Bowdoin Student Aid Policies Clarified; Tax Credit Recipients to be Held Harmless in Aid Calculation
Story posted December 15, 1998
Dec. 15, 1998, BRUNSWICK, Maine -- Bowdoin College will not reduce the amount of financial aid awarded to its students whose families qualify for a $1,500 tax credit under the new Hope Scholarship program. In determining need, Bowdoin also will make equity adjustments to assist families that have been excluded from the Hope Scholarship tax credit due to technicalities in the tax code.
Bowdoin's policy was announced last spring but was reiterated today by Director of Admissions Richard E. Steele after The Wall Street Journal published an editorial that included erroneous information about how Bowdoin plans to treat the Hope Scholarship tax credit.
"Despite recent press reports to the contrary, Bowdoin has no intention of reducing its aid awards to recipients of the Hope Scholarship tax credit," said Steele. "In fact, we believe our policies go a step further to provide assistance in a manner that is equitable for all of our students."
The Hope Scholarship is a tax credit of up to $1,500 per student for out-of-pocket expenses families pay in the first two years of college. The credit recognizes 100 percent of the first $1,000 paid and 50 percent of the next $1,000. Families of first-year students will not be eligible for the Hope Scholarship because they will not have paid tuition for that student in the preceding tax year, and eligibility is limited to families within specified ranges of adjusted gross income.
Institutions like Bowdoin that offer "need-based" financial aid calculate a family's ability to pay for college based on a number of factors. Under standard need analysis for financial aid, a tax credit of up to $1,500 -- like that provided through the Hope Scholarship -- would theoretically free up between $300 and $700 for a qualified family, depending on their adjusted gross income. Some might believe that this money should then be calculated as an additional resource available to the family, which would in turn lower their "need" for purposes of calculating financial aid. But Congress has indicated that its intent was that colleges not reduce "need" -- and therefore aid awards -- for those receiving this tax credit, a point Secretary of Education Richard Riley has reiterated in a recent letter to college presidents.
For its part, Bowdoin College intends to "hold harmless" students and their families who qualify for the Hope Scholarship tax credit. Founded in 1794, Bowdoin College is a highly selective coeducational, liberal arts institution with approximately 1,550 students from 48 states and more than two-dozen foreign countries. With a teaching faculty of 134 (full-time equivalent), Bowdoin offers Bachelor of Arts degrees in 35 departmental and interdisciplinary majors. Bowdoin's current student aid budget exceeds $11.5 million.
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