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Harvard University announced a sweeping
overhaul of financial aid policies designed to make
Harvard College more affordable for families across the
income spectrum. The new initiative focuses on ensuring
greater affordability for middle- and
upper-middle-income families through major enhancements
to grant aid, the elimination of student loans, and the
removal of home equity from financial aid calculations.
This initiative builds on Harvard's recent path-breaking
policies to ensure that families with incomes below
$60,000 are not asked to contribute to the cost of
sending their children to Harvard.
The new policy has three major components:
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The "Zero to 10 Percent Standard": Harvard’s new
financial aid policy dramatically reduces the amount
families with incomes below $180,000 will be expected to
pay. 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. For
those with incomes below $120,000, the family
contribution percentage will decline steadily from 10
percent, reaching zero for those with incomes at $60,000
and below. For example, a typical family making $120,000
will be asked to pay approximately $12,000 for a child
to attend Harvard College, compared with more than
$19,000 under existing student aid policies. The new
standard reduces the cost to families by one-third to
one-half, making the price of a Harvard education for
students on financial aid comparable to the cost of
in-state tuition and fees at the nation's leading public
universities. The new initiative also establishes a
standard that students and their families can easily
understand.
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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.
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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.
The new initiative amplifies Harvard's long-standing
commitment to need-based financial aid — Harvard College
awards neither merit aid nor athletic scholarships.
Under the new initiative, the College will continue to
consider individual circumstances in assessing a
family's financial need. Families with unusually high
medical or sibling educational expenses, for example,
may be expected to contribute less than the expected
percentage income, while those with substantial wealth
that does not show up as income may find that they are
expected to contribute a higher percentage.
Factors such as family size, health care costs, sibling
educational expenses, and other nondiscretionary
expenses that place a drain on family finances are
considered carefully in assessing a family's need, and
there is no income cut-off for need-based scholarship
eligibility. Currently there are more than 100 families
with incomes greater than $200,000 who, because of
extenuating circumstances, receive need-based financial
aid.
The new initiative is the latest chapter in Harvard's
systematic effort to increase affordability and widen
access for qualified students from across the economic
spectrum. In the winter of 2004, under the leadership of
President Lawrence H. Summers, Harvard transformed the
financial aid landscape with its announcement that
families with annual incomes below $40,000 would not be
expected to pay for their sons or daughters to go to
Harvard. The zero-contribution threshold was raised to
$60,000 in 2006, with further reductions in parental
contributions for families with incomes up to $80,000.
Over the past three years, the number of students in
these income ranges has increased by 33 percent,
representing a quarter of the entering Class of 2011.
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