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On Monday, December 10, Harvard University unveiled a major financial aid plan designed to reduce tuition bills by thousands of dollars — for all students.

The University is planning to replace all loans with grants, and is prepared to spend more money (up to $22 million more) annually on aid. They will mostly target middle – and upper-middle class students. As it is, families earning under $60,000 currently pay nothing to attend the university.

Harvard is planning to take home equity out of its wealth calculation when determining financial aid. This should provide a greater boost for students and parents. A typical family earning $120,000 would pay about $12,000 next year, down from $19,000 under current award policies. For a typical family earning $180,000, the bill would drop to $18,000, from more than $30,000.

Approximately half of Harvard students receive some form of aid, including students from about 100 families who earn more than $200,000. For those who pay full tuition, room and board, the price is $45,620.

The announcement is the latest of a string by ivy league universities that are trying to combat perceptions they are unaffordable by offering major initiatives to reduce the price students actually pay. Princeton began it’s changes in 2001 when they eliminated all student loans and offered students more grants and jobs.

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