University of Texas' poorest incoming freshmen to receive $20,000, laptops and more starting this fall

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Beginning next fall, the neediest freshmen at the University of Texas at Austin will get a boost of $20,000 in financial aid to cover their long list of college living expenses — thanks to a $100 million gift from the Michael and Susan Dell Foundation.

The gift is one of the largest in the nation that directly supports Pell Grant recipients, according to higher education experts.

The Dell Foundation, long a proponent of low-income student success, announced Friday that for the next 10 years, every incoming UT freshman who qualifies for the Pell Grant will have access to “personalized services” including a new laptop, tutoring, career and internship planning, and financial aid coaching. The Pell Grant is a federally funded, need-based grant.

The $20,000 checks will go to those Pell Grant recipients with the most serious financial needs — a calculation that will be based on “expected family contributions” of less than $1,000.

Janet Mountain, executive director of the Dell Foundation, said there will be an estimated 2,000 Pell-eligible students arriving at UT this fall, all of whom will have access to the personalized services. How many of them will receive the extra funds is still unknown, however. There is no application process; the university and the foundation will identify eligible students at orientation.

“Not just making it to college but making it through college has always been a significant part of this foundation,” Mountain said. “The overall mission is to accelerate opportunities for children growing up in urban poverty.”

The announcement follows the university’s recent effort to expand free tuition to more low-income students. In July, the university raised the family income limit necessary for free tuition from $30,000 to $65,000, aligning its policies with other Texas universities, like Texas A&M. The Dell Foundation, learning of UT’s decision, was inspired to further contribute to Longhorns with financial hardships.

For this academic year, the average cost of attendance at UT is more than $28,000 for in-state students, covering tuition, housing and other expenses like transportation and textbooks. The Pell Grant, which varies annually, awarded a maximum amount of $6,195.

More than 9,000 UT students were Pell recipients in 2017, according to the most recent financial aid data from the Texas Higher Education Coordinating Board.

University expenses can be major deterrents to graduation rates. Typically, only 20% of low-income students in the country graduate from college in six years or less, Mountain said. At UT, the graduation rate for low-income students is 73%, but the university and the Dell Foundation are trying to push that rate to 90%.

UT student Alyssa Garza, 20, is an aspiring aerospace engineer from Mission. With the help of the Pell Grant, the university’s hefty $40,000 Impact Scholarship and another $40,000 scholarship from the Cockrell School of Engineering, UT didn’t feel like a pipe dream, Garza said.

But even with enough financial aid to cover tuition and housing, day-to-day living can be a struggle, she said. Garza said a campus parking spot over the summer cost her hundreds of dollars, and the $20 to fill up her gas tank biweekly is sometimes hard to spare.

Right now, Garza said, she has $50 to last her two weeks, making social activities like eating out or going to a movie nearly impossible. A study abroad program she wants to attend this summer to fulfill class requirements costs thousands of dollars she doesn’t have. An extra $20,000 for life expenses “would have helped substantially,” she said, though as a sophomore, Garza won’t be eligible for the program.

“Just because I have school paid for doesn’t mean I have money,” Garza said. “I still have to think about upcoming purchases, find the cheapest option. It’s not as luxurious as people think it is.”

Dell’s menu of other support services to the Pell-eligible students will include mental health counseling, financial literacy assistance, career planning, child care, tutoring and textbook support. These programs will build on existing UT resources and personnel but will ultimately be a separate team comprising about 15 people, fully dedicated to each Pell student on campus.

Students can use that team as a go-to for any crisis, academic or otherwise. They will also have access to emergency funds, kept on hand by the program.

“I think people would be surprised to know how often that final straw is something as simple as your car is broken down and you need $250 to get it fixed and you just don’t have the money,” Mountain said. “The idea of emergency funds is that when [students] come and say, ‘Oh my word, I have a crisis today’ ... we have the ability to flexibly meet that need.”

The university has committed to raising funds to maintain the program after 10 years are up, and Mountain said the foundation is looking into an endowment to help keep it going.

“We have a long-term plan about improving the success of our students,” UT President Greg Fenves said. “It’s very ambitious, but we’re excited about doing this.”

The Austin-based Dell Foundation has its own college scholarship program and has serviced more than 4,800 students to date. Started nearly two decades ago, the foundation has a long history of combining cash with counseling — a “proven model,” Mountain said.

Michael Dell, a UT student who started the computer company Dell Inc. in 1984, began the foundation with his wife Susan. Its charitable ventures extend around the world and focus largely on combating poverty through education.

Higher education experts said the Dell gift targeting low-income students may mark a turning point in how colleges approach financial aid assistance.

Alumni often donate large amounts to their alma maters with no restrictions attached, said Jonathan Fansmith, a director for the American Council on Education. Those institutions typically use the funds to subsidize the cost of supporting low-income students.

“There may be other gifts of this size, but the specificity of targeting Pell Grant recipients … it’s impressive,” Fansmith said.

Clarification: This story has been updated to clarify that Dell Inc. and Dell Foundation are two separately operating entities.

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