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Here's the deal. Starting with the next school year, Harvard will charge 10 percent of household income for tuition for students from families earning between $120,000 and $180,000 a year. So if your family earns $120,000 a year, you would pay $12,000 a year in tuition, not the $45,600 normal charge.
Harvard also will give grants--not loans--in financial-aid packages and won't factor in equity in a house when figuring out how much aid a family gets. The reason for this unprecedented move is Harvard no longer wants families to sell or borrow against their homes to make the prestigious university affordable for their children.
Dubbed the "middle-income initiative," the university increased its initial pledge to help families earning between $60,000 and $80,000 after evaluating the pressure on the middle class. "We hear about this in a number of ways: housing costs, both parents working, the difficulty of amassing any kinds of savings, just the increasing pressures as middle-class lives have become more stressed," Harvard's President Drew Gilpin Faust, the university's first female president, told The New York Times.
The new plan is the latest push by the university to make the school more affordable and to encourage students out of the elite and moneyed network to apply. Three years ago, under then President Lawrence H. Summers, the university announced families earning less than $40,000 would not have to pay tuition. It later upped the earning minimum to $80,000.
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"We are trying to reconfigure our whole approach to affordability," said Faust. She also said the university was looking at how it sets tuition rates and stressed the importance that a Harvard education be "a shared responsibility and that individuals do contribute to their education." As a result of the "middle-income initiative," the university's financial-aid spending will jump to $120 million annually, up 22 percent from $98 million, making it the most generous of any of the country's academically elite, the Times stated.
Other Ivy League schools are following Harvard's example. Over the past two years, six of the eight announced similar plans to diversify their student bodies by slicing the hefty tuition prices, which averaged $38,878 for the 2007--2008 academic year.
Congress is considering a bill that would require universities to spend a portion of what their endowments earn on student financial aid. Harvard's $35 billion endowment is the largest in the country, according to the Times.
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