The Boston Globe announced today that The Massachusetts Institute of Technology’s board of trustees agreed to waive tuition for students whose family income is less than $75,000 a year. This waiver will benefit 30 percent of MIT’s undergraduates. Tuition and fees at MIT is approximately $36,000 a year.
However MIT didn’t stop there, according to The Boston Globe, the College also announced that it is increasing its financial aid budget by more than $7 million, to $74 million, making it one of the highest financial aid budgets in the country. Also, MIT will no longer consider home equity when calculating assets for families earning less than $100,000. This could reduce payments up to $1,600 a year for eligible families.
This is obviously big news for the nation’s top rated engineering school, but I wouldn’t rush off to send my child there because chances are he or she wouldn’t get accepted. With a 12.7 percent admission rate for freshman and less than 22 percent acceptance for graduate school admissions, MIT is ranked the toughest school to get into by MSN and CampusGrotto.
So how does this really benefit the institution?
Kirk Kolenbrander, vice president for institute affairs, said “this is part of a long-standing commitment to financial aid. We’re trying to do the right thing for our students, and the very best students come from all economic classes.”
I think it’s great PR to demonstrate good will towards its students, and don’t get me wrong, I feel college tuition is extremely overpriced and is only going to get worse, but how do the students feel whose family income is slightly higher than $75,000 a year?
I also realize that MIT’s endowment is around $10 billion, but how will the institution make up for the lost revenues? The 2007-08 undergraduate enrollment at MIT was 4,172. If you factor in 30 percent of that is tuition free, that’s roughly $40 million a year. That’s a lot to make up each year and even though the endowment is high, it won’t last forever. And will there be a day when the new policy is reversed? I would hate to be that family.
I saw this phenomenon 5 years ago when I shopped for colleges with my younger son. One private school offered a package that would bring my out-of-pocket costs even with those charged by state universities in Ohio. Combined income in our house is a tad more than $75K, but the institution was willing to chip in about $15K per year. It would have made the private education affordable, but the kid chose a state school anyway.
If MIT invests its $10-billion endowment, it should be able to sustain the program easily. That $40-million cost you mention is less than one-half of one percent of the $10 billion. Add in the other $75 million it’s still just over 1%.
I don’t know who endows schools with all this money, but at Kent State, we’d sure like to meet them.
By: Bill Sledzik on March 19, 2008
at 3:19 pm