Harvard Shares the Wealth
Posted on December 10th, 2007 in Uncategorized | 27 Comments »
Drew Faust and FAS dean Michael Smith announced a substantial expansion of Harvard financial aid policies today, designed to lighten the burden of a Harvard education for middle-income families.
The new formula creates a sliding scale of payment by income level for families making less than $180,000.
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 policies will also eliminate loans as a source of aid and eliminate the consideration of home equity in determining a family’s ability to pay for college.
âWe want all students who might dream of a Harvard education to know that it is a realistic and affordable option,â said Faust.
The Times approvingly writes up the announcement.
The initiative appears to make Harvardâs aid to students with household incomes of $120,000 to $180,000 the most generous to be offered by any of the countryâs elite private universities.
But there seems little doubt that part of the reason behind this is outside pressureâwhether it’s a Business Week story on the growing wealth inequity between “Ivy-Plus” universities and state schools, or Congressional consideration of a law to mandate what percentage of a university’s endowment must be spent on financial aid.
(The Globe, which seems to consider its website something to work on after the next day’s paper is printed, has nothing.)
On a quick reading, this seems like an important move for Harvard, whatever the motivation, and terrific press for Drew Faust. Your thoughts?
27 Responses
12/10/2024 7:57 pm
It doesn’t seem especially good press for Harvard. Is the great American reading public going to be impressed by measures that relieve those earning $120-180K? Those figures are what’s going to stick with them.
12/10/2024 8:10 pm
This is brilliant on Drewâs part. She has set a very high standard. And this is probably only the very beginning of what Harvard is going to do with regard to middle middle and upper middle families. The $ 180,000 number will go up and up. No home equity figured in to the equation. Wow.
The really rich schools (Harvard, Princeton, Williams et.al.) are going to get many more of the brilliant middle class students who otherwise would have gone to the state schools (e.g.UNC, Michigan, Oklahoma… where Harvard just decimated their merit scholar program). The “not really rich” rich schools e.g. Columbia, Brown, Penn are going to suffer terribly.
A move that is also so equitable. Simply brilliant.
12/10/2024 8:13 pm
Sam, that may be “brilliant” for Harvard but doesn’t sound so brilliant for American higher education generally.
12/10/2024 8:19 pm
The Globe had this article up by 1:24 PM. Considerably earlier than Shots in the Dark.
12/10/2024 9:06 pm
Anon 7:13.
Why doesn’t it, as you say, “sound so brilliant for American higher education generally.”
The kids are going to go to some college; why not Harvard, if Harvard can provide a good education, additonal resources that they might not have at other schools (e.g. better libraries, labs etc,; not necessarily better teachers) and a price that their parents can afford?
Isn’t that why kids go to one school rather than another? For example, why would most students from Michigan, who had equal grades and equal financial resources, go to The University of Michigan rather than Michigan State, both of which are good schools. Perhaps because one offered a bit more than the other in a number of different ways.
Getting back to Harvard.
I think it is better to spend the endowment (incrementally) on financial aid, than to engage in the arms race to bring in “star professors” for “dream teams.” President Faust should tell the next professor who uses the phrase “dream team” that he or she will lose 50% of their research budget for the next five years. Is Harvard trying to attract professors or professional basketball players?
I’m hopeful that this move is well thought out in terms of future budgetary constraints, for if it is the beginning of another round of huge jumps in endowment payouts, as there were under President Rudenstine, the University will, in the future, pay a heavy price for such foolness.
12/10/2024 9:11 pm
But perhaps because of policies like these, Michigan will lose more kids-more of its best-to Harvard. You suggest it yourself in your first post. It’s a different kind of arms race, collecting kids rather than ‘star’ professors, and if Harvard bags them all, other universities — including all-important state universities like Michigan and mSU — will suffer. (7.13 again)
12/10/2024 9:48 pm
The first comment is fascinating. Harvard is already free for the under $60K families, so its unwillingness to do anything more for them is supposed to be bad press for the university! And anyone making $120K is rich and needs no help, so Harvard is just lining the nests of the nest egg crowd by cutting them a break. It would be funny if it were not so sad. This is precisely like GWB’s complaint that some proposal under Congressional discussion for relief to the middle class was ridiculous because people making $100K or so are (snicker) not poor. What counts as rich, poor, and middle class but barely making it today?
(Rich, if you think they just whipped this together over the last couple of days in response to the Business Week story, you need your head examined.)
12/10/2024 9:54 pm
I wrote the first comment, and wasn’t presenting my own POV so much as how, it seems to me, this move will go down nationally. It will be used by Harvard-bashers who already think Harvard kids (and families) are rich, and now the rich are getting more assistance. I’m not in public relations, but I was considering it (as I thought R-Brad asked) as a PR action. My own interest, personally, would be in helping exactly the people this last poster omits: families earning 60-120K, who don’t seem helped so much.
