Many colleges in the Boston area and beyond are boosting financial aid this fall to help offset rising tuition costs, building on efforts that have accelerated since the recession amid sharp criticism of spiraling tuition and fees and crushing student debt.
Boston College, which charges more than $55,000 in tuition and other costs, will spend $90 million on need-based financial aid, a 6 percent increase. Northeastern University, where full price is $53,000, will dole out $188 million, up more than $30 million from two years ago. The state’s flagship campus, the University of Massachusetts Amherst, where in-state students pay $23,000, will distribute $60 million, almost double what it spent in 2008.
Nationally, financial aid to undergraduates has risen sharply, from $21.9 billion in 2007 to almost $30 billion last year, as colleges continue to vie for cost-conscious students and respond to the growing need for assistance among hard-pressed families.
Even as they increase overall financial aid, some are requiring certain students to chip in more.
Cornell University, after raising financial aid by nearly 20 percent annually since 2008, will begin next year to require students from families who earn more than $60,000 to take out loans and pay more of their work earnings. Currently, the threshold is $75,000.
MIT will require that students from families who make less than $75,000 a year contribute $6,000 a year toward the cost of their education, up from $4,400.
“It is a partnership,” said Betsy Hicks, who directs student financial services at MIT. “It’s reasonable to expect students to do some working and borrowing.”
The Cambridge university, where base tuition and fees are $52,500 a year, will hand out more than $95 million in financial aid, a nearly 5 percent increase from last year. By reducing aid to lower-income families, the school can help spread aid to more students, Hicks said. Many students qualify for federal financial aid, which can be used to pay their increased contribution.
College costs have come under sharp scrutiny this year, with President Obama saying he was “putting colleges on notice” that regular tuition increases above inflation are not sustainable. Obama has called for increasing government aid to students, which critics say fuels tuition increases, and for linking federal assistance to a college’s success in containing costs.
Over the past decade, tuition at public four-year colleges increased at a rate 5.6 percent higher than inflation, substantially faster than the previous two decades. Total costs now average about $17,000, according to the College Board. Tuition at private four-year schools rose 2.6 percent beyond inflation over the same period, with average costs over exceeding $38,000.
As tuition has climbed, students are taking on more debt. College seniors who graduated in 2010 had an average of $25,250 in student loans, according to the Project on Student Debt. College debt now tops $1 trillion, prompting fears of a bubble akin to the one before the housing collapse.
Colleges, worried that financial constraints would keep students from enrolling, have responded by boosting financial aid substantially in recent years. At selective four-year private colleges, total financial aid has risen from $11,200 per student in 2008 to $13,400 last year, according to the College Board. At selective four-year public colleges, aid climbed from $1,110 per student to $1,380.
When expanded tax breaks for college expenses are taken into account, the net cost of attending independent colleges has actually declined 4 percent since 2007, analysts say.
“When the recession hit, schools were really afraid that people just wouldn’t be able to afford it,” said Sandy Baum, a policy analyst for the College Board who studies college costs. “There’s been a definite upward trend.”
Baum said raising tuition and aid has a psychological appeal as well. Families associate high tuition with quality, and financial aid makes them feel both wanted and savvy.
But others say the increased aid is undercut by tuition hikes, and that the cost of college is well beyond many families’ means. Many states have scaled back support for public colleges, forcing them to raise tuition on struggling families.
As a result, students are graduating with substantial debt, not to mention uncertain job prospects, said Rich Williams, higher education advocate for US PIRG, a public interest group. Williams said the infusion of aid has helped stabilize college costs, but that many students are scared off by the high sticker price.
Others noted that some colleges are basing a substantial portion of aid on merit rather than financial need, benefitting wealthier families.
Terry Hartle, senior vice president at the American Council on Education, said the strategy of raising both tuition and aid is risky, particularly with competition for students from wealthier backgrounds.
“That strategy only works as long as there are people willing to pay the full posted price,” he said.
Hartle said that tuition has outpaced inflation and family income for a generation, but that families have been generally willing to pay it. Sooner or later, he said, tuition will reach a point where that will change.
At Harvard, parents of incoming students who earn between $150,000 and $180,000 will now be required to pay just over 10 percent of their income. Previously, they had to pay between zero and 10 percent.
But Harvard is increasing subsidies for less affluent families, raising the ceiling for no contribution from $60,000 to $65,000. In all, the financial aid budget will increase $6 million over last year to $172 million.
“The total investment continues to grow,” said Jeff Neal, a university spokesman.
Northeastern University said it has increased aid to attract students from less affluent backgrounds with the goal of creating a “rich educational environment.” At the same time, the college must attract enough students who can pay full freight, now more than $53,000.
“We have to strike that balance,” said Jane Brown, vice president for enrollment management at Northeastern. “But in these years of recession, colleges and universities have tried very genuinely to respond to the challenges families face in financing a college education.”