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2008-09 FINANCIAL AID ENHANCEMENT: Q&A

Here are some answers to questions you might have have about the financial aid enhancements we announced on March 7, 2008. We also have some background statistics to add further perspective.

1. How do you define a family's total annual income?

We define total annual income by including taxable and non-taxable sources of support from the prior calendar year. We do not define income by just using Adjusted Gross Income (AGI) as reported on U.S. federal income tax returns, as this is not representative of all sources of income available to a family.

2. What do you mean by "typical assets"?

By "typical assets" we mean a family's total net worth as compared to that of other families at the same income level. We include assets such as cash, savings, checking, investments, real estate equity and business net worth when evaluating assets for families earning less than $75,000. A few families might have, for example, a relatively low annual income but also have significant investments in the stock market or own valuable real estate in addition to their home. MIT will examine each case individually, but only a small number of families should be excluded on the basis of atypical assets.

3. My parents earn less than $75,000 a year. Does that mean we don't have to pay tuition?

If your family earns less than $75,000 a year and has typical assets, you do not have to pay tuition. We'll make sure that your tuition will be covered by scholarships and grants from a variety of sources, but we are the largest provider of this gift aid. Some students may have part of their tuition covered by a scholarship or grant from federal, state and/or private sources in addition to, or in place of, their need-based scholarship.

4. If I qualify to have my tuition covered, can I expect any additional help with my room, board and other expenses?

Depending on your level of financial need, you may be eligible for additional scholarships or grants to cover some of your other charges such as room and board. For example, a student with the maximum Federal Pell Grant ordinarily would have all of his or her room and board charges covered by additional scholarships because of MIT's Federal Pell Grant Matching Program, which effectively doubles the value of this federal grant.

5. My parents earn more than $75,000 but less than $100,000. Will we receive any additional help next year?

Yes — our financial aid enhancements will benefit your family in two ways. First, the amount we expect you to earn through work-study has decreased by 10% or $500. Second, if your parents own a home, we're eliminating their home equity in determining assets for the purposes of calculating financial need. This will result, on average, in a $1,600 reduction in the expected family contribution compared to our current practice. If your parents earn less than $100,000 and rent rather than own a home, we will make a similar reduction in their asset calculations.

6. What does it mean when you say you eliminated the student loan expectation for families earning less than $75,000?

If your parents earn less than $75,000 and have typical assets, we will no longer expect you to borrow. You will still have what we call a "self-help" expectation of $2,850. You can earn that amount by working 10 hours a week at an on-campus job paying $9.50 an hour. We have lots of exciting work opportunities including paid research through UROP, our signature undergraduate research program. Also, if you receive an outside scholarship or grant (such as a federal or state grant or a private scholarship), we use it to offset your self-help.

7. If my parents make less than $75,000 a year, does this mean I have to work on-campus if I would rather take out a low-interest student loan?

No — students from families earning less than $75,000 have the same flexibility as other MIT undergraduates when it comes to choosing whether they prefer to borrow or work to meet their college expenses. If you would rather borrow some or all of your $2,850 self-help, that's fine. What we did was lower your self-help to a level that now makes it possible to work for the whole amount, which was not true in the past.

8. My family earns more than $100,000 a year. Should we even bother to apply for financial aid?

By all means apply for financial aid regardless of your family income if you and your parents are concerned about financing an MIT education. It's possible to demonstrate financial aid at income levels above $100,000 because we take many factors into account when determining need, such as the education costs of your siblings. Approximately 38 percent of our current MIT scholarship recipients have parents earning more than $100,000.

9. I'm currently an international undergraduate at MIT. Do these changes apply to me as well?

Yes. We have a single set of financial aid policies that apply to current as well as incoming students, regardless of citizenship or permanent residence.

10. Do I need to complete a separate application for these new programs?

No. All you have to do is follow our directions for applying for financial aid.

11. Does this new financial aid announcement do away with your previously announced programs for financial aid recipients (the MIT Pell Matching Grant program and the UROP Guaranteed Direct Funding program)?

No – the financial aid enhancements will actually extend the reach of those earlier programs. Students with Federal Pell Grants will still have their grant  amount applied against their student term-time and summer earning expectations (effectively doubling the grant), but now more students will have full support from grants and scholarships without having to borrow. Under the UROP program, MIT scholarship recipients are still guaranteed only one semester of direct funding from the UROP office – but with the expanded reach of financial aid, more students will now be eligible for this program.

For more information, see the MIT press release on the Pell Matching Grant and the UROP web page on funding.

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