WSJ: Harvard moves to cut prices among worries about affordability

[wisteria]

<p>

Harvard University sweetened its financial aid for middle class and upper middle-class families, responding to criticism that elite colleges have become unaffordable for ordinary Americans.</p>

<p>The Ivy League school said undergraduates whose families earn up to $180,000 would be asked to pay 10% or less of their incomes annually for the cost of Harvard, which this year totals $45,456. The university said the initiative would reduce the cost of attending the college by one-third to one-half, making the price comparable to in-state tuition and fees at top public universities.</p>

<p>For example, the university said a family making $120,000 will be asked to pay about $12,000 for a child to attend Harvard College, compared with more than $19,000 under current student-aid policies. A family making $180,000 would pay $18,000, down from $30,000.</p>

<p>At lower income levels, families would pay a smaller percentage of income, declining to zero at $60,000 a year. Harvard said it would eliminate loans from all financial-aid packages and no longer consider home equity in calculating eligibility.

</p>

<p>source:<br>
[Free</a> Preview - WSJ.com](<a href=“http://online.wsj.com/article/SB119731017194819610.html?mod=hps_us_whats_news]Free”>http://online.wsj.com/article/SB119731017194819610.html?mod=hps_us_whats_news)</p>

<p>more here:
[Harvard</a> announces tuition increase, rise in aid - The Harvard University Gazette](<a href=“http://www.news.harvard.edu/gazette/2007/03.22/03-tuition.html]Harvard”>http://www.news.harvard.edu/gazette/2007/03.22/03-tuition.html)</p>

[hazmat]

<p>[The</a> Harvard Crimson :: News :: Harvard To Expand Aid to Middle- and Upper-Class Families](<a href=“http://www.thecrimson.com/article.aspx?ref=521246]The”>http://www.thecrimson.com/article.aspx?ref=521246)</p>

<p>

**Currently, 763 families of Harvard undergraduates make between $120,000 and $180,000 dollars yearly, according to William R. Fitzsimmons '67, the College’s dean of admissions and financial aid.

**</p>

[TutuTaxi]

<p>

A family making $180,000 would pay $18,000, down from $30,000.

</p>

<p>A family with an AGI of 180K wasn’t full freight (45K+) before? Or are they talking tuition only versus tuition plus R&B?</p>

[wisteria]

<p>

Or are they talking tuition only versus tuition plus R&B?

</p>

<p>Harvard’s financial packages are generally stated as an EFC against total cost of attendance (COA), which includes room & board, books, travel, incidental expenses.</p>

<p>On the other hand, there is also a separate “self-help” student contribution, separate from the parents’ EFC. The self-help can be met by a combination of summer earnings, work-study during the academic year, outside scholarships, and loans. The standard “self-help” amount is $3,850 per year, but can be reduced to zero by outside scholarships.</p>

<p>[Self-Help</a> Reply Form](<a href=“http://www.fao.fas.harvard.edu/students/selfhelp.html]Self-Help”>http://www.fao.fas.harvard.edu/students/selfhelp.html)</p>

[marite]

<p>The official announcement:</p>

<p>[Harvard</a> announces sweeping middle-income initiative — The Harvard University Gazette](<a href=“http://www.hno.harvard.edu/gazette/2007/12.13/99-finaid.html]Harvard”>http://www.hno.harvard.edu/gazette/2007/12.13/99-finaid.html)</p>

[hazmat]

<p>Tuition $31,456</p>

<p>Health Services Fee $1,426</p>

<p>Student Services Fee $2,116</p>

<p>Room $5,856</p>

<p>Board $4,766</p>

<p>Subtotal - billed costs $45,620</p>

<p>Estimated Personal Expenses $2,930</p>

<p>Estimated Travel Costs $0 - $2,400</p>

<p>Total billed and unbilled costs $48,550 - $50,950</p>

<p>In addition, health insurance coverage is required, at a cost of $1,362 unless the student is covered under the family’s health plan.</p>

<p>[Harvard</a> College Financial Aid Office - Fact Sheet](<a href=“http://www.fao.fas.harvard.edu/fact_sheet.htm]Harvard”>http://www.fao.fas.harvard.edu/fact_sheet.htm)</p>

[wisteria]

<p>From marite’s link above, Harvard is also eliminating loans as a standard part of student self-help and will no longer consider home equity as an asset.

• No Loans: In calculating the financial aid packages offered to undergraduates, Harvard will not expect students to take out loans. Loan funds will be replaced by increased grants from the University. Of course, students will be permitted to cover their reduced cost of attendance through loans if they wish.</p>

<p>• Eliminate Home Equity from Consideration: Under the new policy, Harvard will no longer consider home equity in determining a family’s ability to pay for college. This will reduce the price by an average of $4,000 per year for affected families as compared with current practice.

