Harvard University’s unexpected announcement Monday of sweeping financial-aid reforms has left members of the Yale community wondering when Yale will step up to the financial-aid plate — and attempt to match Harvard’s recent home run.

Harvard’s new initiative — which university officials said will reduce the expected financial contributions from middle — and upper-middle-income families by between one-third and one-half — has created a buzz within the Harvard community, as well as among outside observers who are anticipating a similar announcement from Yale officials in the next month or so.

Current Yale students, high-school guidance counselors and prospective students interviewed warned that if Yale does not respond with substantial financial-aid reform, the University could lose prospective applicants and accepted students, and its reputation for welcoming students regardless of socioeconomic status could be tarnished.

“There’s no doubt that if schools want to compete for the best students … they’ve got to be competitive in every area, and that certainly includes financial resources,” said Wade Boggs, a college counselor at the private Westminster Schools in Atlanta. “It’s very important for schools to keep up with the Joneses as far as they can.”

Yale will make a “major announcement” on undergraduate financial aid in early January, University President Richard Levin said Monday night, although he declined to disclose any details of the planned reforms.

Director of Student Financial Services Caesar and Yale Dean of Undergraduate Admissions Jeff Brenzel referred all comment to Levin.

Under Harvard’s new policy — which will take effect for the 2008-’09 school year — 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 10 percent of their yearly incomes.

Harvard’s policy shift could change the admissions playing field this year, college guidance counselors and college-admissions experts said.

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

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

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 has also done. Yale currently includes home equity in its calculations and makes student loans part of financial-aid packages.

David Hawkins, public policy director at the National Association for College Admission Counseling, said he expects the number of applicants to Harvard to rise this year in the wake of Monday’s announcement. The percentage of students who accept Harvard’s offer of admission — known as its yield — will also likely increase this year, he said.

“So much of students’ decisions about college are related to the financial burden they will have to assume,” Hawkins said. “I would be hard-pressed to find somebody who would pass up an offer that’s as generous as that.”

But Yale’s yield will not necessarily suffer by comparison, given that the applicant pools at the two schools are not identical, Hawkins said.

Jamila Ma, a senior at Stuyvesant High School in New York City, is one high-school student whose matriculation decision may be swayed by the terms of Yale’s new financial-aid initiative.

Ma, who said she applied early action to Yale but is planning to apply to Harvard regular decision, said if she is accepted to both schools, any substantial difference in the financial-aid packages offered by the two schools would significantly impact her decision.

The half-dozen Yale students interviewed said they hope the University will enact significant financial-aid reform in January.

Andrew Williamson ’09, a member of Yale Students for Financial Aid Reform who wrote a column in today’s News, said he thinks money the University is currently spending on resources abroad, such as the Yale-in-China program, should be devoted to financial aid to improve “Yale-in-New Haven” first.

He said the language of Harvard’s announcements conveys a “profound” philosophical difference between Harvard and Yale on financial aid.

Other students said Harvard’s sweeping announcement has left Yale playing catch-up — and not for the first time.

“I think that this is another instance where Yale is not taking the high road, as [Harvard did] with early action,” Audrey Huntington ’11 said, referring to Harvard’s decision last year to abandon its early-admissions program. “We’re not the forerunner in making higher education more accessible.”

Levin said the University had been planning its major policy change before Harvard’s announcement Monday and will stay with the original January release date.

Yale College Council President Rebecca Taber ’08 said Harvard’s move will provide impetus for the YCC to continue pressuring the administration to reform financial aid.

In a YCC financial-aid survey of 700 undergraduates conducted last month, 67 percent of respondents said they think their required financial-aid contribution is “high” or “too high.” Last week, Storlazzi told the News he was planning to review and discuss the YCC findings with other members of the administration.

But Ilene Abrams, a college adviser at the public Berkeley High School in Calif., said she thinks Harvard’s announcement may actually end up hurting low-income students.

Other colleges with smaller endowments that do not promise to meet full financial need may now feel pressured to increase their own aid to middle-class families, she said. As a result, such schools might decide to increase the amount of merit aid they offer, which could shrink the pot available for need-based aid at these schools, she said.

“Harvard and Yale can offer as much need or merit aid as they want because they have large endowments,” she said. “Many public schools can’t do this.”

In March 2005, Yale eliminated the parental contribution for families making less than $45,000 and reduced contributions for families making between $45,000 and $60,000.

— Raymond Carlson and Zachary Abrahamson contributed reporting.