Harvard Targets Middle Class With Student Cost Cuts (
By Matthew Keenan and Brian Kladko
Dec. 10 (Bloomberg) -- Harvard University will cut the costs of attending the Ivy League school by as much as 50 percent for families that earn $120,000 to $180,000 a year, making access easier for ``middle-income'' students.
These families will pay 10 percent of their yearly earnings to send a child to Harvard, the Cambridge, Massachusetts, university said today. The payments decline on a sliding scale, with those making less than $60,000 attending for free. The school also eliminated student loans, saying they will be replaced by grants as needed.
Harvard is expanding an effort begun in 2004, when former president Lawrence Summers added a tuition-free financial aid program for students from low-income families. The assistance, starting next year, will reduce expenses for a family earning $180,000 to $18,000 per student, compared with $30,000 this year, according to the school. Annual spending on grants will rise by about $22 million.
``What you see here is a real commitment to try to identify a response to the enormous stress that a particular group of families feel about the cost of higher education,'' President Drew Faust said in a conference call. The new program focuses on a ``middle-income group,'' she said.
Excluding home equity from financial aid formulas, another part of the initiative, may save some students about $4,000 a year, according to a statement from Harvard.
Two Goals
University officials said they had two goals: increasing the economic diversity of students applying to the school, and improving the experience of lower- and middle-income students who attend. Fitzsimmons said the higher amount of aid will allow students who receive it to do more non-paid research and internships, studies abroad, community service and extracurricular activities.
Currently, two-thirds of undergraduates receive some form of financial aid, and half receive need-based scholarship aid from Harvard, now totaling more than $98 million, the university said. In 2008-09, Harvard expects to spend $120 million on undergraduate grants, a rise of more than 20 percent, officials said.
The total cost of attending Harvard without financial aid in the current academic year is $45,620. The initiative will bring Harvard's costs in line with tuition, room and board and fees paid by residents at the main campuses of state university systems, William Fitzsimmons, dean for admissions and financial aid, said in the conference call.
`Freeing Students'
``We really wanted to free students up entirely from this issue of indebtedness, and really to focus on what would be the best thing for them,'' Fitzsimmons said.
In 2004, Harvard waived tuition payments for students with family incomes of less then $40,000. Last year, Harvard raised that income level to $60,000, and provided price breaks for students with family earnings as high as $80,000.
Princeton University in New Jersey eliminated loans from its financial-aid packages in 2001-02. Williams College in Massachusetts, ranked the best liberal arts school by U.S. News & World Report, ended loans last month.
Senator Charles Grassley, a Republican from Iowa, said he hoped Congress would renew its discussion of whether rich schools should be required to pay out a specified portion of endowment income each year. In September, he called for wealthy colleges to use more of their endowment funds for financial aid or to curb tuition increases.
``This is big news,'' Grassley said in a statement. ``This could inspire other expensive colleges to make tuition more affordable.''
Seeking Diversity
In September 2006, Harvard, along with Princeton and the University of Virginia in Charlottesville, dropped its early- admissions program, saying it favored wealthy applicants. The three schools undertook a joint 19-city admissions tour last month to attract lower-income high school students.
Education consultant John Maguire said the initiative doesn't address an imbalance in education, since a large majority of students attending elite institutions are from families in the upper half of income earners. In 2006, the nation's median household income was $48,200, according the U.S. Census Bureau.
``It's praiseworthy, it's better than what happened before,'' said Maguire, chairman of Maguire Associates Inc. in Concord, Massachusetts. ``But the key question is how do we deal with the huge number of students in this country who don't benefit, who can't benefit, from the real resources of a place like Harvard University.''
`Serious Debt'
Faust said Harvard worried that its cost might deter potential applicants.
Joan Bress, a college admissions and financial aid counselor in Worcester, Massachusetts, said she doubted the move will draw more applications, or lead more accepted students to opt to attend Harvard. Students who manage to gain admission to Harvard almost always choose to go, regardless of the financial burden, she said.
``Many of these families would have gone into serious debt, but they would have sent their children there anyway,'' she said.
The school's statement didn't specifically say how the university would pay for the change. Harvard's endowment, the largest of any school's, was valued at $34.9 billion at June 30.
``Any investment of this magnitude requires trade-offs, even at a university with substantial endowment resources,'' said James R. Houghton, senior fellow of Harvard Corp., which runs the school. ``But investments in the quality of our students -- like investments in the excellence of our faculty and research enterprise -- occupy a special place.''
To contact the reporter on this story: Matthew Keenan in Boston at mkeenan6@bloomberg.net ; Brian Kladko in Boston at bkladko@bloomberg.net . |