</p>

[wisteria]

<p>more coverage:</p>

<p>

University officials said their surveys showed even students from well-off families were feeling the pinch by having to work outside jobs and not being able to fully engage in the life of the university. Harvard officials also worried prospective applicants were scared away by the school’s cost.</p>

<p>Dean of Admissions and Financial aid William Fitzsimmons said Harvard had grown concerned students were having an “Upstairs, Downstairs” experience. “On the one hand the more affluent students had full access to the full Harvard experience in its totality. But this chunk of people … 53 percent of the population, we felt were having a diminished experience.”

</p>

<p>[FOXNews.com</a> - Harvard Boosts Financial Aid - Local News | News Articles | National News | US News](<a href=“http://www.foxnews.com/wires/2007Dec10/0,4670,HarvardFinancialAid,00.html]FOXNews.com”>http://www.foxnews.com/wires/2007Dec10/0,4670,HarvardFinancialAid,00.html)</p>

[coureur]

<p>Well, NOW they decide to have mercy on me - now that we are just now writing the check for D’s last semester.</p>

[wisteria]

<p>This could launch an interesting price war. Only a relative handful of colleges have the deep pocket endowments to respond, however.</p>

[TutuTaxi]

<p>I guess I’m still confused. Before this change was an upper middle class family w/ AGI about 180K and home equity approx 750K……………….expected to pay 30K/year not the full freight amount? Now with the change their EFC is 18K/year?</p>

[xjayz]

<p>Again, remember, it’s not only about AGI… they take into consideration all sorts of factors, including savings, etc.</p>

[Muffy333]

<p>The current financial aid doesn’t look right to me either…my income is way under $180,000 and my EFC is higher than $30,000.</p>

[xjayz]

<p>Is that your EFC from Harvard or FAFSA?</p>

[wisteria]

<p>

I guess I’m still confused. Before this change was an upper middle class family w/ AGI about 180K and home equity approx 750K……………….expected to pay 30K/year not the full freight amount? Now with the change their EFC is 18K/year?

</p>

<p>The $30K current figure doesn’t seem entirely implausible–a similar family would have an EFC even lower than $30K under Princeton’s current policies. You can use the Princeton financial aid estimator below to compute Princeton’s EFC for a family with $180K.</p>

<p><a href=“https://sweb.princeton.edu/cgi-bin/FinAid/finaid_form.pl[/url]”>https://sweb.princeton.edu/cgi-bin/FinAid/finaid_form.pl&lt;/a&gt;&lt;/p&gt;

<p>A family with only one child and with no significant assets other than home and retirement accounts would have an EFC of well under $30K at Princeton even under their current policy. (Until today, Princeton’s policy was considered the most generous around. One imagines they will have to adjust their formula in response to Harvard’s.)</p>

[Muffy333]

<p>estimated its low $30,000 from FAFSA and high $30,000 with CSS (Princeton calculator says $40,000)…don’t have the exact #s, but I’m pretty sure people with $180,000 don’t expect anything at present unless they have multiple kids in college</p>

[wisteria]

<p>Muffy, a few schools, led by Princeton and Harvard, have had formulas signficantly more generous than FAFSA and CSS for several years, even before today’s announcement. Try plugging your numbers into the Princeton financial aid calculator I linked above.</p>

<p>EDIT:

@muffy

estimated its low $30,000 from FAFSA and high $30,000 with CSS (Princeton calculator says $40,000).

</p>

<p>This must be a very unusual set of circumstances. It is rare for Princeton to come in higher than CSS, so I would double-check your entries. Make sure you did not include retirement assets or home equity (since Princeton doesn’t count them) and that you plugged in the other information (e.g., federal taxes) correctly.</p>

[wisteria]

<p>

Again, remember, it’s not only about AGI… they take into consideration all sorts of factors, including savings, etc.

</p>

<p>Indeed, and not all assets are counted similarly as curmudgeon is fond of pointing out. Small business owners may have signficant assets that are not very liquid but that could still increase the EFC.</p>

<p>The Harvard Gazette article linked by marite states:</p>

<p>

Families with incomes above $120,000 and below $180,000 and with assets typical for these income levels will be asked to pay 10 percent of their incomes.

</p>

<p>[emphasis mine]</p>

<p>It would be interesting to know what Harvard considers “assets typical for these income levels” to be.</p>

[danas]

<p>[Princeton</a> University | Who Qualifies for Aid?](<a href=“http://www.princeton.edu/admission/financialaid/how_it_works/who_qualifies/]Princeton”>http://www.princeton.edu/admission/financialaid/how_it_works/who_qualifies/)</p>

[Muffy333]

<p>I recalculated; Princeton says $18,000!!!</p>

<p>what other schools are like this? It’s the home equity that kills me!</p>