A Harvard alumnus who started trading stock options from his dorm room is donating at least $125 million to support financial aid for Harvard College undergraduates, the university planned to announce Thursday.
Harvard’s largest-ever gift specifically devoted to financial aid, the donation from billionaire hedge fund manager Kenneth Griffin, founder of Citadel, will boost a financial aid program that is already the envy of other colleges. With $15 million more that Griffin is giving, which may go to aid or to other undergraduate priorities, his is also the biggest donation in Harvard College’s history.
Harvard is celebrating the 10th anniversary of a financial aid initiative that has made its tuition increasingly affordable for low-, middle- and even upper-income families. But officials said a donation such as Griffin’s still is essential because only half of the $182 million annual financial aid budget comes from the endowment, meaning the generous aid policy could become unsustainable if the university were to hit rocky times.
Part of the gift will go toward a challenge fund to encourage other donations, and part will help support 200 students each year, according to Harvard.
“When you endow financial aid in this way, it makes it a permanent commitment that will persist through any circumstances the university might encounter,” President Drew Faust said in an interview. “That, for me, is of wonderful significance, because it means beyond my time, beyond my children’s time, that this will be a signature aspect of Harvard College and Harvard University, this kind of investment in talent and in individuals from every conceivable financial background.”
Griffin, who graduated in 1989, installed a satellite dish on the roof of his Harvard dorm to facilitate his extracurricular trading, according to news accounts. He then started an investment fund with just a few clients, including his grandmother. The Chicago businessman is active in supporting Republican causes as well as education and the arts.
His financial aid gift—along with $10 million he is donating to endow a professorship at Harvard Business School—is part of Harvard’s $6.5 billion capital campaign launched last year in which college leaders have made financial aid a priority. For the Faculty of Arts and Sciences, which includes the undergraduate Harvard College, the $600 million financial aid target is one of the biggest parts of the campaign.
Griffin’s donation is also among the larger gifts ever given to the wider university in Harvard’s history, which also include two $125 million gifts from Swiss entrepreneur Hansjorg Wyss for a bioengineering institute and $100 million from David Rockefeller for international education and the arts.
It is also one of the biggest gifts to any university dedicated to financial aid, but doesn’t come close to the record $400 million John W. Kluge pledged to Columbia University for aid in 2007.
Harvard boasts that its bountiful financial aid means that 90 percent of American families would pay the same, or even less, for a Harvard degree as they would pay for state tuition. Families making up to $65,000 a year pay nothing, while those with incomes up to $150,000 pay between zero and 10 percent of their incomes.
Sixty percent of undergraduates received financial aid, and among those who do, the average family pays $12,000 a year for tuition, room, and board, according to the university.
Among the beneficiaries is Samantha Barkowski, a senior from Dorchester who is the oldest of five children in a family she calls “solidly middle class.” Her father owns “sober houses” for recovering addicts, and her mother is a magistrate in juvenile court. Barkowski said that with her financial aid package, she only pays about $1,000 a year to attend Harvard.
Harvard has also given her aid to spend a summer teaching in Botswana and to do an internship at a film and TV studio in Los Angeles. She also works long hours for the Red Sox and has even done baby-sitting for players’ children.
“Harvard saved me from years and years of student loans, and I’m so grateful,” she said.
With elite colleges turning away hundreds if not thousands of qualified applicants each year, several of Harvard’s peers—including Yale, Princeton, and Amherst—have decided to modestly expand their student populations, using their wealth to offer an education to more promising young people. Former Harvard president Lawrence H. Summers floated a similar idea over a decade ago.
Asked whether Harvard should do the same thing with its growing wealth, Faust and Michael D. Smith, dean of the Faculty of Arts and Sciences, both suggested that could happen, but only in the distant future. They noted that with about 6,700 undergraduates, Harvard College is already bigger than most of its peers.
Faust said Harvard’s focus now is on refurbishing its residential houses, improving the undergraduate experience, and expanding the faculty.
“What is the right size?” she asked rhetorically. “What is a size that can build the sort of community and interaction that we feel is such an important part of our students’ experience? That will be a question; I don’t have an answer to that.”