After Harvard aid move, Yale makes ‘major’ promises

Updated Monday 11:15 p.m. Yale will make a “major announcement” regarding undergraduate financial aid at the start of the spring semester, University President Richard Levin told the News on Monday night.

His disclosure comes several hours after Harvard University unexpectedly unveiled a sweeping financial aid initiative that will reduce the expected financial contributions from middle- and upper-middle-income families and completely eliminate student loans.

The announcement swiftly and preemptively steals the spotlight from Yale, which has been criticized in recent years for playing catch-up in improving its financial aid offerings.

Financial aid was a major topic of discussion at this past weekend’s Yale Corporation meeting, Levin said, and the Corporation signed off on what Levin called a “major financial aid initiative.” Levin would not disclose any details of the planned reforms, only to say that it would be announced next month after all necessary details are worked out.

“We’re going to stick to that plan,” he said in a telephone interview. “Our timing is going to be early January.”

The News reported last week that the Corporation would consider financial aid reforms — including possibly reducing the required student contribution — at their meeting this past weekend. An announcement about new reforms was not expected until later this winter.

In the meantime, Harvard beat Yale to the punch.

Under Harvard’s new policy, families of undergraduates with yearly incomes from $120,000 to $180,000 will be asked to pay 10 percent of their income in tuition. Families making between $60,000 and $120,000 will pay between zero and ten percent of their yearly incomes.

The move will increase Harvard College’s financial aid grant budget by $22 million — more than 20 percent, the Harvard Crimson reported today, which university President Drew Faust called a “huge” but worthwhile investment.

“We are not tinkering at the margins, we are rebuilding the engine,” Faust said in a statement. “There is no more important commitment we could make.”

The new policy will cut the cost of attending Harvard by one-third to one-half for middle-income families, the statement said.

Harvard will also eliminate the need for student loans — as Princeton University did in 2001 — and eliminate home equity from financial aid calculations, which Princeton also does. Yale currently includes home equity in its calculations and makes student loans part of financial aid packages.

The news of Yale’s planned announcement should come as a relief to students who already began to criticize the University after Harvard made its announcement this afternoon.

Yale’s last major reform of its financial aid policies came in March 2005, when it eliminated the parental contribution for families making less than $45,000 and reduced contributions for families making between $45,000 and $60,000.

Comments

  • Anonymous

    Yale needs to match the policy, or better.

  • Anonymous

    If we don't meet them dollar for dollar, it will not matter in the slightest that we have the lone Single Choice Early Action policy among our peers. So much for a respectable yield.

  • Anonymous

    The timing of this announcement - 4 days before Yale's early applicants find out about being admitted - is clearly strategic. Yale Corp: ACT FAST!

  • Anonymous

    Yale: don't make our son regret that he has chosn you over Harvard in 2007, show your courage!

  • Anonymous

    Levin--While you may disagree fundamentally on eliminating loans, it seems that the consensus in higher education has decisively turned against you. Eliminate the loans, match the aid dollar for dollar, and bring us up to parity with Harvard.

    As a 'real' middle income student (i.e. not a $180,000/year 'middle class' student), I think that the focus should be on recruiting more extensively from these lower- and middle-income demographics, but without matching Harvard evenly, Yale will not sufficiently demonstrate the commitment to these groups that is needed to win these kids over.

  • Anonymous

    Interesting how Harvard will make people up to $180,000 pay only 10% and my family makes less than $150,000 and has to pay full tuition. 1/3 of our income goes to Yale. Beyond Harvard's new policy being far better than Yale's, even Yale's current policy is not sufficient.

  • Anonymous

    My family pulls in just shy of 160k a year, which by my estimate is pretty solid. However, my parents will not be able to retire on what little money they have because of how much of their money went to pay for college. They even borrowed against the house to pay for tuition. Now I am going to have to sell out and go defend some evil corporations in order to rake in enough to pay off my loans and take care of my family.

    It would be nice to go save the polar bears or pay 2 grand to go on a yale community service vacation in a third world country, but alas we do not all bleed blue.

    Frankly I am ashamed to say it, but Harvard does not suck as once as I once thought.

