YALE FOLLOWS HARVARD IN SWEEPING FINANCIAL-AID REFORM TARGETING MIDDLE-CLASS FAMILIES

Posted 1 p.m. Yale will reduce the cost of a Yale education for families making under $200,000, the University announced Monday afternoon.

Yale’s new policy, announced just over a month after Harvard University unexpectedly unveiled its own financial aid shake-up, strikingly resembles Harvard’s revamped financial aid offer. The expected contributions from families in income brackets up to $180,000 are identical to those laid out by Harvard, and like Harvard, Yale will eliminate the need for student loans.

But Yale will allow families making between $120,000 and $200,000 to contribute on average 10 percent of their income toward tuition, while Harvard limited the 10 percent contribution to families making up to $180,000 in its December announcement.

As at Harvard, Yale families earning less than $60,000 annually will not be asked to contribute toward tuition, while families making between $60,000 to $120,000 will contribute up to 10 percent of their total income.

The University will also reduce the amount that students are expected to contribute from their own earnings each year to $2,500, from $4,400. Students will be able to earn this by working on campus for about seven hours a week, according to the University’s announcement.

“Yale should be a college of choice for the very best and brightest students from across America and around the world, regardless of financial circumstances,” University President Richard Levin said in the statement. “We want all of our students to make the most of Yale – academically and beyond – without worrying about excessive work hours or debt.”

University spokeswoman Helaine Klasky and Director of Student Financial Services Caesar Storlazzi could not immediately be reached for comment early Monday afternoon.

The changes will increase Yale’s financial aid budget by more than $24 million, to over $80 million annually, which will be funded in part by increased spending from Yale’s endowment.

Levin announced last week that the University will increase the amount of money it spends from its endowment by 37 percent, to $1.15 billion, next year largely to provide more financial aid to students and to boost scientific research.

Yale will also tie its increase in tuition, room and board charges next year to the expected level of consumer price inflation, 2.2 percent, according to the statement. For the past few years, Yale has increased these costs by around 5 percent each year.

The statement did not explicitly state that Yale would exclude home equity from consideration in financial aid calculations, something that both Harvard and Princeton University now do.

The announcement followed months of heavy pressure from Yale students regarding the University’s financial-aid offerings.

An online petition posted last month calling upon the administration to match or surpass Harvard’s new financial aid package and to “commit to a position of leadership among peer institutions in promoting economic diversity and equality among students” had received over 1,000 signatures from the Yale community as of Monday morning.

On the social networking Web site Facebook, over 800 students joined a group in recent weeks urging Yale to expand its aid program.

In a Yale College Council financial-aid poll conducted over winter break, 54 percent of respondents said increased assistance for middle- and upper-middle-class families should be the University’s top financial aid priority.

More than one third of students — 1,815 — responded to the poll, which was emailed to the entire undergraduate student body between Dec. 30 and Jan. 3.

Yale last altered its financial aid policies in 2005, when the University 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

    Yeah!! Way to go President Levin and Yale Corp!No loans and tuition matching (not exceeding inflation)! I swoon!

    Clarify the home equity, K?

  • Anonymous

    oh Yale, always looking out for those cash-strapped members of the $180,000-$200,000 income bracket. Take that, Harvard.

  • Anonymous

    Hallelujah!

  • Anonymous

    Great News! Thanks Yale! It makes us feel good since our son picked Yale over Harvard.

  • Anonymous

    Go Yale! This is exactly what Harvard was missing: a way to take care of that oft-ignored 180-200K demographic!

  • Anonymous

    180-200k is not all that much in large families with multiple kids at expensive schools.

    So yeah, Thanks Yale.

  • Anonymous

    actually, if you read the schools press release its not clear what happens to the 180-200 group. YDN made a small leap there.

    Overall a phenomenal decision. Same as harvard with the plus being indexing tuition, the minus being home equity still being included.

  • Anonymous

    They really should stop calling this "financial aid." This gives the false impression that paying for college is a hardship for these families and that they need assistance from Yale to afford it. In fact, students are already receiving far more assistance than what they would need, and the extra money is more or less a bribe to attract the best students.

