Schools try radical ways to help students pay for college

High prices put off many students

With or without a tuition cut, deciding on a fair tuition price without alienating students and their families is often a difficult task.

"I think there is a certain amount of skepticism about a university that costs about $45,000 as even being a remote possibility, so [prospective students] never even get to the point of reading about the financial aid program," says Sally Donahue, director of financial aid at Harvard College in Cambridge, Mass.

Despite whopping tuition bills, "colleges and universities are not profiteering at the expense of students and their families," says Ms. Corrigan at the American Council of Education. In fact, universities subsidize a portion of every student's education. Full tuition at most universities represents only two-thirds the cost of educating a student. Income from the universities' endowments covers the rest, explains Corrigan.

Harvard hasn't cut its tuition. But given its $30 billion endowment, virtually all undergraduate students who are accepted receive the aid they need. Harvard anticipates awarding $103 million in need-based grants for the 2007-08 academic year.

"I don't know of anyone ... who ever mentioned debt, coming out of Harvard," says Bryce Caswell, a senior at Harvard who pays nothing to attend the school. Among the graduating class of 2006, the median education debt was $6,850.

The challenge is communicating this to prospective students.

Instead of potentially distancing potential applicants with complicated financial aid jargon, Harvard decided to "come right out with a very clear, simple statement," says Mrs. Donahue. So the school designed a program stating that students from families with an annual household income below $60,000 pay nothing to attend Harvard.

But simplifying aid, Harvard-style, or discounting tuition across the board is not a formula every school can follow.

"Could other institutions do it? Yes. Could all institutions do it? I'm not sure that I could say that," says Corrigan.

For example, a hearty endowment played a big role in helping USD drop costs for out-of-state students. "USD has an unbelievable foundation that will provide economic and scholarship opportunities for all students," says USD's Foster.

Still, a small group of colleges has begun offering improved aid programs that benefit a large socioeconomic cross section of students.

Another approach: capping student loans

Looking to curb student debts after graduation, several universities have capped student loans. The University of Richmond in Virginia created a program that ensures students won't have to take out more than $4,000 a year in need-based loans. Princeton University no longer includes loans as part of their initial student aid packages (however, students can request them for expenditures beyond the standard student budget).

Even the nation's most expensive college, George Washington University in Washington, D.C. – tuition alone for 2007-2008 is $39,210 – has tried to help students by guaranteeing fixed tuition and aid packages for a student's four years at the university.

Administrators hope that stabilized fees will help students and their families better plan for the cost of college.

Daniel Small, director of student financial assistance at GWU, also reminds students that despite the high cost of tuition, the average student's aid package is $19,000.

"Make sure that you're looking at a variety of schools," says Mr. Small. "And wait until you hear about us from the point of view of financial aid to see if that makes it possible."

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