The changes in competitive context… Since Princeton eliminated loans from its aid program in early 2001, and the Harvard Financial Aid Initiative (HFAI) debuted in 2004 (making the cost of attendance zero for students whose family income was $40,000 or less), peer institutions have engaged in heightened competition to make their need-blind aid packages both more generous—covering more families—and easier to understand. The College upped the income threshold to $60,000 in 2006 (and eliminated loans in 2007), and then again to $85,000 in 2023.
In recent years, other institutions have seized the financial-aid initiative from Harvard, in two ways.
First, of course, is the money: As reported in March 2024, when the College announced admissions data on the class of 2028 , both Princeton (which is fully endowed for financial aid, unlike the FAS) and Stanford had raised their income threshold for free attendance to $100,000 for the class of 2027. Upping the ante, on March 25, 2024, Dartmouth announced that a $150-million bequest would enable it to nearly double its free-attendance threshold from $65,000 of family income to $125,000—the highest in the country—effective with that fall. More limited programs at Duke and the University of Virginia made attendance tuition-free for students from local families with incomes under $150,000 (North and South Carolina) or $100,000 (Virginia), respectively, presenting still more competition. And most recently, MIT announced last November that beginning this autumn, undergraduates from families with incomes below $100,000 would attend free of charge (an increase from a $75,000 threshold), and those with family incomes below $200,000 would attend tuition-free (up from $140,000). The University of Pennsylvania will match the MIT tuition-free threshold (while retaining a $75,000 family income standard for zero-cost attendance).
Second, to overcome families’ sticker shock at posted $80,000-plus term bills (a strong deterrent to applying), the way in which aid is described is shifting. A major HFAI emphasis was demystifying aid, so applicants from lower-income families could readily determine their prospective college costs—or be assured that they would incur none. As described by the Harvard Financial Aid Office’s “How Aid Works” webpage (at least before today’s announcement), above the $85,000 family income threshold for free attendance during 2024-2025, “Families with annual incomes between $85,000 and $150,000 will contribute between 0 and 10 percent of their income. Those with incomes above $150,000 will be asked to pay proportionately more than 10 percent based on their circumstances.”
According to the March 2024 University news release on class of 2028 admissions , “Nearly one-quarter of students attend Harvard with no parent contribution”—meaning their family incomes then were $85,000 or below. That suggests that across the other 30 percent of the undergraduates receiving aid, the average family cost would have been somewhat less than twice the $15,700: from a minimal amount (a percent or so of family income for those with income in excess of $85,000) to more than the average (more than 10 percent of family income for those with income in excess of $150,000), per the stepped percentage-of-income formula.
As a practical matter, for most students, the level of aid granted under the new tiers unveiled today may not differ that significantly from the prior level of aid (including that granted under the stepped-up contribution for those with family incomes above $150,000). This year’s term bill is $82,866 (including the $56,550 tuition component); assuming the 2025-2026 bill again increases about 4 percent, to about $86,000 (and tuition to about $58,800), families with incomes of $200,000 or less will be looking at an additional aid amount (“free tuition plus”) to cover some portion of $27,200 of room, board, and fees.