For six years, Princeton University has boasted that the average family making less than $65,000 a year pays nothing for an undergraduate student’s tuition, room and board. Financial aid grants cover the entire bill.
For students who receive no financial aid, the estimated cost of attendance at Princeton this year is $79,540. That counts tuition, meals, housing and miscellaneous expenses. So the value of a full ride, over four years, is well over $300,000.
Such are the benefits — for the select few who can get in — of attending a university with an endowment valued last year at more than $37 billion. Huge recent investment returns on that money are supporting the new aid.
Princeton’s president, Christopher L. Eisgruber, said the initiative is meant to ensure that students “flourish on our campus,” taking full advantage of academic, research and internship opportunities. He said the university will also scrap a policy that students who receive financial aid are expected to contribute $3,500 a year for books and miscellaneous expenses. That is likely to reduce pressure to find well-paid summer jobs or part-time work during the school year.
Princeton’s announcement is likely to reverberate among ultra-selective schools and the students who compete for admission to them. Harvard, Yale and Stanford universities all promote on their websites that families with incomes of up to $75,000 and typical assets will qualify for grants that cover full costs. Yale, for example, calls its program a “zero parent share award.”
In 2001, Princeton eliminated loans from the financial aid packages it offers students. Some other prestigious schools followed that “no-loan” example.
But one financial aid expert said the impact on higher education of Princeton’s latest announcement will be quite limited at a time of rising concern about college costs and intense political debate over student debt cancellation.
“Does it change the world? No,” said Sandy Baum, an economist at the Urban Institute who for many years analyzed financial aid and pricing trends for the College Board. “Will it make life better for the small number of people who are fortunate enough to get into Princeton? Sure. … I’m not really worried about these Princeton students. I’m worried about all the people who don’t go to Princeton.”
With new residence halls, Princeton is growing its undergraduate enrollment from a pre-pandemic level of about 5,200 to about 5,700 by fall 2025. But demand for seats far exceeds supply. Every year the university draws tens of thousands of applicants. Its acceptance rate was 4 percent for the class that entered in fall 2021.
For many years, the university has sought to shed its image as a haven for the elite. About 21 percent of freshmen this fall have enough financial need to qualify for Pell Grants, the university said, up from 10 percent in 2009. Pell Grants target aid to families with low-to-moderate incomes. Princeton’s Pell share is relatively high for its peer group, but it trails the shares found at many public universities.
Eisgruber said he would like to diversify the student body further.
“We have to think about middle-income students as well,” he said. Many who barely miss qualifying for Pell Grants are “underrepresented at colleges and universities like this one,” Eisgruber said.
To illustrate its new policy, Princeton showed in a chart how projected aid awards would cut the cost of attendance for families living in the United States with no more than one child in college and less than $150,000 in assets (not counting retirement funds or a primary residence they might own).
Under those circumstances, a family earning $150,000 would be expected to pay $12,500 a year. The contribution would be $25,000 a year at an income level of $200,000, $37,500 at an income level of $250,000, and $50,000 at an income level of $300,000.
All of those sums are substantially lower than the current cost of attendance — nearly $80,000 — for families that receive no financial aid.
The chart did not specify how the scenarios would work for international students. But Princeton officials say the university meets full financial need regardless of citizenship.
Princeton’s formula spotlights an open secret of higher education: The definition of financial need can vary hugely from school to school. Families making in the range of $300,000 a year would qualify for little or no need-based aid at many other colleges or universities. But Eisgruber argued that such cases deserve attention, too, especially when families have multiple children.
“We’re talking about families that face difficult trade-offs,” he said, “where paying for a college education is something that can require a lot of budgetary sacrifice.”