Despite shrinking endowments, these schools deliver an affordable, high-quality education. By Jane Bennett Clark, Senior Editor February 1, 2009 A year or so ago, a host of wealthy private institutions looked deep into their endowments and offered to share more of the wealth with their students. They beefed up financial aid, including replacing loans with grants for students who qualify and expanding aid to families with higher incomes. Now, with the economy reeling, colleges across the board face shrinking bank balances and the same out-of-sight costs for utilities, construction and staff benefits that have helped keep tuition increases outpacing inflation for the past decade. Not surprisingly, schools with the biggest endowments are among the hardest hit. Sponsored Content Will those circumstances affect your ability to cover the college bills? If you expect to receive significant financial aid, probably not, says David Warren, president of the National Association of Independent Colleges and Universities. Colleges with minimal endowments-the vast majority-continue to offer aid through a mix of loans, work-study and grants funded by gifts. Billion-dollar-plus institutions have enough left in their coffers to make good on last year's promises. Parents who pay most or all of the sticker price, however, will continue to feel the pain. The average cost of a year at a private school runs $34,132, up 5.6% over 2007-08, according to the College Board. Next year's price could reflect a jump of 6% or more. Confronted by high costs and tight credit, more families will likely turn to their state universities, where the average cost comes in at $14,333. Says Warren, "The decision goes to the rudimentary question: What will your out-of-pocket expenses be?" Advertisement Meanwhile, colleges both rich and not-so-rich are cutting outlays to keep operations running and financial aid flowing to families hit by the economic downturn. You can expect many schools to freeze construction projects, leave staff vacancies open and hit up donors to help families cover the higher costs, says Warren. "Nobody pretends it's easy, but it is the way to make more money available for student aid and protect the core of the institution, which is academics." To find colleges that deliver the goods during tough times, look to Kiplinger's 100 best values in private colleges and universities for 2008-09. These institutions, led by Pomona College among liberal-arts colleges and the California Institute of Technology among universities, provide a top-quality education at an affordable price-usually with generous financial aid. If you earn too much to qualify for need-based aid (and remember, that's a good thing), you can still find great deals within our rankings. Many of the institutions on our list offer hefty scholarships to a few outstanding students or smaller merit awards to a bigger pool. Emory, ranked number nine among universities, provides a full ride, including room and board, to 86 students and covers from two-thirds to full tuition for another 131 students, out of a total enrollment of 6,700. Davidson (ranked number four among liberal-arts colleges) bestows $2,000 toward the cost of attendance on 20% of each incoming class. California On Top Advertisement All rise for Pomona College. Its selective admissions rate, high standardized-test scores among incoming freshmen and low student-faculty ratio, plus a financial-aid policy that knocks almost two-thirds off its sticker price, moves it from number five last year to the top of our 2008-09 list of private liberal-arts colleges. Pomona not only places first among liberal-arts colleges for its selectivity, it also comes in with a near-perfect 99% for freshman retention. Blessed with a sun-drenched campus scented by eucalyptus, studded with palm trees and framed by the San Gabriel Mountains, Pomona gives freshmen-and everyone else-good reason to stick around. Like many elite institutions, Pomona provides only need-based aid and meets the full need of qualified families. Recently, it replaced loans with grants in its financial-aid packages. The average cost after need-based aid is $16,980, from a sticker price of $46,580. Most families who don't qualify for other need-based aid can take out Pomona's loans, which are interest-free while students are in school. As with the federal student-loan programs, students can defer repayment until after they graduate. Swarthmore College, number two on our list this year, also devotes virtually all of its resources to need-based aid and meets the full need of every qualified student. Its average need-based-aid package, $27,503, brings the net cost of attendance to $21,411-less than half the list price. A year ago, Swarthmore joined many of its peers by announcing it would replace loans with grants in its 2008-09 financial-aid packages. Advertisement Swarthmore relies in part on its endowment to fund that generosity, but the kitty has shrunk lately by several hundred million dollars, from a peak of $1.4 billion. Nonetheless, says President Al Bloom, "We intend to continue to provide financial-aid packages that do not require our students to take out loans. We will also continue to meet full need." The California Institute of Technology, in Pasadena, wears a triple crown: It heads our rankings among private universities for the third time running. A tiny institution that has the highest percentage of incoming freshmen with 700-plus SAT scores on either list, Caltech boasts one of the world's top programs in science and technology. Its three-to-one student-faculty ratio, which also tops our lists, gives Caltech students serious face time with a faculty that includes five Nobel Prize winners. This academic year, Caltech replaced loans with grants for families earning $60,000 or less, and it has reduced the amount of merit aid it offers as part of a plan to move to mostly need-based aid. It, too, has suffered losses to its $2-billion endowment, but research grants and gifts from alumni and friends help keep the budget rolling, says president Jean-Lou Chameau. As for financial aid, no worries, says Chameau. "If you are qualified, we'll find a way for you to come to Caltech." Among universities