Dramatic new financial aid formula could prompt other colleges to follow suit.
In a move seen as likely to accelerate an ongoing trend among elite colleges, Harvard University announced Monday that it will sharply increase financial aid for undergraduate students from middle-class and wealthy families.
The Cambridge, Mass., university will overhaul its current financial aid program in favor of a relatively simple formula: Beginning next fall, families earning more than $60,000 will pay a percentage of their annual income for tuition and fees, rising to 10 percent for those earning between $120,000 and $180,000 a year. As of last year, families earning $60,000 a year or less pay nothing.
Harvard also announced that it would not expect students to take out loans and would no longer consider home equity in determining a family's ability to pay tuition.
"We want all students who might dream of a Harvard education to know that it is a realistic and affordable option," said Harvard's president, Drew Faust, in The Harvard University Gazette, an official magazine of the school.
"Education is fundamental to the future of individuals and the nation, and we are determined to do our part to restore its place as an engine of opportunity, rather than a source of financial stress," said Dr. Faust. "With no loans, no consideration of home equity, and a dramatic increase in grant aid, we are not tinkering at the margins, we are rebuilding the engine."
Harvard's initiative would increase the total grants to students to $120 million, up from the current $98 million. It will pay for the increase with its $35 billion endowment and from fundraising.
Harvard's move could prompt more efforts by other institutions, especially those that have already been contemplating ways to increase affordability, says Tony Pals, spokesman for the National Association of Independent Colleges and Universities (NAICU).