Yale joins expanding group of elite colleges in boosting aid
The Ivy League school announced what it called the largest increase in financial aid spending in its history, boosting contributions from its endowment by more than $24 million to more than $80 million annually.
The move will reduce the average cost by more than half for families with financial need, Yale officials said.
About 43 percent of Yale's 5,300 undergraduates qualify for financial aid, said spokesman Tom Conroy. Yale's tuition with room and board is about $45,000 a year.
"Yale should be a college of choice for the very best and brightest students from across America and around the world, regardless of financial circumstances," Yale President Richard Levin said in a statement. "We want all of our students to make the most of Yale -- academically and beyond -- without worrying about excessive work hours or debt. Our new financial aid package makes this aspiration a reality."
The changes go into effect in the fall.
In making the announcement Yale joins a group of elite schools -- including rival Harvard -- in boosting financial aid.
Harvard announced last month that it will provide $20 million more in financial aid. Harvard's tuition, room and board are $45,600 a year.
Duke earlier announced a plan to spend an extra $13 million on aid by capping loans and eliminating any required parental contribution from families earning under $60,000.
The University of Pennsylvania, Pomona, Swarthmore and Haverford all announced they would eliminate loans, more than doubling the small number of schools promising all students a debt-free graduation.
Yale, which has the second biggest endowment in the nation, also announced that it would keep the increase in its tuition, room and board charges in 2008-2009 to the expected level of consumer price inflation of 2.2 percent.
Yale said it is increasing the number of families who qualify for aid, eliminating the need for students to take loans, enhancing its grants to families with more than one child attending college, exempting the first $200,000 of family assets from the assessment of need and increasing expense allowances for foreign students.
Families with incomes less than $120,000 will see their contributions cut by more than 50 percent, while most families with incomes between $120,000 and $200,000 will see cost reductions of 33 percent or more, Yale officials said. Families earning less than $60,000 will not make any contribution, while those earning between $60,000 and $120,000 will typically contribute 1 to 10 percent of family income and families earning more than $120,000 will contribute an average of 10 percent of income.
For example, Yale said, a family with income of $90,000 would contribute $2,950 per year under the new policy, down from $12,550 under the old policy. A family making $180,000 would contribute about $23,000, down from $38,000.
Student contributions would also decline from $4,400 under the old policy to $2,500 under the new policy.
Yale officials announced last week that the school will spend more money from its $22.5 billion endowment in the 2008-2009 academic year on financial aid and scientific research. The university intends to increase the annual endowment payout for such programs by 37 percent to $1.15 billion, Levin said.
Yale's endowment is topped only by Harvard's, which stands at about $34.9 billion.
Iowa Sen. Charles Grassley, the ranking Republican on the Senate Finance Committee who has criticized the wealthiest schools for their prices, said he hopes Yale's move leads other colleges to boost student aid.
"Harvard and Yale both have made big announcements in the last few weeks," Grassley said in a statement. "Meanwhile, more than 60 other colleges and universities with endowments of at least $1 billion are making church mice sound loud by comparison. 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."
But The Institute for College Access and Success, an independent nonprofit group, cautioned that the plans by Yale and Harvard to increase financial aid to a wider range of incomes could lead other colleges to shift limited financial aid money from lower-income families toward higher-income families in order to compete for top students.
"We expect more institutions -- and not just Ivy League schools -- to announce plans to eliminate loans and reduce costs for low- and middle-income families in the coming weeks and months," the group said in a statement. "We encourage colleges to fully fund the neediest students before extending financial aid packages up the income scale."
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