  • Anonymous

    It is about time an insitution did something about the inflation in elite college tuition. These increases have completely squeezed out the middle and even upper-middle-class, creating a strange rich and poor dynamic (I am sure that 90% of US high school gradautes can be defined as some form of middle class, but, from my experience at Yale, I can say that maybe 20% of yale's campus can). Even "middle class" families from my corner of CT who make over $200k/year wouldn't look at ivies because the tuition was so absurd. Yale should have used its resources to take the lead here instead of wasting its time and money planning some ridiculous campus expansion.

  • Anonymous

    Levin needs to rework his priorities. As great as growing our endowment, a close relationship with China, and expansion of the campus may be, student financial aid needs to be at the top. Perhaps he could get some of the brilliant financial minds in the endowment office to create a plan to help stem the burden of inflating college tuition prices.

    I'm tired of Yale constantly following in Harvard's footsteps on the financial aid issue. We need to be the ones taking the lead.

  • Anonymous

    great. during my senior year.

  • Anonymous

    One of the chief problems, I believe, is that Yale lacks leadership with vision. It has been a long time since it had a president with the qualities of Kingman Brewster. Instead, the current president drones on mechanically about internationalization and China, issues to which he has given very little serious thought. A leader with real vision would proclaim that Yale can, and should, be free.

  • Anonymous

    Harvard: Hey, kids; how'sabout a really neat finaid pack for Xmas, huh? How's that sound--and get this; only 10%!

    Yale: Me too, me too! Look! Over here! "Major Announcement!" (Honey, get me YDN on Line 2, STAT!) Me too!

  • Anonymous

    My son is a senior so any change Yale makes won't affect me--but my husband and I (total combined incomes 100K) will be paying off loans until we are 70. The hardship has been incredible and will remain so for years.

  • Anonymous

    The untold story here is that the YDN's corporation preview story last week disclosed that Yale had a major financial aid reform pending. Harvard officials read the YDN closely (e.g. their director of admissions, who is quoted in this paper frequently). The error Yale made was revealing the corporation agenda. It may well have motivated Harvard to act more quickly.

  • Anonymous

    Wow. 10%. Ten percent. Compared to a measly $8000 in financial aid on a family income of 110k. No question Harvard would have been my first choice if I were applying now. If you think Yale will come anything close to matching that, you don't know Yale very well.

  • Anonymous

    It's sad to see people complaining when the vast majority of the world's population is struggling to find roach protein. If Yale were truly innovative, it would spend more on fighting global poverty, not subsidizing upper-middle class families' BMW purchases.

  • Anonymous

    yale needs to match this initiative or better it. i don't need any reason to doubt my decision to apply to yale and yale only last year; do us proud!

  • Anonymous

    Well, at least William Strauss will be happy.

  • Anonymous

    "It's sad to see people complaining when the vast majority of the world's population [blah blah blah]"

    Oy oh shortsighted one: it is much better to create lots of giving, caring, high-earning philanthropists that pizz away the endowment on feeding the hungry (who, once fed, will simply make more mouths).

    Why do liberals never, never, NEVER understand that relationship?

    YOU are free to give away EVERY PENNY; YOU are free to work for a non-prof NGO
    BUT
    Who did more?

    The smelly, dreadlocked twenny-sumpin' liberal volunteer
    or
    Evil, bad, corporate mastermind capitalist pigdog
    BILL GATES?

    Who, in the end, gave more: folks whining for Yale to open up its endowment purse
    or
    The evil BASS FAMILY?

    Hmm?

    But back to the financial aid: I look forward to the unanticipated and skewing consequences when HYP cost less than, say, UMass; THAT is gonna be funny!

  • Anonymous

    What about families over 180k? Should they automatically be paying full tuition once they are over the line?

    If Yale is truly visionary and wants to be a leader in financial aid, then they should make all families of income over 120k pay 10% of income or full tuition, whichever is less. Let's see how Harvard and Princeton responds to that.

