Harvard’s blockbuster announcement yesterday that it will give all scholarship recipients an extra $2,000 in need-based assistance will once again test the responsiveness of Yale administrators, who have shown remarkably uneven and reactive leadership on the financial aid front. With its compromise scholarship, work and loan plan — part innovation, part response to Princeton’s no-loan gambit earlier this month — Harvard has tossed $8.3 million more into its financial aid budget for the 2001-2002 academic year without sacrificing its commitment to the idea of a financial partnership between students and their university.

Harvard’s plan will decrease the average student self-help contribution from $5,150 to $3,150 annually, saving students about $6,000 over four years. That amounts to a staggering 40 percent cut in a student’s expected contribution for next year. Yale, by contrast, now requires an average self-help contribution per year of $6,020 for freshman and sophomores and $8,120 for juniors and seniors. More significantly, Harvard’s plan will allow students to pay off their self-help contribution through work or loans, an option the Princeton plan precludes by requiring work. Though it fails to guarantee no debt, Harvard’s new formula strikes a balance between the radical shift away from student payment represented by Princeton’s proposal and its own commitment to the concept of co-investment, which calls for a combination of student loans and university scholarships.

All this unfolds, once again, while Yale waits. President Richard Levin announced last week that the Corporation will put off a decision about how Yale will answer Princeton’s plan in kind until next year. With Harvard’s announcement, that decision looks increasingly unwise. As this page has said before, Yale should move to answer the Princeton no-loan plan either by adopting it wholesale or creating an alternative that reaches as boldly and broadly into the applicant pool for next year. Levin and the Corporation have so far demonstrated a frustrating inability to respond nimbly to the most important financial aid reform in the last decade.

Yale is now flailing in a field of competitors who have shown a greater capacity for institutional reform and innovation. This is not Yale’s finest hour, but in many respects it is one of its most revealing. The administration’s sluggishness in responding to Princeton’s bold financial aid move — indeed, its failure to innovate boldly in the area on its own — is emblematic of a reigning philosophy inside Woodbridge Hall best described as progressive hedging. Yale’s proclivity to ponder and pontificate over major initiatives effectively prevents it from making mistakes while also preventing it from being on the cutting edge.

While Yale offered philosophical objections to Princeton’s plan, Harvard worked to overcome the same concerns. While Yale talked of “shared burdens” and “partnership,” Harvard administrators forged a middle ground that may prove equally attractive — and effective — as Princeton’s departure from tradition. Harvard’s plan answers the question of how to reconcile Yale’s philosophical objections to no loans with Princeton’s effort to reach out to needy applicants who want to graduate debt-free. The only question left is when Yale will act on its own.