Harvard to Help Parents Afford High Cost of College

In my last year of high school, way back in 1982, I was accepted to my three colleges of choice: Indiana University, University of Missouri and Northwestern University.

Here’s why I chose Indiana: I liked the way the journalism program was configured, it was not in Chicago, and it allowed double majors. Oh, and Indiana University was way cheaper than Northwestern.

I don’t remember the exact price, but I think Northwestern quoted something like $12,000 a year. (My memory may be faulty on this.) The price tag for tuition alone would exceed $60,000 for the mandatory five-year program.

As a resident of the lower middle class at that time, numbers like that scared the bejeebers out of me. And I lacked confidence and understanding of how the financial aid system worked.

As it turned out, I graduated Indiana University with $300 of credit card debt. A friend who went to Northwestern continued making payments into his late 30s.

Twenty-five years later, Harvard University is acknowledging that even the upper middle class is struggling to afford an elite education, reports The New York Times. That’s why the University, which has a $35 billion endowment, plans to increase aid to middle-class and upper-middle-class students.

Many students will see up to a 50 percent reduction in tuition costs, the university says. Families that make $120,000 to $180,000 would generally be charged 10 percent of their income per year.

Translation: Parents would pay $12,000 to $18,000 a year instead of more than $45,000.

Harvard is joining other higher education institutions considering taking such actions. Amherst, Yale, Columbia, Williams and the University of Pennsylvania have already taken such action.

“We’ve all been aware of increasing pressures on the middle class,” Harvard’s president, Drew Gilpin Faust, tells the Times. “We hear about this in a number of ways — housing costs, both parents working, the difficulty of amassing any kinds of savings, just the increasing pressures as middle class lives have become more stressed.”

Harvard and other top-tier universities already have increased aid for students with less resources. Families who make less than $60,000 do not need to make any contributions to Harvard, for example.

And unlike my college days, state universities are becoming increasingly less affordable. If I went to Indiana University today, it would cost $22,316 a year without financial aid, according to the university. That’s $89,264 for four years and far more than Harvard under its new program.

In-state students fair better, only having to pay $7,837 a year, or $31,348 for four years.

I can only hope that more colleges are able to adopt additional aid by the time my kids get to college. Our small fund may not be sufficient by the time they get there.

Comments

[Summer]

I have to tell you, I wish this had happened ten years ago when I was looking at colleges. I too go accepted to my choice colleges : Lebanon Valley College of PA, Albright, and Harvard.

I chose LVC because it was the cheapest after aid. $12k a year.

Not to say that Harvard didn't offer a generous package - however at 33k plus tuition, even aid couldn't save my pocketbook and I went where I could maybe, one day, afford to pay off the loans.

But I will never forget the day when my parents looked at the tuition costs of good ol' H and one said to the other, "that's more then half our annual income per year honey."

I'm going back to finish my undergrad here in the city - and in state prices boggle my mind. in PA it was 12K a year, and down here it's 8k at the well respected University of North Carolina. And I about died of disbelief when I found out what the community college tuition costs were, they're that low ($46/credit).

[brettdl]

Yeah, I think there are a lot of us out there who are risk-averse and don't like huge levels of debt for a college education.

The thing for me was: I was studying to be a journalist and didn't think salaries would be high enough to justify the more expensive education. That probably holds true.

[chip]

well Harvard has one of the largest endowments in the country, and in general, it's the top tier colleges that are the richest. Maybe they should be forced to kick a percentage of their endowments into a larger pool so that everyone gets a shot at cheaper tuition.

[brettdl]

Oooh, I like that idea.

[Philip]

There's talk of legislature that will require the top universities to spend more of their (incredibly large) endowments on keeping tuition costs down.

We shall see.