Dive Brief:

• The Schuler Education Foundation said it will invest up to $500 million at top-tier liberal arts colleges to help them enroll more low-income and unauthorized immigrant students. 
• The roughly 20-year-old foundation has already pledged tens of millions of dollars to five selective institutions: Bates, Carleton, Kenyon and Union colleges and Tufts University. Participating colleges will need to match the foundation's funding over five years.
• Colleges that work with the foundation need to meet all of their students' demonstrated financial need and be committed to raising the matching funds.

Dive Insight:

The Schuler Foundation has long focused on directly supporting students at liberal arts schools, but its new initiative homes in on institutions, said Jason Patenaude, its executive director.

The new program, called the Schuler Access Initiative, has been in the works for a couple of years, Patenaude said. The foundation wanted to assist institutions that demonstrate a commitment to low-income and underrepresented students by meeting all of their financial need. This has historically been calculated by subtracting a student's Expected Family Contribution from a school's cost of attendance.

The colleges selected may not have the funding to enroll more disadvantaged students, and as a result they have low percentages of students eligible for the federal Pell Grant, Patenaude said. The share of full-time, first-time undergraduates receiving Pell Grants at the five institutions ranged from 9% at Kenyon and Bates to 16% at Union, according to the most recent federal data. 

Several higher education leaders pointed out on social media, however, that the money is benefitting wealthy institutions.

While Patenaude said the foundation wanted to concentrate on lower-endowment institutions, all of the colleges it picked are among those with the 250 largest endowments in the U.S., according to fiscal 2020 data from the National Association of College and University Business Officers and TIAA.

"Well-resourced institutions get more resources to help a few people. Please clap," one pundit wrote on Twitter.

Patenaude said the foundation wanted to hit a "sweet spot" and not cater to the most well-funded colleges, such as Harvard University, where the capital wouldn't make a difference. It also wanted the money to go to institutions that produce strong graduation rates for their Pell-eligible populations, those that would "adequately support" those students, he said. 

The foundation will work with up to 20 to 25 colleges, depending on how much money each institution decides to draw from Schuler, he said. 

Carleton, in Minnesota, intends to match a $50 million challenge grant from the foundation. Tufts, in Massachusetts, and Kenyon, in Ohio, each received a $25 million commitment.  

And Bates, in Maine, raised $30 million of the $50 million it needs to match, even before announcing its grant this week. 

Union will need to bring in $20 million, and it has already secured about $3 million from donors, said the college's president, David Harris. Its fundraising base, as well as students, employees and governing board are exhibiting "tremendous enthusiasm" for the project, he said. 

Responding to criticism that the money is helping affluent institutions, Harris said that the college wants to extend its educational opportunities to all students, not just wealthy ones. And Union offers an excellent return on investment, he said. 

The Schuler initiative was a "no brainer" for the school and aligned with its priorities, Harris said.

The foundation intends to announce its next round of partner institutions within the next three to six months, Patenaude said. He encouraged colleges to reach out to the foundation now if they meet the program's parameters. 

The organization also wants to bring a researcher into the fold to study how the colleges are supporting underrepresented students during their academic careers and develop recommendations for the sector, he said.