"I think it's a very important announcement," said President Tom Gerety.
Yale's previous policy involved a ranking of all foreign applicants with demonstrated need. Funds were allocated based on merit rather than need to those students.
Of the $30 million spent annually by Yale on financial aid, only $2 million goes to foreign students. Shaw predicted that the amount paid to foreign students will double under the new program.
"Instead of singling out foreign applicants, we are now able to consider all applicants together in one package," said Shaw.
Rather than tapping into funds already allocated to American and Canadian students, aid for international students will come from new sources. Ultimately, the school hopes to endow a $30 million program to fund the international aid program, according to Shaw.
According to U.S. News and World Reports, Mount Holyoke College ties with Eckerd College as the most internationally diverse liberal arts college, with 12 percent of its student body coming from abroad.
Fewer than one-third of Yale's 169 foreign students currently receive financial aid, while half of Harvard's 422 foreign students receive aid.
Shaw said that "a limited pool of dollars" was the primary reason that the school did not extend need-blind admissions to foreign students. "Yale had been moving in this direction for a few years now. This year, we were finally able to totally fund it."
MIT and Harvard contend that their need-blind admissions policies for international students create a racially and socioeconomically diverse environment, to which qualified students, regardless of economic status, are attracted. Without the policy, "we would have richer students and lower quality," says Stanley Hudson, MIT's dean of financial aid.
According to Shaw, the aim of the new admission policy is to attract more students from impoverished nations in Africa, Latin America and South Asia to Yale.
Shaw said that he has found the lack of need-based foreign admissions as one of the University's faults. "I've been waiting a long time to get this through," he said.
Amherst has begun to look into extending its need-blind admissions policy to international applicants.
"The College is looking into whether it would be financially feasible to increase the percentage of international applicants to whom we offer financial aid," said Dean of Admission Tom Parker. Of Amherst's 62 international students, 46 currently receive financial aid, up from 23 in 1990.
"International students aren't eligible for federal grants and loans," said Parker. "They also have to factor in the cost of round-trip airline tickets. International students are our biggest financial aid investment."
President Gerety added that, "When you do need-blind for Africa, India, Bulgaria, you're talking about incomes that are very modest."
The College funds foreign financial aid by drawing money from the endowment growth, according to Parker. Thus, the College must weigh the benefits of need-blind admissions against all other endowment expenses, such as academics and residential improvements.
"Hidden in all of that is what's your general idea of how many foreign students you want," Gerety said.
For the Class of 2004, the total financial aid budget increased by $2.5 million. Nearly 50 percent of the class receives financial aid, compared to 40 percent of the Class of 2003. This year the money went to reduction and elimination of student loans, giving more conditionless funding to low- and middle-income families.
"The school had to make some choices; we chose to eliminate loans this time around," said Parker. "We're now studying very explicitly the possibility of granting aid to international applicants."
Gerety speculated that Amherst could afford to pursue foreign need-blind admission as long as it kept a modest target of approximately 8 to ten percent international students. However, he said, should the College admit 40-50%, it would "break the bank."
To remain competitive, Parker said, Amherst needs to factor in how many other colleges provide need-blind admission to international students. "Now that Yale has changed its policy, we're watching to see who's next. If Princeton, then Stanford, then Swarthmore, then Williams all change their policies, and we're left behind, we have to consider the implications of being the last to make the change."
At present, international students make up 4% of the student body at Amherst, 7% at Harvard, 8% at Yale, and 13% at Macalester.
According to Parker, only Harvard, MIT and now Yale have totally need-blind admissions policies. Grinnell and Pomona Colleges have policies that ignore need, but make no guarantee to meet the demonstrated needs of international students. Parker notes that, while not need-blind, Mount Holyoke College offers large and usually complete financial aid packages to accepted international students.
"We're asking, 'What would it cost to fund five more international students? Then ten more?' And ultimately, 'What would it cost to be able to consider international students no differently from U.S. students?" explained Parker.
Also, a need-blind admission program would attract more applicants, Parker said. The College would have to prepare for an increased demand for such aid.
Parker indicated the attraction of a large international presence on campus for foreign students and for U.S. students alike. "If the number of foreign students is comparatively lower here than at other colleges, we're going to start looking less attractive," said Parker. "This is a very global generation.
Parker said that it is "still premature to make predictions, but nobody's questioning the advantage of an increase in the number of students here."