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Zelia Gonzales had an enviable choice to make.

The daughter of a single father who earns less than $25,000, and the first in her family to go to a four-year university, the Sacramento native found herself deciding among acceptances to the University of California at Santa Cruz, Boston College and Cornell.

Attracted by the chance of an education that did not require her to take out loans, Gonzales picked Cornell.

“I knew that I was going to get a lot better financial aid” from one of the elite, highly endowed universities that have become known for generous policies they say cover the difference between their costs and what even the lowest-income students can afford to pay.

Two years later, Gonzales, now 20, is accumulating debt through Cornell and federal student loans that she expects to reach a “pretty steep” $16,888 that includes unanticipated expenses such as health insurance, a single dorm room (her financial aid covers doubles, but she has a muscle disorder and wanted to live in more accessible housing) and her student contribution.

 “I wanted to end school without having any loans, and I thought that I could do that, and when I got here I realized there were a lot more costs”

“I wanted to end school without having any loans, and I thought that I could do that, and when I got here I realized there were a lot more costs,” Gonzales said.

Even if her calculations hold true, Gonzales will owe less than the $28,650 in debt with which the average undergraduate who borrows emerges from public or private nonprofit universities and colleges, according to The Institute for College Access & Success. And with a degree from Cornell, she’s more likely to earn enough to cover the payments.

But low-income students like her, who overcome the odds and are admitted to elite schools, often expect to graduate with no debt at all, given the way many of those institutions phrase their widely publicized promises of generous financial aid.

While Cornell acknowledges that some students may need to take out loans (“Your financial need may be met with a combination of work, loan and grant”), Harvard, on its undergraduate admission website, says, “Because we seek the best students regardless of their ability to pay, we are committed to meeting 100 percent of demonstrated financial need for all four years.”

Yale “admits students without regard to their ability to pay and meets 100 percent of demonstrated financial need. For all students. Without loans.” And the University of Pennsylvania “is committed to making its practical, powerful and flexible Ivy League education available to the best and brightest students, regardless of their economic circumstances.”

Yet the federal Department of Education reports that 19 percent of students at Penn have to borrow, 11 percent at Yale and 4 percent at Harvard. At Amherst College, which describes its financial aid policies as “among the most generous in the nation,” the figure is 17 percent; at Northwestern, 27 percent; and at Stanford, 10 percent.

Thirty percent of Cornell undergraduates took federal student loans to pay for their educations; the university itself says 41 percent graduate with debt, though that’s down from 54 percent in 2007.

Those seven institutions have endowments that collectively total just under $120 billion.

“These schools are wealthy as heck, and they’re getting basically free advertising by claiming to meet need when they’re not meeting need,” said Sara Goldrick-Rab, a professor of higher education policy and sociology at Temple University. “And the thing is, these students are getting screwed.”

This is happening in part because, pressed to admit more low-income students, the institutions “artificially understate the actual [financial] need that the students have and claim to meet it, while also claiming that if a student takes debt, that’s because of poor choices,” said Goldrick-Rab, the author of “Paying the Price: College Costs, Financial Aid, and the Betrayal of the American Dream.”

In spite of seemingly generous financial aid policies, 30 percent of Cornell undergraduates have to borrow, 19 percent at Penn, 11 percent at Yale and 4 percent at Harvard.

The universities take into account family income but not household debt, for example, she said, even though many working families have outstanding car and other consumer loans.

Meanwhile, a fifth of universities and colleges tell students to budget for living allowances at least 20 percent lower than what they’ll actually need for even a very modest standard of living, and even when it’s shared with roommates, according to research Goldrick-Rab co-authored; those are the costs for which students at elite schools say they’re most often forced to borrow.

Institutions “are assuming a student can live on $300 a month when the reality is $600 a month,” she said, and that doesn’t necessarily account for books, materials and travel expenses.

Related: Debunked: $1 trillion in student debt and other myths about the liberal arts

Gonzales had to take out loans for room and board beyond what was covered by her Cornell financial aid package, and for mandatory health insurance. Because she took a high school internship with the Sacramento city government that paid more than minimum wage, and assuming she was saving everything she earned, the university also expected her to pitch in $3,100 a year, on top of a required work-study job. Her grandmother paid her student contribution her first year, but she had to borrow after that to pay for it.

She said money she made working over the past summer went to food, transportation costs and paying off credit card debt.

Although he said he couldn’t comment on individual cases like Gonzales’, Cornell spokesman John Carberry said students there from families earning less than $60,000 a year are not expected to go into debt, and the university has programs to help low-income and other students deal with financial challenges that may arise once they’re enrolled.

Since students are required to have health insurance, he said, Cornell offers its own insurance plan with an annual cost of $2,832.

Ray LaMotta’s mother works at George Washington University, and her job meant her children would get free tuition there. So she and her husband never put aside any money for their college educations.