  • Anonymous

    To poster #8, maybe YOU wouldn't need help paying for Yale, but I know that at least 3 of my 6 suitemates would not be able to come if they were not receiving financial assistance from Yale.

    Yalies come from a huge range of socioeconomic backgrounds. The whole point of aid is so the students who are accepted can make the choice of where they want to go without the pressure of worrying that they will bankrupt their parents.

    Boola boola!

  • Anonymous

    Well, poster #9, poster #8 is right. It's a bribe. People at the $180K income level are still often willing to turn down Yale for, say, a full ride to a place like Duke. It IS a bribe, insofar that merit scholarships from other schools are also bribes.

  • Anonymous

    Its not so much a "bribe" as it is a … signing bonus.

    If there is a millimeter of space between the Yale counter bid and Harvard's original plan, you can be assured that Harvard will fill it. And juist think: we haven't heard from Princeton yet! The price war will no doubt be raging right up to April 1 and beyond.

  • Anonymous

    Why do some folks always have to be so freaking negative? Here is Yale unquestionably doing the right thing, and some people still bitch. Sheesh.

    #8 and #10 are way off base. This is greatly helping the folks caught in the middle--the middle being those above 60K but not in the "I can pay whatever" set.

    Also helps one plan for the future to know Yale won't get more than 10% of your income. Otherwise its a big crap shoot year to year for those of us whose income fluctuates a lot from year to year.

    So THANK YOU AGAIN YALE!!

  • Anonymous

    4:27 p.m. here. I agree that many Yale students would need at least some assistance, but the financial aid currently provided is far more than what they need. When I was at Yale 10 or so years ago, my family's income was below $60K, and I thought that Yale was being incredibly generous with the financial assistance that they were giving me (even though my family also had to pay a substantial amount).

    But financial aid today is far more than what it was only 10 years ago. The purpose of "financial aid" today is not to give students what they would need to be able to afford a Yale education, but rather to compete with Harvard, Princeton and, to a lesser extent, merit-based aid at other schools. I am not saying that this is necessarily wrong, but I just wish that we would recognize this for what it is.

  • Anonymous

    Yale should be free. President Levin, I appreciate your belief that students and families must "pay in" to fully appreciate the gift of Yale. I simply disagree with your understanding of psychology. This is how Yale should demonstrate leadership.

  • Anonymous

    I appreciate any extra help. I make far less than $60,000 a year and with three students in college (two at private institutions) and a fourth still paying off students loans from a private institution, any parental or student contribution is a hardship. I nearly faint every semester when I get the Yale bill. I suspect even at that, we are better off than many Yale families.

    Yeah, I have a ton of equity in our home because I've owned it so long, but that's California real estate--it's not real money unless I sell the place and with my income and indebtedness due to a long period of unemployment, I don't qualify for a loan of any kind. The next step for Yale should be excluding equity in one's primary residence.

    I am glad to see Yale moving in the right direction.

  • Anonymous

    How about the tution for the professional and graduate school students? Can they get the same
    help as do for the Yale College students?

    Concerned parents

  • Anonymous

    What about financial aid for SUMMER SESSION?

  • Anonymous

    Families with incomes in the $180-200K range often need financial aid - I do not think that the aid would necessarily be a "bribe". As 3:01 P.M.'s poster stated, consider families who have multiple students in college, mortgages to pay, and other 'assets' that may appear large on paper but are not realistically available to pay for tuition. I'm glad that Yale recognizes the burden that tuition placed on upper-middle income families as well as lower-income families.

  • Anonymous

    I don't understand how people can make self-righteous demands for more and better financial aid without blushing. Attending Yale is a big investment that almost inevitably pays off, albeit not always in monetary form. In our capitalist society, an opportunity to attend one of the finest colleges in the world is a privilege, not a right. I am glad that Yale is becoming more and more accessible, but that should be at Yale's discretion, not yours. While it is required to operate according to certain government standards (as a non-profit institution that receives government grants), it is a private institution that doesn't have a legally defined obligation to offer affordable education to everyone. I understand there are many talented individuals who cannot afford a yale education, and I am glad to live in a society which tries to tap into those potentials, but at the end of the day, a BMW dealer shouldn't be required to hand out free cars to low-income drivers with great safety records. It would be nice if they did (for brand promotion? out of concern for the humanity? whatever the reason may be), but it shouldn't be required.

