Why Elite Colleges Have Sweetened Their Student-Aid Packages ...

Selective colleges are undergoing intense scrutiny these days when it comes to student aid. The decisions of the University of Pennsylvania, Harvard University, and other private institutions to expand our aid packages for students from less-affluent families have drawn both high praise and heavy fire: high praise for making ourselves more affordable to students from all economic backgrounds, and heavy fire for using aid to compete unfairly for middle-income students at the expense of more needy students and for widening the gap between the "have" and "have not" institutions.

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Far from neglecting the neediest students, we began our push to improve student aid at Penn two years ago by substituting grants for loans for low-income students. Starting this fall, a student from a typical family earning $40,000 will pay no tuition, room, or board to attend Penn; a student from a typical family earning $90,000 will pay no tuition. Having made Penn so affordable to the neediest students, we then will substitute grants for loans for all students from families with financial need, beginning in the fall of 2009. For the first time, all students with demonstrated financial needs will graduate from Penn debt-free.

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Declining government support has contributed significantly to the decreasing affordability of public higher education for less-affluent students, along with the growing disparity in affordability between the most selective private and public universities. Many well-qualified students from middle- and low-income families who are not admitted to places like Penn are being inordinately squeezed, graduating with great debt and limited career choices. Worse, many others find themselves priced out of college altogether.

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