Now working in human relations in Virginia, Ray LaMotta graduated with $22,000 worth of debt from Harvard, which, like several other elite schools, says it meets 100 percent of financial need.
Now working in human relations in Virginia, Ray LaMotta graduated with $22,000 worth of debt from Harvard, which, like several other elite schools, says it meets 100 percent of financial need. Credit: Noah Willman for The Hechinger Report

Then LaMotta got into Harvard. “That’s not an opportunity you’re going to pass up, no matter what the cost is,” he said. “I sort of out-performed my parents’ expectations for me.”

LaMotta said he had to pay $7,500, which he split with his parents, and another $2,500 he earned by working at a summer camp and, in his freshman year, by cleaning dorms 20 hours a week. He recalled the experience as not so much stigmatizing as much as lonely and mind-numbing — not to mention time-consuming.

In his sophomore year, LaMotta took a job with more hours and less pay at a student theater, but grew tired of a miserly lifestyle that affected his social life. He took out loans and graduated from Harvard $22,000 in debt.

Rachael Dane, a Harvard spokeswoman, said that while 70 percent of undergraduates there receive some form of aid, many are expected to contribute by working during the year or in the summers, on- or off-campus. “While loans are not required, some students choose to borrow and thus would graduate with debt,” Dane said.

The same holds true at Yale, spokesman Thomas Conroy said. “It’s up to the student if they wish to borrow to provide their contribution,” said Conroy. While the university does not require a student receiving financial aid to work, he said, any shortfall “can be earned at a campus job that pays well above minimum wage and allows a student to work an average of eight hours a week.”

Goldrick-Rab said the most common argument she hears from financial-aid officers is that students don’t know how to live within their means. “But when we look at the actual numbers, the problem isn’t that they don’t live within their means. It’s that the college is assuming people can live on an amount of money that’s not reasonable.”

For some students, taking work-study or summer jobs is also not logistically possible or affects their academic performance, she said.

Griffen Croft, a 20-year-old sophomore at the University of Pennsylvania, grew up in the rural northwest Ohio community of Spencerville, the son of parents who didn’t go to college.

“I considered Princeton, because the first letter I got from them was like, ‘Fifteen or 10 percent will graduate with debt; everyone else is debt-free,’” Croft said. “I kind of assumed that going to Penn would be similar to that, because I knew they have a big endowment.”

But Croft didn’t get much financial aid, and his parents — who make too much money to qualify as low income because they own their own businesses, though Croft said those produce only modest profits — couldn’t afford to help him. He has borrowed $30,000 this year alone and expects to need still bigger loans next year.

Croft has no particular dread about his debt, he said.

“I’m going to get a good job out of college; I should have no issue paying back the loans.” To do this, he said, he plans to work in investment banking or consulting for a few years.

Among those who took out loans at these institutions, the median debt of graduates who were also eligible for federal Pell Grants — a commonly used measure of low-income status — ranged from $3,895 at Princeton to $25,738 at Columbia, according to the U.S. Department of Education.

While more than 70 percent of all students at the top 20 U.S. News and World Report-ranked universities who borrow have begun to repay their loans within three years of the debt becoming due — compared to the national average of 55 percent, according to the Center for American Progress — lower-income graduates from these places are more likely than their higher-income classmates to default.

Related: Overwhelmed by student debt, many low-income students drop out

LaMotta and Gonzales said their circumstances also are examples of how elite universities’ policies affect students in other ways.

Gonzales wants to become a teacher in California. “But debt makes a difference in what you’re going to into,” she said.

She said her high school internship was relevant to her Cornell major in labor relations. But the salary she earned for it reduced the amount of financial aid she could receive. Nor could she have afforded to accept an unpaid internship, as higher-income students can. (At Yale, Conroy said, students on financial aid can get summer stipends allowing them to take unpaid internships.)

“Harvard is not an opportunity you’re going to pass up, no matter what the cost is.”

“It’s like these things are incongruent, education and what people expect from you — the things you’re expected to do to further your career — and then you’re penalized for it.”

LaMotta is making around $60,000 a year working in human relations in northern Virginia. He said he expects to take a decade to pay off his debt, and that the experience has made him more financially savvy.

“I absolutely understand the idea that, if you’re getting 50 grand of financial aid from the school, it makes sense that you should be working to make sure you actually have some stake in the education that you’re getting almost for free,” he said.

“The biggest issue for me is that you then have a bunch of other people who are getting this education for free, because their parents are paying for it. But no one is asking them to take this ownership of the education that they’re getting.”

Goldrick-Rab said the phenomenon of students incurring debt at elite colleges with multibillion-dollar endowments is happening against a backdrop of pressure for these institutions to accept more low-income students.

“The elite schools have been under a lot of pressure,” she said. “There’s been growing attention paid to whether they are enrolling low-income students and whether, in fact, they are affordable.”

But failing to understand the true nature of students’ needs “would have to assume a fair bit of ignorance on the part of very, very experienced administrators.”

This story about elite colleges was produced by The Hechinger Report, a nonprofit, independent news organization focused on inequality and innovation in education. Sign up for our higher education newsletter.

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