12/10/2024 10:47 pm
did it ever occur to anyone that harvard simply thought the aid initiative was the right thing to do. is it possible that this harvard administration can have good instincts?
12/10/2024 10:57 pm
The Globe beat me? Mea culpa, then, for faulting it.
Still a terrible website, though.
12/10/2024 10:59 pm
And no, I clearly don’t think that they whipped this up in the past few days. But I do think that outside pressures probably affected the timing of the news…. The Business Week story was pretty bad press for DGF.
Oh, and just for the recordâI don’t think that would be a bad thing. We live in a media world…..
12/10/2024 11:07 pm
To 7:13 Again.
I think what you say is correct in theory and I could easily argue your point for you (i.e. âit is a different kind of arms raceâ).
That being said, here is (perhaps) another way of looking at it.
I donât believe that Harvard is looking at this as collecting kids. Perhaps Iâm wrong about this; I have no insight as to what the thought process was that went into the decision. Another blogger, perhaps Harry Lewis, would have a much better sense of it. Iâm sure the Lewis dinner table was one happy place this evening.
I think Harvard is responding to a real need in that middle class families have been the one group that has been overlooked during the last 15 years, in terms of affordability of an education at costly schools such as Harvard. The wealthy have had no problem and the poorest students (in terms of financial resources) have had few. The great middle has been challenged and until very recently, the aid given to this group, at schools that have no merit scholarships, has lagged far behind the increase in costs. These universities are now playing catch up, after seeing that many private and state universities have stepped up the use of merit scholarships to attract very bright middle class students. Whether it is Dukeâs Merit Scholarship program, Boston Universityâs Trustee Scholarships or The University of Oklahomaâs National Merit Scholars program, at the margin, some students, rightly or wrongly are going to go to these schools (of course, the Ivies, collectively, would never admit that they lose any student they really want⦠but they do). The Ivies give no merit scholarships and have been at a disadvantage.
Therefore, I donât think it is an arms race in the sense that I meant an arms race, although I agree that it might look that way. The arms race that is bothersome to me is the one that allows, among many, many other arms race items, âdream teamsâ to be formed at universities, formed by engaging in the practice of playing a high stakes bidding war for âstar professors.â Iâm all for free markets and there is no reason for these professors not to take the total compensation offered (and a great deal of it is not in the form of salary). I find it hard to understand how universities can rationally justify these practices. On the one hand they profess a dislike for U.S. News and World Reportsâ various rankings (overall for the university, as well as for individual schools and departments), but it seems as though they try damn near anything to increase their rankings in them.
I find it hard to understand why athletic departments and athletes are given as much of the pie as they are, at many state universities. Yes, Michigan and MSU will suffer if the Harvards of the world offer more scholarships to middle class kids. On the other hand, in addition to building very costly sports stadiums and arenas , why hasnât more state money in Michigan (and other states) been used to support higher education. Why is so much money wasted (at the state level) when it could be used to: increase salaries so that the schools could attract and retain more and better professors; have smaller classes; have better labs and libraries; and in general have more and better facilities for those who teach and study there.
12/10/2024 11:32 pm
Brilliant initiative! Let’s now do the same with students in the professional schools so that some of them don’t have to admit everyone who applies.
12/10/2024 11:36 pm
Sam —
My apologies for posting anonymously. You seem worked up about professorial — or maybe just scientific — “dream teams.” Whom do you have in mind? Yes, Harvard is constantly pressured to recruit some dream team or another, or to give a new professorial recruit authority to hire anyone they want. But how many examples do you have of this actually happening? I think the promises have been hollow, and seen as such.
12/10/2024 11:50 pm
which professional schools admit everyone who applies?
12/11/2023 1:26 am
I agree with much of what Sam Spektor has written, but still, I want to wonder what’s wrong with using significant funds to try to attract the best scholars and scientists, and, in some cases, a few in one given subject who will interact to good effect. This is all that the “dream team” terminology boils down to. (I dislike the terminology, since it suggests the wrong analogies, but I think some Departments glommed onto it because they thought it would appeal to the former president, who, in my experience, *did* like such expressions.)
I fail to understand Sam’s conclusion “Iâm all for free markets and there is no reason for these professors not to take the total compensation offered… I find it hard to understand how universities can rationally justify these practices.”
If he believes in free markets, then the worth of the faculty in question is what the universities are willing to pay them. The rhetoric of “dream teams” just seems a red herring, unless Sam can show that it’s the rhetoric that drives the acquisition cases, not the quality of the scholar in question.
But as for the official topic of this thread, I think it’s great that Drew and Mike have recognized the financial aid needs of those with above-median incomes, and also have recognized that home equity values distort the appearance of fiinancial comfort of a typical middle-class family.
12/11/2023 9:58 am
I may be in the minority, but I think this is a big mistake. At a time when FAS has a serious deficit and a serious space crunch, not to mention numerous departments and programs that could use additional funds to improve education and research, why give more money to middle-class Harvard students?
