Nearly 30 percent of MIT undergraduates will not pay tuition next academic year under a far-reaching financial aid initiative announced yesterday, the latest in a host of expanded need-based programs at elite colleges and universities.
The new policy, approved by the MIT board of trustees, waives tuition and replaces loans with grants to cover expenses outside tuition for students whose families earn less than $75,000 a year.
"Those students graduate debt-free," said Kirk Kolenbrander, vice president for institute affairs at Massachusetts Institute of Technology.
In addition, MIT will no longer consider home equity in calculating assets for families earning less than $100,000, which will reduce the average family payment by $1,600. MIT will provide a comparable deduction to parents who rent their home.
Financial aid recipients will also have to work fewer hours at work-study jobs as part of their assistance packages. To fund the initiative, MIT will increase its financial aid budget by more than $7 million, to $74 million, one of the highest per-student budgets in the country.
About 60 percent of MIT students receive assistance from the university, reducing the average net tuition to about $8,100. That amount "approximates the in-state cost of many public universities," said Daniel Hastings, dean for undergraduate education.
Tuition and fees for the upcoming academic year will increase 4 percent to $36,390. MIT, located in Cambridge, has just over 4,000 undergraduates.
"In a pattern MIT has followed for many years, we are increasing funds available for financial aid this year at a far greater rate than the rise in tuition," Hastings said.
The sweetened aid package comes after many of MIT's chief competitors, including Harvard and Yale, announced sweeping aid initiatives in recent months that reduced costs for middle-class and even wealthier families.
Kolenbrander downplayed competitive considerations, saying the initiative's primary goal is ensuring that talented students can attend MIT, no matter what their families' financial situation.
"This is part of a long-standing commitment to financial aid," he said. "We're trying to do the right thing for our students, and the very best students come from all economic classes."
MIT admits students without regard to their ability to pay and bases all its financial aid decisions on economic need.
Overall, 17 percent of MIT undergraduates come from families earning less than $45,000 a year, and 22 percent come from families earning less than $60,000. The median household income in the United States is $48,200.
Facing intense public pressure to curb rising tuition costs and make college more affordable, many of the top schools in the country have unveiled generous aid packages in recent months, sometimes eliminating tuition for lower-income families altogether.
In December, Harvard eliminated loans and sharply reduced contributions for parents with an income well up the economic ladder, prompting other top-tier colleges to follow suit. Families earning less than $60,000 per year do not have to pay tuition at Harvard.
In January, Yale University said it would cut its average cost for students with financial need by more than half and eliminate tuition for families earning less than $60,000 per year. Dartmouth eliminated tuition for families who earn less than $75,000.
Last month, Stanford University announced it would waive tuition for students whose families earn less than $100,000 a year and eliminate room and board fees for students whose families earn less than $60,000 a year.
Wealthier colleges are also under pressure from Congress to restrain cost increases and spend more of their soaring endowments to open their doors to less-affluent students.
At roughly $10 billion, MIT's endowment ranks sixth among the nation's colleges.
Responding to a request from the Senate Finance Committee for tuition and endowment information, Susan Hockfield, MIT president, replied that MIT had more than doubled need-based grants and had cut median debt in half over the past decade.
Peter Schworm can be reached at email@example.com.