College Tuition Price War

88.jpgA few weeks ago, we wondered why Harvard’s competitors weren’t matching its price cut for middle and upper middle-class students. Now, Yale has responded to its Ivy League competitor with some financial-aid news of its own.

Less than a month after Harvard upped the ante by eliminating loans from its financial-aid programs and created a formula that would lower tuition payments for low and middle-income students, Yale announced that it too will use its endowment to fund more financial aid.

Yale hasn’t disclosed its formula yet so we don’t know whether the increased funding will go towards more grant money or eliminating loans or both. The university did, however, announce that it plans to increase the funds towards financial-aid and other university programs by 37% to $1.15 billion in the 2008-2009 academic year.

Schools like Emory, Williams, Princeton, and Davidson have already instituted major changes to their financial-aid programs. Why? Well, it certainly hasn’t hurt that some lawmakers are pressuring them to spend more of their endowments – and thus finally doing something about the fact that tuition has been rising faster than the rate of inflation. Which of course has nothing to do with the fact that it’s election season or anything.

Ultimately this is a price war just like any other in any industry. In this case, schools are trying to outbid each other to get prospective students to choose it over others. We can’t wait to see who the next lowest bidder will be.

read more | digg story

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