"Ivy League Moves to Provide More Student Aid"

LIANE HANSEN, host:

If you listened closely this past week, you could hear the sound of cheering from parents and students at Yale University. The school announced it would slash the cost of attending for low-income students and, most notably, for many middle-income families.

Yale is the latest Ivy League school to make tuition more affordable. But as NPR's Larry Abramson reports, these dramatic cuts by elite schools probably won't have much of a ripple effect.

LARRY ABRAMSON: In December, it was Harvard announcing that families earning less than 60K a year will get a free ride. And other top schools have pledged to give students grants instead of loans. Now, Yale says parents earning as much as $200,000 a year will get some financial aid, and students should no longer have to borrow money to attend. Good news, no doubt, for parents contemplating the cost of an Ivy League education. But let's put this in perspective.

Mr. ROBERT SHIREMAN (Executive Director, Project on Student Debt): Schools that are offering these no-loan pledges represents less than 1 percent of the students who enter higher education as freshmen every year.

ABRAMSON: Robert Shireman of the Project on Student Debt says Yale is one of the few schools that can afford to take this step because it has a humungous endowment - a towering $22 billion. Only Harvard tops that.

David Warren of the National Association of Independent Colleges and Universities says when he looks down the list of his members, Harvard, Yale and a few other giants stand alone.

Mr. DAVID WARREN (President, National Association of Independent Colleges and Universities): After that, there are approximately 1,575 institutions that do not have endowments of any significant size. They're simply not competing for the same students.

ABRAMSON: Take for example Washington University in St. Louis. It has, by comparison, a measly $5.6 billion endowment. Officials at this well-regarded school say they don't plan any big announcements about boosting financial aid for middle class students. The university's Nanette Tarbuni says Washington evaluates each family's need individually because the bright line limit set by Harvard and Yale may not tell the whole story.

Ms. NANETTE TARBOUNI (Director of Admissions, Washington University): I mean, I think about living here in St. Louis and you might make $60,000 and live somewhat comfortably. But that same $60,000 isn't going to cover things in New York City.

ABRAMSON: Some analysts say private schools like Washington University will continue to compete on the basis of reputation, not on price. So what about public universities? Lots of kids considering Harvard may also be looking at Ohio State or Berkeley. Will the big publics have to ante up to compete?

Peter McPherson was president of Michigan State until 2004. And he says college is a seller's market.

Mr. PETER McPHERSON (President, National Association of State Universities and Land-Grant Colleges): Because there's so many exceptional students in this country. The average GPA during the time I was president of Michigan State went from about 3.2 to almost to 3.6. I mean, there's just lots of excellent students.

ABRAMSON: McPherson is now president of the National Association of State Universities and Land-Grant Colleges. He says that while the Ivy League is boosting student aid, his members must deal first with cuts in state funding. Some tuition watchers are hoping that public schools do not rush to increase aid to the middle class because that could take money away from funds available for low-income students. They are the ones most likely not to go to school at all if the price climbs.

Sandy Baum teaches economics at Skidmore College in New York State.

Professor SANDY BAUM (Economics, Skidmore College): So if the other institutions could just acknowledge that students who get into Harvard or Yale are going to go and that they should focus on educating the rest of the world, then, I think, we'll be better off socially.

ABRAMSON: Baum and others say more aid from the big schools does show the power of growing concern over the cost of attending college. But they say the vast majority of students is more likely to get a break from other changes, like federal legislation passed last year which cuts the cost of student borrowing and raises aid for students who need it most.

Larry Abramson, NPR News, Washington.