Despite cutting back on virtually all other expenses, the university has decided to increase the financial aid budget by 12 percent for next year.
Director of Financial Aid Patricia Reilly said that this will represent an allocation of upward of $3 million.
"We expect that our returning students will need more financial aid because of the economy. To ensure that we can continue to meet their full demonstrated need, we have increased the financial aid budget," University President Lawrence Bacow told the Tufts community in an e-mail on March 11.
Bacow said that this is the only policy-directed increase among budgetary expenses.
Administrators anticipate meeting full student need for next year, but it remains to be seen how this commitment will affect the university's unofficial need-blind admissions policy, in which an applicant's ability to pay is not taken into account.
The decision to boost aid is part of a larger effort at the local and national levels to make funds more available and to ease restrictions on universities.
On the Hill, for example, administrators in December changed the university's policy on institutional loans, or loans made by the university, waiving interest charges for the first six months after graduation.
Meanwhile, the Tufts Student Fund, despite falling short of its goal of achieving 25-percent participation, raised $7,606 from student donations this semester that will be used for financial aid.
Nationally, the recently passed stimulus bill will provide some relief for students receiving Pell grants. As part of the bill, the maximum Pell grant will increase by $500 to $5,350.
These steps come at a time when the credit market is getting even tighter, a situation that loan provider Sallie Mae underscored on Monday when it changed its signature loans. Under the guidelines, new loan applicants will be required to start paying down interest rates while still attending school.
Despite these factors, most students unsure of their financial ability to remain at Tufts are waiting to see how much aid they receive from the university. Up to 90 percent of the grants students get are from Tufts, according to Reilly.
"Financial aid is distributed based on financial need. My assumption is that we are going to see a need increase across a wide array of families," she said.
But even as Tufts replenishes its financial aid coffers, Bacow said in his e-mail to the community that undergraduate tuition and fees for next year will go up by 3.5 percent.
"In this environment, nothing would please me more than being able to freeze tuition," Bacow said in his e-mail. "Unfortunately, the need to balance our budget means we cannot do so."
A balanced budget is critical because it helps the university maintain access to the endowment.
Massachusetts state law currently prohibits nonprofit organizations like Tufts from accessing interest made on endowed funds, or even touching the principal itself, if it would bring the endowment below its original value.
As endowments across the state dip dangerously close to their starting points, this regulation, meant to check against mismanagement, has raised concerns about whether businesses will be able to withdraw needed funds.
To ease fears, the Massachusetts state legislature is currently considering the Uniform Prudent Management of Institutional Funds Act, which would relieve certain restrictions on accessing endowed funds.
