Colleges help to tame tuition

Ivy League more relaxed on income levels
Davidson's funds pale in comparison to the Ivy League schools and big public universities that pay for similar efforts from endowments worth billions.

In 2001, Princeton was the first to announce it would replace all student loans with grants and not ask low-income families to contribute funds for undergraduate education. Other Ivies like Harvard, Yale and Columbia soon said they would do the same. Harvard does not ask families with incomes under $60,000 to contribute anything, and it also reduced the expected contribution amount for families making $60,000 to $80,000.

More schools are also giving homeowners a break. A consortium of 28 top private colleges that call themselves the 568 Presidents' Group (after the federal antitrust exception allowing them to set joint aid rules) will start using a more generous financial-aid calculation this year that aims to reduce contributions for families whose homes have appreciated. Previously, this group, which includes schools like Duke, Dartmouth and the University of Pennsylvania, counted the market value of a house, up to 2.4 times a family's income, as an available asset, regardless of how large the mortgage was. Now they will count only home equity, which is market value minus mortgage debt, and cap that at 1.2 times income.

On the West Coast, Stanford said earlier this year that it would tighten the cap on annual undergrad student loans, from $3,500 to $2,000. It also will reduce the expected contribution from families making between $60,000 and $135,000 by capping the amount of home equity assessed to 1.5 times the family income, saving an average of $2,000 a year. Stanford said it would make an allowance for renters with no home equity so that their other assets aren't disproportionately weighted.

Public schools pump up efforts
It wasn't until 2003 that public schools took similar action. The first to take that step was the University of North Carolina at Chapel Hill when it announced the " Carolina Covenant," eliminating loans for students whose families made 150 percent of the federal poverty level, then $28,000 for a family of four. The program has now expanded to those earning 200 percent of the poverty level. UNC Chapel Hill had 949 Covenant scholars, last year, about 8 percent of the total undergraduate population, and will be adding another 450 this fall. Other public powerhouse schools are making similar efforts: the University of Virginia has Access UVa, and the University of Texas at Austin has the Longhorn Opportunity Scholarship.

Some schools are increasing income-level eligibility. Emory University in Atlanta is replacing loans with grants for families earning $50,000 or less. For income ranges between $50,000 and $100,000, Emory will cap the total amount of need-based loans a student must take at $15,000 over their college career.


Others are locking in tuition rates. Big schools, such as George Washington University in Washington, D.C., to regional schools, such as Hiram College in Central Ohio, let each incoming class lock in the tuition they pay as freshmen until they graduate, typically up to four or five years. Freed-Hardeman University in Henderson, Tenn., recently said it would freeze tuition and fees at the current year's levels for new and returning students.

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