Cornell University, in another effort to help ensure that it remains affordable for the nation's top students, today (Jan. 25, 1999) announced that beginning in fall 1999, students will be able to use the full amount of any outside scholarships to reduce the amount they would otherwise borrow as part of their financial aid award.

In addition, university officials said, Cornell will ensure that families receive the full benefit of federal education tax credits available for the first time this year.

"Cornell was founded on the principle of enrolling students based on their qualifications and academic promise, not on their ability to pay," said Cornell President Hunter Rawlings. "Today, with this enhancement to our financial aid policy, we once again affirm that principle."

Both the change in the policy regarding outside scholarships and the clarification in the handling of federal Hope Scholarship and Lifelong Learning tax credits will affect the way the university calculates family income. That, in turn, will help reduce the amount families and students must pay out, said Thomas Keane, director of financial aid and student employment.

In addition, Keane said, the undergraduate scholarship budget for fall 1999 will increase by $3.9 million, or 7.3 percent, to $57.7 million.

Many civic organizations and corporations provide merit scholarships to Cornell students. Under current university policy, half of those outside scholarship funds go toward reducing the student's loans, while the other half is allocated toward the Cornell grant portion of the student's aid package. Under the new policy, students will be able to use 100 percent of those scholarship funds to reduce the amount they and their families would borrow.

Keane said the university also will ensure that students and their families get the full benefit of the $500 federal Hope Scholarship and Lifelong Learning tax credits. The university will not include the $500 federal tax credits as available family income in its financial aid need analysis formula, Keane said.

This policy change follows the announcement in October of a historic, $200 million campaign for scholarship endowments that Rawlings said "will keep Cornell affordable to the very best students in the nation, regardless of their financial circumstances."

Rawlings reported then that the university already had received a $50 million challenge grant toward that goal. The challenge grant will provide $1 for every $3 raised for the campaign.

Thus far, Rawlings announced, a total of $85 million has been committed toward the $150 million needed to complete the campaign. Two families made $10 million gifts to the campaign.

Cornell was founded in 1865 with a mandate to provide financial aid to those who need it. Today, 50 percent of the university's approximately 13,300 undergraduate students receive need-based financial aid.

And at its meeting last March, the Cornell Board of Trustees reinforced its commitment to financial aid and affordability when it made Cornell's need-blind admissions and need-based financial aid a standing policy rather than something to be voted on yearly. The $200 million scholarship campaign, Rawlings said, will enable the university to maintain need-blind admissions while safeguarding its long-term financial strength.

"The campaign lessens the burden for financial aid funding on the university's operating budget, and it makes more dollars available for student scholarships," Rawlings said. "It preserves Cornell's commitment to admit promising students regardless of their ability to pay -- without jeopardizing financial support of academic programs or faculty and without placing undue emphasis on increasing tuition."

Cornell's commitment to reducing student indebtedness is longstanding, Keane said. He pointed to the Cornell Commitment programs: the 40-year-old Cornell Meinig National Scholars, the 15-year-old Cornell Tradition and the 2-year-old Presidential Research Scholars programs.

The awards made in those programs, he noted, are made in addition to the average grant of $12,500 to Cornell students with financial need. Thus, they serve to reduce the amount of repayable loans made to students.

"Cornell's goal is to enroll and graduate the nation's most outstanding students," Keane said. "At the same time, we are firmly committed to ensuring that undergraduate education at this world-class research university remains affordable. This new policy, combined with our scholarship campaign and other ongoing programs, will help us achieve those goals."