with smaller endowments.

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