making an appearance on our list for the first time are Lehigh (no. 26), in Bethlehem, Pa.; the University of Rochester (no. 33), in Rochester, N.Y.; and Pepperdine (no. 35), in Malibu, Cal. Joining the list of the liberal-arts colleges: Reed (no. 44), in Portland, Ore.; Gettysburg (no. 47), in Pennsylvania; and Hillsdale (no. 50), in Hillsdale, Mich. Thomas Aquinas College (no. 33), in Santa Paula, Cal., and Loyola College of Baltimore (no. 47 among universities) rejoin us after a year's absence. Advertisement Emory on the move Kevin Kelly, of Western Springs, Ill., had three reasons for choosing Emory University, in Atlanta, over the other top schools on his list. "I wanted to be in an urban or suburban setting. I originally wanted to do infectious-disease research. And merit aid was a huge draw," recalls the lanky redhead. Bingo. As merit scholarships among top-tier institutions become an endangered species, Emory's merit awards continue to attract exceptional students from around the country whose family income would otherwise disqualify them for financial aid. These sizable scholarships, says enrollment manager Dan Walls, "have put Emory on the map." That's a big deal for a school whose goal is to become a "destination university." But need-based aid remains the first priority, and so far, Emory can afford both. That's reassuring for families whose college savings have lately gotten smaller. Financial-aid director Dean Bentley says requests for additional aid for current students are up 80% over the 2007'08 academic year, with new applications already spiking as the second semester begins. Result: Emory will have to come up with more money in 2009 to meet more need. "Funding for financial aid is an extremely high priority," says President James Wagner. "It's a major area of growth and expense." That pressure could slow Emory's efforts to compete with powerhouses such as Yale and Princeton. "Emory has entered the sphere of these institutions," says Wagner. "But we're a recent entry. We're aiming for the top of the top." More money for financial aid means less money for faculty slots and new construction. "The current economy has a direct impact on the resources available for us to continue to advance at the same pace." For most students, Emory's position relative to the Ivies matters less than its range of programs, proximity to Atlanta, and relationships with the nearby Centers for Disease Control and Prevention and the Carter Center. As a potential biology major, Kelly liked the idea of doing research at the CDC but wanted other strong programs in case his interests changed (he ended up majoring in sociology). Mary Vess, of Pinehurst, N.C., came to Emory with a music scholarship but fell in love with anthropology-now her major-and contemplates a career in public health. "People here are very open to new ideas," says Vess. Add all that to a place with sweeping lawns and intimate green spaces, enough marble to outfit a Tuscan village, a spectacular rooftop view of Atlanta, and a palpable sense of purpose, and you've got a school that's heading to the top-never mind the speed bumps. "Emory has enormous upside potential," says Wagner. "It hasn't arrived. The excitement at Emory is that we are moving." High on Pomona If Emory is still on the move, Pomona arrived at its destination more than 100 years ago. Part of a westward movement to establish New England-style colleges across the U.S., Pomona set up shop near Los Angeles in 1887. It draws its identity from a pioneer spirit and strong sense of place. "A lot of what makes Pomona Pomona is California," says Karen Sisson, vice-president and treasurer. "It's a unique college in a state that's a bellwether for most social changes, not only in the United States but also the world." Pomona derives some of its distinctiveness from its role in the Claremont Colleges-a consortium that also includes Scripps, Pitzer, Claremont McKenna and Harvey Mudd-on adjoining campuses. Students can take classes at all five colleges and use a combined library that houses two million volumes. "We're not different from other liberal-arts colleges, but we're more flexible," says Pomona's president, David Oxtoby. "If you really want a subject, you can take it on another campus. Students have a broader range of courses." The culture of sharing extends to Pomona's financial-aid policy, which reaches out to students of all circumstances, says Richard Fass, vice-president for planning. "Unlike the elite institutions in New England, we never had aspirations to train the elite. We wanted to find diamonds in the rough from the beginning. "One of Pomona's deans, Ed Sanders, helped design the need-based financial-aid system that is widely used by private schools. Says Fass, "Financial aid is the last thing we would compromise on." Oxtoby expects a greater demand for financial aid next year, along with dwindling revenues from gifts and the school's endowment. A tuition hike is likely, he says. To keep its commitment to academic programs and to financial aid, Pomona may have to postpone plans to expand its arts facilities and launch the next phase of a capital campaign. Says Oxtoby: "Everything is up in the air." Pomona's determination to fund financial aid during good and bad times has paid off for Jazmin Lopez, a senior from Napa, Cal. Sitting on a terrace surrounded by rosemary, she beams as she describes playing the violin in Pomona's fledgling mariachi band. "At first, the schools didn't know what to make of us," says Lopez, who is of Mexican heritage. "As we performed more, people were excited about seeing us on campus. It's a lot of fun to share that part of my culture with the community here." Lopez's family expected her to attend a university in the California state system. "My parents didn't go to college and couldn't grasp that going here might be cheaper than going to a public school," she says. "But once we got financial-aid packages from all the schools, Pomona was the one that gave me all the aid. The UC schools give a lot of loans, but I have minimal loans here." Oxtoby hopes to pass that good word to other families who assume Pomona is out of reach. "We're focused on getting out the message that we're affordable."