For more than 140 years, Cornell has been shaped by our founder's vision of a university where "any person can find instruction in any study" and by the Morrill Act of 1862, which established America's land-grant institutions, including Cornell, to provide a liberal and practical education to those of varying socioeconomic backgrounds. Generations of Cornell alumni have confirmed the wisdom of the founding vision and the land-grant idea: people of talent and determination can overcome disadvantages through education and go on to contribute significantly to our nation and the world.
Socioeconomic and other forms of diversity remain essential to the character of Cornell. I believe that it is also important for Cornell to set an example for other American universities, including other land-grant institutions, so colleges and universities will continue to serve as engines of opportunity for the next generation.
Need-blind admissions and need-based financial aid are already cherished traditions at Cornell. We aim to admit students who will benefit from and contribute to our academic community, and then provide the financial assistance they need in order to attend. Paying for college has traditionally been a shared enterprise, where students and their families, the University, and federal and state governments all contribute to meeting the cost. Over the past decade, though, rising costs and only modest increases in student financial aid from state and federal sources have put pressure on both the University and student families. The cost of a Cornell education has become especially burdensome to lower- and middle-income students and their families because of the substantial role that loans have played in our need-based aid packages.
To address this problem, and to ensure that our students' career choices after graduation are not limited by the burden of debt, the Cornell Board of Trustees, at its January 2008 meeting, took a bold step by supporting Provost Biddy Martin's courageous plan: beginning next fall, we will replace need-based loans with grants for all undergraduate students with annual family incomes below $60,000. For families with incomes between $60,000 and $120,000, we will cap the need-based loan component of undergraduate financial aid packages at $3,000 per year. Then, beginning with the 2009-10 academic year, we will replace need-based loans with grants for all undergraduates with family incomes up to $75,000 and cap need-based loans at $3,000 per year for all students with family incomes between $75,000 and $120,000. We expect that these changes will prompt more accepted students to enroll at Cornell, ease the debt burden for current students, and also convey a strong message about the importance we attach to socioeconomic diversity within our student body.
While many of our peer institutions have also taken measures to make their education more affordable, Cornell's efforts are notable for two reasons: First, Cornell has a large undergraduate population that requires financial aid. Our financial aid population is larger than the entire undergraduate body at some similar institutions. In addition, we enroll a higher percentage of students from families in the lowest income groups than most of our peers. Second, we are making this commitment to our students and their families even though we are far less wealthy than some other schools. Although Cornell's $5.4 billion endowment may seem large, in comparative rankings on a per-student basis, we rank seventy-fourth—far below almost all of our peers. For this reason, we have been careful to target our new financial aid policy to the students and families who most need assistance with college costs.
We expect to spend $116.8 million on undergraduate financial aid during the current academic year. Our new financial aid policy, when fully implemented, will cost an estimated $14 million more. We intend to fund the incremental costs of these changes from an increase in payout from our endowment, new gifts, and reallocations of existing resources over the next two years.
Cornell's alumni, parents, and friends have already been incredibly generous in their support of financial aid as part of the "Far Above" campaign. To keep alive Ezra Cornell's vision and to remain true to our land-grant roots, though, we need your help more than ever. I hope that many of you will help keep the University affordable through your continued financial support. And I invite those of you who were recipients of financial aid during your years on the Hill to let me know the impact your aid had on your Cornell experiences and on your lives as alumni.