I should point out that, when I attended Harvard, my family earned less than $120,000, and tuition was a difficult but ultimately manageable expense. I don’t doubt that families earning $180,000 could use extra financial aid, but I can think of lots of better ways to spend that money, which would ultimately provide a greater benefit to our society, and very likely improve the education of those very students.
It’s easy to be in favor of cheaper education for everyone, but this program only provides cheaper education for a small minority of students, who attend a school that already has plenty to attract them.
12/11/2023 10:53 am
Interesting numbers in the follow-up article in The Times this morning (wonder if theyâre true?).Only 763 students at the College, whose family income is between 120 and 180 receive some financial aid. Even if you gross the figure up 33% to account for those in that income bracket who donât receive aid, we are talking about 1000 out of 6600 students whose family incomes are from 120-180. How is it, that out of 20000 plus apps a year, only 300 students (assuming an 80% yield) are admitted whose parents earn 120-180? It would appear that the only kids getting in are the legacies, the sons and daughters of star hedge fund managers, owners of private equity firms, and heads of investment banks (not mutually exclusive from the prior category), children of professors and administrators, and the poor. Why havenât these middle class kids been getting in? It really has been a two class system.
Another thought. If Harvard is going after this âmiddleâ, does that mean that need blind is done? How do you identify these kids if you don’t look at their financial circumstances to see if you want to reach for them?
12/11/2023 11:27 am
About sixteen years ago I was fortunate to be admitted to a competitive, out-of-state, public university. I’d done well in high school, putting together a strong academic record that included both extensive participation in extracurriculars and demonstrated academic achievement, strong enough that I was offered a place in the institution’s Honors College and little bit of scholarship money. I was also coming from a single-parent family where the annual income was less than $30,000 a year, qualifying me for a variety of resources (Pell Grants, Stafford Loans, Perkins Loans, etc.) that allowed the University to provide me with a substantial financial aid package. Without it, I wouldn’t have been able to enroll and ultimately receive a degree. However, I emerged close to $40,000 in debt as a result of the loans I took out, and had to put all my savings from summer employment (60 hours per week) to pay off the remaining parental contribution that my mother couldn’t meet.
As of 2004 (I believe), if someone in my position were able to gain admission to Harvard College, he/she would have been told that no financial contribution from my family would be necessary, with the University picking up that cost, financial aid covering the rest.
With yesterday’s announcement, if someone in my position were admitted to Harvard College, not only would there be no parental contribution, but any financial aid in the form of loans would be eliminated, to be replaced by grants.
People in this forum can debate the politics and symbolism of the move until they’re blue in the face, but when you get down to brass tacks, the fact of the matter is that this decision significantly helps both students and their families, and that’s really the barometer than should be used in measuring this new initiative.
12/11/2023 11:35 am
Your story is interesting, 10.27, but yesterday’s news. Harvard took care of people like you (the sub60s, or even earlier, the sub40s), a couple years ago. I think we should focus, as Sam is doing, on just how many students (potential or current) in the 120-180 range, and what do they need. Although I find it odd, but not especially surprising, that a wealthy man like Sam and a presumably affluent one like Warren Goldfarb find 120-180 “middle income.” In this country, it’s far more than that.
12/11/2023 11:42 am
9:53, Harvard’s dean of admissions was on NPR this morning, and he said this move was at least in part linked to a disturbing trend they were noticing of having fewer and fewer applicants from those upper-middle class families. So criticizing this move based on the fact that there are currently relatively few effected students is entirely missing the point. This is meant to raise that number, no?
12/11/2023 11:45 am
Oops, combined the reading of two comments (Sam and another) into one by over-scrolling, my apologies (9:53). My comment is now in response to a criticism that never happened…;)
12/11/2023 11:53 am
Egret,
I think you missed the point. I wasn’t criticizing the move; quite the contrary if you read my posts. I think this is a great thing, for the students (who are the people that count) and the College.
I was just wondering where Harvard has been with regard to the great upper middle; why were so few kids from this income range, choosing to come to Harvard?
In your post, you mentioned that the Dean of Admissions was thinking the same thing.
12/11/2023 1:22 pm
And the question stands. Honestly, I would have thought that the majority of students would come from this income bracket, perhaps slightly expanded.
12/11/2023 9:37 pm
This is basically a ridiculous misdirection of university resources. It will trim what FAS has to preserve valuable programs over the long run from the big science crowd-out. And it ups the ante in U.S. higher education in ways that favor the privileged and reduce opportunity.
12/12/2023 9:19 am
Ahhh, I was waiting for the self-victimizing response from a FAS faculty member; they really do live in their own little world.
12/12/2023 1:03 pm
8:37 PM to 8:19AM: You don’t have to be a weatherman to see which way the wind is blowing, nor do you have to be an FAS faculty member to see that the carving up and diminishment of FAS proceeds apace. Faust/Smith have been put in place to do with a smile and a nod what LHS/Kirby could not accomplish. Crucial to the university’s strategy.