December 10, 2007

Harvard U. Announces Financial-Aid Plan for Middle-Income Families

Middle-class students of America, Harvard University wants you to forget about the annual cost of studying in Cambridge, Mass.: $45,620.

This morning, Harvard officials announced that they will ask families who make between $120,000 and $180,000 to pay 10 percent of their annual incomes. Under the current policy, families making $120,000 per year pay about $19,000.

Starting in the 2008-9 academic year, families with incomes below $120,000 will pay 10 percent or less, with family contributions declining to zero for parents making $60,000 or below.

Harvard also announced that it would eliminate loans from financial-aid packages, and that it would no longer consider home equity in calculating a family’s ability to pay.

Officials at the university said they would increase their spending on aid to about $120-million from $98-million annually. —Eric Hoover

Comments

1. Harvard’s endowment is close to forty billion. At a modest rate of return from this endowment, they should at least double the amount to about $200-million for financial aid annually.

   — Steve    Dec 10, 04:41 PM    #

2. Oh yes, Steve. It’s not like Harvard has to pay for anything else out of its endowment earnings… I applaud Harvard for making an Ivy League education more affordable to the middle class.

   — GS    Dec 10, 04:54 PM    #

3. If they were really interested in helping out the middle class, they would give $200 million to fund scholarships at regional universities like Duquense, Tennessee-Knoxville, U. of Tulsa, Florida International, etc. These schools serve the middle class much more than Harvard does and would also provide more bang for the buck. Harvard and other schools with bloated endowments should put the money to use for the public good (after all, the endowment and payout are not subject to taxes), rather than seeking to constantly grow the size of their endowments. Otherwise, they should be subject to taxation or forced to spend down the endowment to a reasonable level.

   — Brian    Dec 10, 05:35 PM    #

4. Middle Class = $120-$180K. Are you kidding? Any household with income > $120K should be able to afford full tuition with loans. Instead Harvard should be offering 100% scholarhsips for those families that earn less than $65K annually

   — Nick    Dec 10, 06:07 PM    #

5. I think they largely are, Nick. Right? Family contributions decline to 0% of income at $60,000 annual income, with no loans. That’s 100% scholarship – free ride, etc. Which then gets to the first comment’s point as well: if Harvard doubled its aid budget, who would they be giving it to given full free rides below $60K, with a sliding (and low) percentage of family income above that, topping out at 10% from $120K – $180K. Answer: they’d be giving very generous aid packages to those making $180K and above. Is that what you want?

   — David    Dec 10, 07:59 PM    #

6. What is Harvard saying to parents? Sounds like this: Make lots of money—that is, do for a job that requires high intelligence, high demand, long hours, high risk—and Harvard makes you pay full fare if your kid qualifies. But settle for much less money—that is, take a job that only requires so-so intelligence, less demand, fewer hours, and no risk—and Harvard says you don’t have to pay a cent if your kid can get in. What kind of message is that? It’s penalize the successful competitors and sentimentalize the mediocre ones. “From each according to his ability, to each according to his need.” How generous, and how witless. Harvard should say just the opposite—if parents are highly successful, they don’t have to pay a dime. That would encourage the right kind of families to apply, not the wrong kind. Harvard could figure this out, but they won’t.

   — Mike    Dec 11, 01:10 AM    #

7. So what all you whiners are saying is Harvard can’t do anything right.
   Or are you all somehow jealous of the intitution or the relative success they have had? Take a good look at your motivations for these comments people.

   — Critic    Dec 11, 07:02 AM    #

8. Mike, your arrogance and “lower intelligence” are showing. It is apparent you have never worked in academia where the demand is extremely high, intelligence is required, hours are long and pay in low – and I am not even thinking about the public institutions. These folks educate the “successful competitors” and/or keep the universities running. Per your definition of intelligence equaling enormous pay, they apparently are not smart enough to do the job. Maybe you should go back to class and learn how to think logically!

   — Brenda    Dec 11, 07:53 AM    #

9. Harvard is already free for families making less than 60k per year. This new aid plan helps all the families who have 2 working professional parents. If a family makes 180k per year, 60k is given to taxes before they even get a chance to see it. If they have two kids going to Harvard after that, then without financial aid that leaves only 30k left. Thats reducing their after tax income by 75% which is a major burden. Its not fair to punish parents just because they decided to go to graduate school and take on more loans earlier in their lives.

   As for Harvard’s endowment, most of that isn’t in liquid assets. A lot of it is in the value of the land the University owns in Cambridge and Boston, as well as the hundreds of labs with high-tech research equipment, and the second largest library system in the world. Its not really fair to tax Harvard for items and land its owned for hundreds of years.

   IF I went to a state school, it would cost me less for four years there than one year here. To make up that money, my parents will probably not retire until late in their sixties or early seventies. This new plan just pushes back those concerns to the point where no one really could complain about the level of aid they are getting.

   Why should families where only one parent works for exactly 60k and the other does nothing get a free ride when families with 2 professional parents working 45 hour weeks each would have to pay almost the full cost?

   So while you all can argue about how “privileged kids” are getting a cheaper education, just remember that most of the time, our parents had to work their asses off to get to that level of income, and its not their fault that they have had a degree of success in the workplace.

   — Harvard "middle class" Freshman staying up way too late in the Library    Dec 12, 03:39 AM    #

10. When I went to college academic scholarships paid for full tuition and I was able to work for what I needed for room, board, books and other expenses.

    When my daughters went to college there were few academic scholarships not earmarked for sports. They both received little help with tuition. The two tuitions and college expenses left little money after paying the second mortgage. Both girls worked before during and after high school and college, but even with that the loans that we all carry to fund their undergrad education made grad school out of reach on my teacher’s salary. Both young women worked for a few years to pay down their loans and save money for graduate work.

    Perhaps I should have followed others into more lucrative professions that required “high intelligence, high demand, long hours, high risk” instead of becoming an educator. I am sad to report that both of my daughters have followed my example and become teachers. They are both extremely intelligent and could have gone into fields that paid better.

    Personally, I think that anyone who qualifies for Harvard admission is a gifted student and should not be denied a place because their parents chose professions that pay under $200,000 a year. The best minds are not always bred by the parents with the most money. A quick review of the current crop of “jet setters” should make that clear.

    Bravo to Harvard for taking a step to keep their doors open to the middle class. I hope many other top schools follow their lead.

    — Margaret    Dec 12, 08:22 AM    #

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