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Harvard boosts financial aid

(Agencies)
Updated: 2007-12-11 11:35

Families earning well into six figures will see the cost of a Harvard education reduced by thousands of dollars per year under a major financial aid initiative announced Monday that is bound to draw attention far beyond the school's ivy-covered walls.

Harvard — whose $34.9-billion endowment is the largest of any university — already offered one of the most generous aid programs for low-income students of any private college, asking nothing from parents earning under $60,000.

Students from the Harvard Business School cheer as they receive their degrees during the 356th Commencement Exercises at Harvard University in Cambridge, Massachusetts June 7, 2007. Families earning well into six figures will see the cost of a Harvard education reduced by thousands of dollars per year under a major financial aid initiative announced Monday. [Agencies]

But its announcement Monday, the latest of several recently by elite colleges concerning financial aid, reflects a shift toward making top schools more affordable to middle- and even upper-middle-class families. Harvard admits its full list price of $45,620, while comparable to other elite private universities, is a burden to all but the most wealthy.

The school will now pump more than $20 million in new aid to a group that extends beyond the 90th percentile nationally in income. Harvard President Drew Gilpin Faust called the commitment "a response to the enormous stress that a particular group of families feel about the cost of higher education."

The announcement comes at a time when higher education as a whole is facing criticism from some in Washington for years of rising tuition prices. The wealthiest colleges have faced the greatest public pressure to either cut prices for all or boost financial aid to a broader range of students.

While awards vary based on factors such as number of children in college, Harvard already gave some aid to families earning as much as $200,000. Starting next year, a typical family earning $120,000 would pay about $12,000, down from $19,000 currently.

For a typical family earning $180,000, the payment would drop from more than $30,000 to $18,000.

Under the new plan, parents earning between $60,000 and $120,000 will pay a percentage of their income, rising to 10 percent. Families with incomes between $120,000 and $180,000 will have to pay 10 percent of their incomes, but no more.

Harvard also will no longer count home equity against parents in calculating what they can pay, and will replace all loans with grants — a step that a handful of peers have already taken.

Currently, about half of Harvard's 6,700 undergraduates receive financial aid.

Faust and Dean of Admissions and Financial Aid William Fitzsimmons said they had grown concerned that even students far up the income ladder were discouraged from applying by Harvard's list price.
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