Hannah C. Moser, 17, needed financial help; her father is a paramedic, her mother is ill and her parents are divorcing. Thrilled with the small classes and quirky students, she applied to Reed last fall and was ecstatic when she learned she was admitted — through an informal announcement that came in haikus by e-mail.
But she said she qualified for only $14,000 in aid, far less than any other college offered. She later discovered that she had not sent in a required form. She was placed on the aid wait list, to no avail. This fall, she will enroll at Willamette University in Salem, Ore., not too far from her hometown, Sedro-Woolley, Wash.
“I’ve actually struggled pretty bad with not being able to go to Reed, just because it was my reach school and everything about it was perfect and I impossibly got in,” said Ms. Moser, an aspiring writer. “And then I couldn’t go.”
This year, there was a 23 percent increase in freshmen seeking financial aid, and twice as many students have appealed their aid packages, said Ms. Limper, the aid director. “We have established some pretty stringent guidelines,” she said, first trying to help “the people with changed circumstances.”
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Those guidelines have given priority to students already enrolled like Becca Roberts, a 19-year-old from Los Angeles whose mother lost her job at a film distribution company last fall.
“It was sort of unforeseen,” Ms. Roberts said, “because the company seemed to be doing very well.” She feared she would be unable to return in the spring. When her mother called the college to describe their plight, Reed came up with more aid, thanks to the president’s discretionary fund. For the second semester, Ms. Roberts started work as a photographer for the college, watched her spending, stuck to the dining hall and tried not to venture off campus.
As job losses mount, more students like her may plead for help next year. But Ms. Limper does not expect to find money again. The budget, she said, is too tight.
When members of Reed’s board met in February and April to hammer out the budget, their priority was protecting the character of the college. Most of the members are alumni, with fond memories of earnest dialogue with professors in small groups, sometimes outside on the grass.
None of the options were appealing. Admitting more students would raise the student-faculty ratio, a measure of academic quality and, at Reed, a sign of the importance of interaction with professors. Raising tuition and fees would add to pressure on already-struggling families. Cutting spending could make it harder to recruit faculty members and could limit student resources.
Dipping further into the endowment, which provides about 20 percent of Reed’s budget, could imperil the college’s long-term survival. Last year, the endowment fell by nearly 25 percent, to $357 million, from $470 million. At a meeting with the budget committee of Reed’s board, Mr. Diver said he was reluctant to tap more of the fund: “I’m not proposing that.”
Members of the board did not push back at the time. But afterward, Daniel Greenberg, a Los Angeles businessman who is the group’s chairman, said he was not sure that the endowment should be off limits. “If we need to basically depend on the endowment, let’s increase the take rate,” he said, referring to the percentage of the endowment spent by the college every year. “We should do it if it will protect the character of the college.”
Instead, the board has approved increases in tuition and fees that bring the total cost of a year at Reed to $49,950. The college will have nearly 400 new first-year and transfer students in the fall, up from 355 last year.
Reed has increased its financial aid budget by 7.8 percent. It aims to use part of the $200 million it hopes to raise in a capital campaign, announced this spring, for financial aid in future years.
The college has cut 5 percent of its spending except on personnel. It has avoided layoffs — unlike some other institutions — though it is not filling vacancies.
Like many colleges, Reed is betting on a quick recovery of the economy and the financial markets to fuel endowment growth of 10 percent annually — including investment returns and gifts — beginning next year.
Asked by a board member what would happen if those assumptions did not pan out, the college’s treasurer, Edwin O. McFarlane, was blunt: “We’ll have to revisit the whole ballgame.”