<p>From WSJ:
Harvard</a> Trims Tuition Bills for Families - WSJ.com</p>
<p>Do they ignore assets?</p>
<p>^ for families with typical asset for the income level:</p>
<p>Harvard</a> announces sweeping middle-income initiative — The Harvard University Gazette</p>
<p>The “Zero to 10 Percent Standard”: Harvard’s new financial aid policy dramatically reduces the amount families with incomes below $180,000 will be expected to pay. Families with incomes above $120,000 and below $180,000 and with assets typical for these income levels will be asked to pay 10 percent of their incomes. For those with incomes below $120,000, the family contribution percentage will decline steadily from 10 percent, reaching zero for those with incomes at $60,000 and below. For example, a typical family making $120,000 will be asked to pay approximately $12,000 for a child to attend Harvard College, compared with more than $19,000 under existing student aid policies. For a typical family with $180,000 of income, the payment would be approximately $18,000, compared with more than $30,000 today. The new standard reduces the cost to families by one-third to one-half, making the price of a Harvard education for students on financial aid comparable to the cost of in-state tuition and fees at the nation’s leading public universities. The new initiative also establishes a standard that students and their families can easily understand.</p>
<p>That's somewhat sad. On one hand, it's great that they're helping out more, but at the same time, if the family can pay, why not make them? As the article suggests, other top privates are going to be forced to take on similar initiatives, and then what about the not-quite-so-top privates like USC and Tufts and NYU? And this isn't even counting the publics. They're gonna get really screwed over with this.</p>
<p>Here's a relevant article:</p>
<p>The</a> dangerous wealth of the Ivy League - BusinessWeek.com - MSNBC.com</p>
<p>^Kyle, I read that article before. It's interesting, but if Bill Gates' 50 billion is not scary, why should Harvard's 36 billion? This is a capitalistic society.</p>
<p>kyledavid80, that's faulty logic. </p>
<p>Harvard's new initiative targets families between 120k and 180k. My family falls in that range. Suppose you have a family of four with a gross annual income of 150k. </p>
<p>After federal, state, local, and FICA taxes, you get less than 100k net. And likely something closer to 90k - something you might not have thought about. This family of four pays for insurance, mortgages, piano lessons (and the like), food, and other little expenditures that very quickly add up. Having to shell out around 30k annually is a significant financial burden - by no means is it something that families in this income bracket can just pay on a whim. </p>
<p>I applaud Harvard for going forward with this initiative - they really don't need much more to attract top applicants; what they're doing is allowing students that do get in to enjoy all the resources they have to offer without having loans on their minds. If other schools feel pressured to do this, so be it. It's healthy competition anyway - like Professor101 says, this is a capitalist society.</p>
<p>Professor101:</p>
<p>
[quote]
It's interesting, but if Bill Gates' 50 billion is not scary, why should Harvard's 36 billion? This is a capitalistic society.
[/quote]
</p>
<p>For one, I never said Bill Gates' money wasn't scary. =p But the reason that Harvard's is scary is that it's putting a drain on higher education, literally. It, along with the other top privates, are soaking up the resources and leaving other universities behind. All this is described in the article.</p>
<p>socalcollege: When I made that comment, I did not specify which income level I was speaking of specifically. I'm well aware that taxes will skew the income, but the fact still remains that in the past, families of that income level have gotten by just fine paying for Harvard. And I'll say again, this initiative (very obviously ambitious) will in effect force privates like Stanford, Penn, MIT, etc. to have similar policies. Sure, it's a great policy, but look to the article I posted. Its effects, as I see it, may not be quite so great.</p>
<p>
[quote]
It's healthy competition anyway - like Professor101 says, this is a capitalist society.
[/quote]
</p>
<p>Recognizing it as such does not excuse it. It may be "healthy competition" among tippy-top privates, but where are the rest of the students left? We all know that only a tiny fraction of students get into those privates. So what's left for those who didn't get in? Harvard, along with its private peers, are sucking the life out of elite education with programs like this. This, of course, is just a small step in such an action, but it still contributes to it.</p>
<p>the real problem, speaking as someone who has to pay the tuition, is that college tuition has been rising so much faster than inflation for so many years. When I have visited college campuses with my children, I am struck by the extent to which they are becoming like country clubs - the buildings and amenities are getting progressively more lavish. And so many of them talk blithely about all the money they have available for students to do x, y and z.</p>
<p>As many commentators have said, there isn't a fiscally conservative bone at any of these schools. It has become something of an arms race to see who will spend more lavishly, and meanwhile, the tuition bills, which apparently don't even cover costs, continue to skyrocket.</p>
<p>"Harvard, along with its private peers, are sucking the life out of elite education with programs like this."</p>
<p>So you're saying that making a college education more affordable, thereby pressuring other institutions to do so is a bad thing? Harvard and its peer schools have enough in endowment income to do this - I'd much rather see them divert their funds to financial aid than other things. What would you rather Harvard do? Gift some of their $35 billion to other "needier" schools?</p>
<p>There are enough threads on CC discussing the article - it's one of the most biased pieces I've read on BusinessWeek. </p>
<p>An arms race for faculty <em>may</em> be damaging, but I still don't see how encouraging universities to make education more affordable can possibly be a bad thing.</p>
<p>Yale is also planning a financial aid announcement:</p>
<p>Yale</a> Daily News - After Harvard aid move, Yale makes 'major' promises</p>
<p>If Stanford doesn't do something, its yield is probably going to drop, which is good news for the waitlist.</p>
<p>I think with Yale-Princeton-Harvard all beefing up their financial aid, especially for upper middle class students, what choice do they have? These are bound to be some of the applicants that turn down state schools with merit aid for top schools - now they are going to have to choose between Harvard @ $17,000 and Stanford at $50,000. Which do you think will win that battle? </p>
<p>Even so, I have a feeling that Stanford is going to be just as stingy as they have always been. Heck, Duke recently announced that all families below $60,000 in income will have to pay nothing. Stanford is still at $45,000. Duke's endowment is a third of Stanford's. I don't want to get into a finance analysis of Stanford and other top schools. I just hope that Stanford meets Harvard's new policy, both for my budget and Stanford's yield rate this year. It's getting really embarrassing that we have a record fundraising drive last year ($911 million in donations), and are still stingy with financial aid.</p>