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The high cost of a University education is known all too well by students. Even those who have parents to foot the bill often feel guilty about the financial pressure they place on mom and dad. Last month, Harvard University announced a drastic change in their financial aid package. Under the new financial aid package, students with household incomes of $60,000 or less would have their tuition covered by the school. The noteworthy aspect of the new program is its impact on middle class families, a demographic often ignored when it comes to need-based scholarships.
Under the new Harvard plan, admitted students with household incomes ranging from $120,000 to $180,000 will be expected to pay ten percent of their family income per year in tuition. The policy is expected to cut the cost of college by one third to fifty percent for a majority of students attending the elite university.
In an interview with the New York Times, Robert J. Massa, Vice President for Enrollment at Dickinson College, predicted the effects of Harvard's initiative: "They are the first; they're not going to be the last."
And since the announcement by Harvard, other private universities have created new plans to assist a variety of family incomes in paying for college.
According to Yale University's Office of Public Affairs, that college is also expanding the number of families eligible for aid. Its plan is similar to Harvard's in the fact that families earning less than $60,000 will not be required to pay tuition and that families earning between $60,000 to $120,000 will be expected to pay anywhere from one percent to ten percent of their family income.
Yale's Office of Public Affairs outlines the changes and their effects. "Yale also is increasing the number of families who qualify for aid, eliminating the need for students to take loans, enhancing its grants to families with more than one child attending college, exempting the first $200,000 of family assets from the assessment of need, and increasing expense allowances for foreign students during school vacation periods."
Dartmouth, another Ivy League university, has made similar adjustments to their financial aid package stating that students with household incomes of less than $75,000 will receive free tuition. Dartmouth also intends to replace many of their loans with scholarships.
While these schools are making attractive offers, institutions like U-M are unlikely able to match such offers. Harvard, with 6,715 undergraduate students has the largest endowment for an American university, at $34.9 billion. Their new financial aid package will cost $120 million. Yale, with 5,316 undergraduate students, has an endowment of $22.5 billion and will now spend over $80 million on financial aid per year. Dartmouth with only 4,085 undergraduates has an endowment of $3.76 billion. These large endowments have even drawn recent interest from the Senate Finance Committee. The committee's chair, Senator Charles Grassley, has looked into changes that would require universities to spend a minimum percentage of their endowments each year.
By comparison, University of Michigan has an astounding 26,083 undergraduate students and an endowment of $7.1 billion. While the endowment is impressive for a state institution, do not expect it to be able to offer such aggressive financial aid packages to its students. MR
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