Expanding financial aid

It's a bidding war.

First, in 2001, Princeton announces that it will end financial aid loans to undergraduates and issue only grants. In 2004, Harvard gets rid of the parents' college contribution for all families making up to $40,000 per year. A year later, Yale follows suit for all families making up to $45,000.

A relative lull follows. Then, last December 10, Harvard declares a plan to cut costs for families earning under $180,000. On December 12, Swarthmore says it will no longer give loans, only grants. On December 17, the University of Pennsylvania says that starting in 2009 it will do the same.

Those are only a few of many. If this keeps up, top colleges will soon be offering free shipping and $500 cash back to the first thousand applicants.

All this jockeying is partly flat-out price competition. No matter how hard it is for high school seniors to get into their first-choice colleges today, no matter how many trilingual valedictorian organic farmers the Ivies reject, elite schools are always strategizing about how to bring in the best. Even Harvard can lose exceptional applicants to schools that make better financial aid offers -- or schools that bring out the heavy artillery: merit scholarships, which none of the Ivies offers.

The price war is also a publicity war. It is not easy, admissions officers will tell you, to persuade poor students that a place like Yale wants them. But when an Ivy League school makes a financial aid announcement involving a large dollar figure, the media notice. A jump in low-income applicants often follows. That ought to be surprising, since Yale and other Ivies have had need-blind admissions for decades. But for many -- or most -- Americans, the Ivies can seem like another country. An enticing new aid policy serves the same function as an attractive tourism brochure.

One school's announcement doesn't necessarily trigger the next. Sometimes it's a bona fide coincidence. The weekend before Harvard's latest, for instance, the Yale Corporation had discussed a new financial aid plan -- still under development at this writing, but Yale intends to reveal it in January.

What causes this convergence? It's the fact that elite schools are genuinely, actively seeking middle- and working-class and poor students. The Ivies need these applicants: they help diversify the student body, they deflect charges of elitism and insularity, and they are living, photogenic evidence that those gargantuan endowments are doing social good. But also, the Ivies truly want more economic diversity. These schools sit at the end of an educational and socioeconomic conveyor belt that smoothly and ceaselessly delivers wealthy students to their doors. It's not a function of strings being pulled or insiders favored (although strings are certainly pulled, and insiders favored). It's because wealthier children have an almost-guaranteed educational edge, not only in the quality of the schools available for them, but also in the potent nurturing effect of a comfortable environment on IQ.

Harvard is coming under fire, however, for including the $120,000 to $180,000 range in its latest aid gambit. Families making that much money are in the top 5 to 15 percent of the U.S. population. Yale isn't talking about its plans, but signs are that it may do something aimed lower on the economic scale. Keep an eye out for the next sally in the bidding war.