  • Anonymous

    Well done Yale! But what happened to the tax on financial aid for internationals (or foreign students as OPA might call us)?
    As a senior, I have worked for four years to raise more than an extra $1500 each year to cover this tax but please relieve future classes of this burden and more importantly COME CLEAN about it when you admit new students and promise them full aid.
    Yale, please put your money where your (internationalization) mouth is…

  • Anonymous

    @concerned parents,

    On a prior article, I already pointed out to you that grad students get paid to be at Yale.

    @anonymous,
    Regarding summer session - it exists to generate revenue.

  • Anonymous

    I'm a parent of a current Yale student. Our family income is under $100,000. However, because we started, with help from our parents, putting aside money for college when our daughter was an infant and we have other assets, we have never qualified for financial aid from Yale. Nothing in the current press release leads me to believe that this will be different under the new policy. In effect, we are being penalized for having been thrifty. But that's OK because, in the end, our daughter will still have a Yale degree and, if not priceless, that's still a wonderful thing!

  • Anonymous

    What about the 200k-300k+ bracket? Our hedge funds are all blowing up. Also, we are the ones who suffer the most from the dollar's depreciation, especially against the European currencies.

  • Anonymous

    As nice as the cuts are, I think transparency and simplicity in the calculations are just as important. That's why Harvard's 10% plan was such a hit. Before, there was no clear answer to how much aid a family one would receive. Now, it's clear: annual income $73k -> pay $7.3k. With the Yale plan's "averaging" and ambiguous treatment of assets, the opaqueness continues. Who knows how many hidden tripwires and catches will remain in the computation algorithms.

    In the end through, it's entirely in the spirit and tradition of Yale to offer a financial aid package that lags behind Harvard and Princeton. Yale is a more elitist institution.

  • Anonymous

    Please help the professional students! Law and med students going into public service careers, as well as pretty much all architecture students, are saddled down by debt for life! All this while the undergrads whose parents are making $200k a year will be getting super cheap tuition even though they are headed straight for cushy $150k ibanking jobs right after senior year… let's be fair!!

  • Anonymous

    Are professional / architecture students going to see ANY of this increased spending on aid? As daunting as undergraduate debt is, the debt from these schools is simply awesome and can seem insurmountable - and this often has unfortunate yet direct implications regarding career choice.

  • Anonymous

    This is long overdue. Thank you, Yale! My only regret is that my own parents will never feel the great sense of relief that this would have brought three, two, or even one year(s) ago.
    ~A graduating senior

  • Anonymous

    Thank you so much Yale and of course, our Lord almighty God for answered prayers. My daughter is a freshman and it has been a nightmare to financially complete this first year . So this new package would be a wonderful, helpful relief. Thanks again, Yale. It would be nice to also consider not using the home equity in the calculation of financial aid. May God be praised.

  • Anonymous

    @10:37, harvard's plan averages also, as far as i understand it

  • Anonymous

    As middle-class parents, we are grateful for Yale's new policy. But as others have mentioned, the home equity decision is unfortunate. We also live in California in a very modest home that is almost paid off - our only asset - but clearly the reason our financial aid is meagre. Why is there no consideration of cost of living differences in different parts of the country? I find it hard to believe that Harvard and Princeton "economists" didn't weigh in in their decisions not to include home equity in the equation. There must be another way to ensure people don't "hide" their assets in their home.

  • Anonymous

    This is GREAT!!!! Totally love it….and send thanks to Yale.

    However the home equity issue will need to be quickly resolved to match what already exists at Harvard & Princeton…

  • Anonymous

    so here's my question: does yale still put students on "bursar's hold"…in the 80s and 90s, you could sit on bursar's hold for nearly the entire semester waiting for the finances to be settled if your parents were having trouble paying…it was mortifying to live like that…hope that's a thing of the past.

  • Anonymous

    Which graduate students does Yale pay to come to their school? Does every graduate school at Yale do this or just specific ones? It really would be helpful to know what to anticipate financially as a lower/middle class family before we accept admission to the PA program there.