Harvard’s New Financial Aid Plan: How Will It Affect African Americans?

This week Harvard University unveiled an extensive new financial aid program aimed at attracting students from upper-middle-class families. Under the new plan, students from families with annual incomes up to $180,000 will be asked to pay a maximum of 10 percent of the family income for tuition and other fees at Harvard. For these students, the university will provide scholarship grants to make up the rest of the nearly $50,000 annual cost of attending Harvard.

In a further benefit to upper-income families, the value of a family’s primary residence will not be considered in assessing the family’s assets or wealth.

Harvard describes this initiative as a middle-class program, but some may see it as an aid to students from distinctly upper-class and affluent families. Under the new eligibility rules, families with incomes of as much as $180,000 are eligible to receive significant financial aid of $30,000 or more. Already, without benefit of this new program, Harvard students from affluent families are receiving generous financial aid. According to a recent address by William Fitzsimmons, dean of admissions and financial aid at Harvard, more than 350 undergraduates at Harvard this year whose family income is above $160,000 received financial aid. Dean Fitzsimmons added that the average “need-based” financial aid award for students from families with incomes between $100,000 and $140,000 is $21,693.

An important question is, what is the effect of the new plan on African Americans? It is clear the plan will draw more affluent blacks to Harvard. Consider, as an example, a high-achieving black student from a Detroit suburb whose family income is $150,000 or more. In the past, this student may have shied away from applying to Harvard because of the high cost and the unavailability of financial aid for a student from a family with this level of income. In many cases, Harvard would have lost this type of student to the University of Michigan, where in-state tuition costs are a fraction of Harvard’s comprehensive fees. Now the same student may apply to Harvard knowing that if accepted, he or she will not have to pay any more than they would to attend the University of Michigan.

Under this new financial aid initiative, we gauge that Harvard hopes to attract upper-income black students whom they have been losing to high-quality flagship institutions such as the University of Virginia, the University of North Carolina at Chapel Hill, the University of Michigan, and the University of California.

Harvard currently spends $98 million annually on financial aid. The new program is expected to add $22 million to Harvard’s financial aid budget. But do not be concerned about Harvard’s finances. The new and enlarged $120 million student financial aid budget is equivalent to what Harvard earns on its $35 billion endowment every two weeks!