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.