  • Anonymous

    Yale was not competitive in financial aid last year with other elite schools. If it does not at least match Harvard, it is really headed downhill. Given the wonderful job the endowment folks are doing getting great returns on Yale's billions, Yale could easily match. Let's hope it has the wisdom to do so. No loans and contribution maxxed out at 10% would be great. I feel so sorry for the folks above who say they will be paying off loans until they are 70. Also the comment above about few middle class kids at Yale compared to their percentage of the population is very telling.
    So Yale: Match, but do one better and get rid of term time work obligation as well.

  • Anonymous

    Yale should NOT match's Harvard new financial aid. The privilege of attending Yale is worth far more than Yale's tuition. I personally would never have wanted to go anywhere else. The sort of student who would choose a school only based on a few thousand dollars is not the sort of student who would have much to contribute to the Yale community. By offering less financial aid than Harvard, Yale may marginally decrease its yield by 2 or 3% (which would not be that harmful) and it could make sure to attract the sorts of students who are most committed to taking advantage of the Yale experience.

    When I was at Yale, my household income was under $50,000 and my parents contributed more than 10% of their income, and my family thought that Yale was already incredibly generous. Today's students take far too much for granted.

  • Anonymous

    Time is ticking away…

    The story is already at #2 on the NYT website.

  • Anonymous

    This is an awesome moment of opportunity for Yale

    Pretty Please, if Yale matches thumbs down harvard - make it retroactive for recent grads lol!

    -broke '06er

  • Anonymous

    Hopefully Yale will respond to this in some way that affirms this is, in fact, a place of learning, and not just a hedge fund with a boarding school facade.

  • Anonymous

    Better late than never. My daughter is a junior at Yale and will graduate with approx $20,000 of debt. My other daughter (Princeton graduate 2006) graduated with zero debt. At the end of each year we gladly give to Princeton's Annual Fund instead of Yale's - we can never repay all they have done for our family. Yale? We'll see…

  • Anonymous

    Furthermore, Yale needs to rethink its policy in split-parent households. It is ridiculous that they should have no options for students with divorced parents when one spouse refuses to help pay for tuition, and it is even more ridiculous to tell the student that the university can do nothing to help and that the problem lies with the student's relationship with the non-paying parent, not with the financial aid policy.

  • Anonymous

    Is Yale's fin-aid budget still about $60 mil of its $2-bil operating budget? Hilarious.

  • Anonymous

    Dear Levin and Storlazzi, I am a part of the Yale Alumni Phone caller program. I strongly urge you to augment financial aid. Our alumni are becoming discouraged from contributing because Yale (in their opinion) is not doing much to help the middle class. You best augment financial aid or you will lose the support of many alums along with students that must choose between Harvard, Princeton, and comparable schools. Act now!

  • Anonymous

    This story broke on the day I received my Alumni Fund contribution request. In the past, I have given regularly and been glad to do so. But the Harvard announcement and Yale's rather underwhelming response, combined with the widely-touted success of David Swensen's management of Yale's endowment in the past few years, are giving me pause as I consider how much or, indeed, whether to donate this year.

  • Anonymous

    One thing for Yale (and Harvard) to consider in this new for Harvard and, mark my words, soon to be new world of financial aid for Yale is the effort which parents did, or did not make, to save for their kids' college educations. Is the reason they can't afford tuition because they live in a McMansion, buy 2 new $50k cars every 3 years, take expensive vacations, etc? My family has always lived way below its means so we could save for expensive tuitions and so we could have money to retire too. Many (most?) people do not do this, figuring that somehow they'll get by. Now some of them will get by. Sometimes I wish I had been more shortsighted and my kids, too, would have been eligible for financial aid.

  • Anonymous

    Yale has a $300 million plan for new residential colleges? Yale won't need two new colleges if it doesn't change its financial aid plan. What is Yale's rule in terms of financial aid? Everybody gets to struggle, except for the wealthy?

    So my suggestion? Take that $300 million and put it into financial aid.

    And I know the admissions office cares about beating Harvard, but who gives a crap about Harvard. What about me? A student? Don't my financial needs count more than just keeping up with Harvard?

  • Anonymous

    I think what President Levin is planning to announce is a major cut in tuition to make Yale more affordable. A $4,000 per student cut would cost $20 million - less than what Harvard's increased financial aid will come to.