Time to quit your job. defer and shelter unearned income

Harvard Ups Financial Aid

Harvard eliminates financial contribution for families earning under
$60,000

Published On Monday, April 03, 2006 2:05 AM

By DANIEL J. T. SCHUKER

Crimson Staff Writer

--------------------------------------------------------------------------------

Families earning less than $60,000 a year will no longer be expected to
pay for their children to attend Harvard, school officials announced
this past Thursday.

The newly expanded financial aid program, which will also reduce the
contributions of families with annual incomes between $60,000 and
$80,000, is expected to cover more than 1,500 students-nearly a
quarter of the College-in the next academic year, Dean of Admissions
and Financial Aid William R. Fitzsimmons '67 and Director of
Financial Aid Sally C. Donahue said in a joint interview Thursday
evening.

With the announcement, Harvard jumps to the head of a pack of top
universities that are expanding financial aid for undergraduates from
low-income and middle-class families.

In 2004, University officials unveiled the Harvard Financial Aid
Initiative (HFAI) and pledged that families earning less than $40,000 a
year would no longer have to contribute to the cost of their
children's tuition, room, and board. In addition, parents with annual
incomes between $40,000 and $60,000 would see substantial cuts in their
contributions to tuition. But undergraduates still had to foot a
fraction of their tuition costs through paid work or student loans.

The school's policy on student contributions is now set to change.

Under Harvard's old guidelines, students on financial aid had to
fulfill a "self-help" obligation-"the amount of money that the
financial aid office believes you should be able to contribute during
the term," according to an HFAI guidebook. That typically amounted to
$3,650 and could be covered through paid work or student loans,
according to a fact sheet from the Financial Aid Office.

The old guidelines also required students to make another contribution
that was "expected to be earned during the summer," according to
the HFAI guidebook. Under the old guidelines, outside scholarships
could serve to offset the self-help expectation but could not be used
to replace summer income.

The plan unveiled yesterday will allow students to use outside
scholarships "to eliminate their summer savings obligations,"
according to a statement from the University.

The self-help expectation rises by $100, to $3,750, under the new
guidelines, and the summer-savings obligation now stands at $1,500 for
freshmen and averages around $2,100 for upperclassmen, Fitzsimmons and
Donahue said. They noted that while the two requirements increased
slightly, both were roughly in line with inflation over the past two
years.

Yesterday's move could allow some low-income students with large
scholarships to completely pay their tuition obligations without taking
term-time or summer jobs.

A LEAGUE OF ITS OWN

Since the launch of HFAI in 2004, several selective schools in the Ivy
League and beyond have made moves to one-up Harvard's financial aid
pledge. Yale announced last March that families earning under $45,000
would no longer have to contribute to their children's tuition and
fees. This month, Stanford matched Yale's offer for families earning
less than $45,000. And just last week, the University of Pennsylvania
announced that families earning less than $50,000 would no longer have
to take out loans to send their children to the school. The University
of Pennsylvania's initiative eases loan burdens on students, but does
not eliminate parents' financial contributions entirely, as
Harvard's, Yale's, and Stanford's programs all do.

Fitzsimmons said yesterday that recent financial aid initiatives at
other schools did not play a role in Harvard's decision to expand its
program.

"The Yale and the Stanford announcements really had no effect on
us," he said. "We had always talked before, when we announced the
original parameters in 2004, about building with inflation."

"We really felt that there was no better to way to reflect the great
success of the HFAI program, to make certain that we could build
success on success," he added, noting that "it would be a huge loss
for America if places like Harvard don't do their share in educating
these students."