The Wall Street Journal-20080115-Yale Joins Financial-Aid Push- Some Families Could See Tuition Drop by a Half
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Yale Joins Financial-Aid Push; Some Families Could See Tuition Drop by a Half
Yale University, following a similar move by Harvard, said it will enhance financial aid for middle- and upper-middle class families beginning this fall.
Responding to concern that elite universities are becoming unaffordable for most Americans, Yale said undergraduates whose families earn between $60,000 and $120,000 will typically pay between 1% and 10% of their incomes to attend the Ivy League school. Yale currently charges $45,000 a year for tuition and other fees. Because of these moves, Yale said it will cut the school's costs for families receiving financial aid, on average, by a third to a half. Right now, 43% of Yale's 5,300 undergraduates receive financial aid.
Parents whose incomes are below $60,000 will pay nothing toward college. Currently, families who earned less than $45,000 get a free ride. The school said it also will drop all loans from financial-aid packages, matching a number of other colleges that recently have taken the same step. Yale President Richard C. Levin said the moves will make the school affordable "regardless of financial circumstances."
Yale said that families with incomes above $120,000 that qualify for financial aid will pay an average of 10% of their income for tuition and other costs. For example, the university said a family earning $180,000, with one child in college, will pay $25,550 for a year of school under the new policy, compared with $42,550 before. That family will pay substantially less if it had two children in college at the same time.
The announcement comes as Congress is putting pressure on wealthy, elite universities to spend more of their massive endowments. Last week, Yale said it was increasing the amount it spends from its endowment next school year by 37%, to $1.15 billion, for initiatives, including financial aid. Yale's $22.5 billion endowment is the second largest in higher education after Harvard's, with $35 billion.
Yesterday, Yale said its financial aid budget will increase $24 million, to more than $80 million. The increase -- the largest in the school's history represents only about one-tenth of one percent of the school's endowment.
Yale's move comes a month after Harvard University said it will require undergraduates whose families make up to $180,000 a year to pay 10% or less of their income for tuition and other expenses. Harvard said its move will cost $22 million, bringing its financial aid spending to $120 million annually. Last week, Mr. Levin said Harvard's move influenced Yale's timing.
Charles Grassley of Iowa, the senior Republican on the Senate Finance Committee, has been pushing to require schools to spend a minimum amount of their endowments each year. Foundations are required to spend 5%. Yale, like some other elite colleges, has been spending less than 4%. Mr. Grassley praised Yale and Harvard and called for the more than 60 other colleges with endowments of at least $1 billion to follow suit. "Parents and students have a right to expect these universities with big endowments to end the hoarding and start the helping with skyrocketing tuition costs," he said.
