Schools Start Offering Better Terms to Help Middle-Income Families

Traditionally, Ivy League schools have shied away from the “let’s make a deal” approach in arranging financial aid.

But Princeton is offering some new terms that may up the ante as the nation’s elite private colleges compete for low- and middle-income students. When awarding financial aid packages for next fall, Princeton officials will eliminate loans for students from families earning less than $40,000 a year, replacing them with outright grants. And in calculating ability to pay tuition, Princeton will no longer tally the equity in the home of a family with income below $90,000.

That means that scholarships, which now average nearly $15,000, could increase by $3,000 to $4,000 for many students--enticement not lose on other elite schools where tuition, room and board run about $30,000.

“What Princeton’s done is very bold,” said Dartmouth President James O. Freedman, predicting that the new financial aid formula “may very well shake up the Ivy schools.”

Indeed, Yale quickly announced that it will exempt $150,000 of home equity, savings or other assets from the formula that determines how much parents should pay. And outside the Ivy League last week, Stanford said it will no longer count “outside” scholarships against the amount it provides and will revise how it calculates home equity--capping th value of the property at three times the household income.

So who’s next?