Echoing the enhancement in financial aid implemented in the fall of 1998, the College has increased its undergraduate aid budget by $8.3 million annually, effective this fall. As a result, all scholarship recipients will receive an additional $2,000 in need-based grants, reducing their "self help"--funds contributed through work or borrowing--by 40 percent, from $5,150 to $3,150 per year. With this new allocation, scholarship funding from the College will total $63 million for the 2001-2002 academic year, double the $31.5 million disbursed in 1991-1992.
Like the comparable 1998 program, under which the Faculty of Arts and Sciences (FAS) budgeted $9 million more in annual grants, the new boost in aid leaves it up to students whether to reduce the number of hours they must work--freeing them to pursue their studies or extracurricular activities--or to lessen their burden of student loans, or some combination of the two. (The 1998 initiative also allowed undergraduates to use the full amount of any outside scholarship awards they received to reduce their self-help obligation.)
Announcing the increased aid budget February 21, FAS dean Jeremy R. Knowles said, "While we believe that our undergraduates should share in the investment of their education, including the use of low-interest loans, the new financial aid program ensures that--no matter what their resources--all our students can embrace and enjoy the possibilities here, without carrying a significant burden of term-time work, or of debt after graduation." In his recent "Report on Harvard College, 1995-2000," Dean Harry R. Lewis singled out the value to students of the flexibility in the 1998 plan, which he said "put maximum freedom of choice into their hands."
The increased scholarship awards followed by a few weeks Princeton's decision to replace undergraduate loans with grants. But Harvard officials said work on the new program for College students had been under way for some time, reflecting an increase in funds distributed from the endowment.
At the same time, costs may be mounting anew. The College announced, also on February 21, that the 2001-2002 undergraduate term bill--tuition, room and board, and fees--will rise 3.5 percent, or $1,159, to $34,269 (up 55 percent from $22,080 a decade ago). That rate of increase represents only a slight change from the 2.9 percent rise imposed for the 2000-2001 academic year, the lowest in percentage terms since 1968. But, perhaps significantly, it breaks a pattern established nine years ago, when annual percentage increases in the term bill began to abate, falling from 6.9 percent then to the 2.9 percent rise last year.
Dean Knowles subsequently explained the reversal of the trend as reflecting the prevailing rate of inflation. "Over the past years," he noted, "we have been driving down the annual rate of rise in tuition and fees, towards the Consumer Price Index, and have recently reached the range of inflation"--despite the fact that a college's costs, driven largely by salaries and benefits, differ from general purchases of goods and services. Investments in information technology and the cost of library materials have also been cited in the past to explain why higher-education prices rise more rapidly than consumer prices overall.
During the past year, Knowles continued, the rate of inflation accelerated to 3.7 percent. In University terms, that means salaries, health benefits, and other expenses (including financial aid) that are met in part from tuition are rising at a more rapid clip. He also said that median family income has grown faster than inflation during the past decade, making college education more affordable.
Putting those factors together, it seems reasonable to assume that the sticker price for a year at Harvard may have begun increasing faster, too.
Housing Adjustment
FAS will augment living stipends for graduate students well beyond the usual annual adjustments. The academic-year stipend will rise from $15,000 to $16,200, and the summer stipend from $2,500 to $3,000. Peter T. Ellison, dean of the Graduate School of Arts and Sciences, points to the need to "recognize the dramatic increase in costs of living" in and around Cambridge, particularly housing costs. Combined with support for students enrolled in the new doctoral program in Afro-American studies, the increased spending on graduate financial aid totals as much as $3 million annually.
