Bill Gasarch asked me to comment further on Harvard's new financial aid policy, which I briefly mentioned here, a post which strangely has gotten a few comments in the last 24 hours. (Of course, some crazy people have the wacky idea Harvard should be free.) One of the comments points to a recent op-ed piece in the New York Times; another commenter calls the piece illogical, which I'd have to agree with.) I'll offer my opinion, which has been colored by discussions with Harry Lewis. (By the way, have you bought his book yet?)
First and foremost, I'm glad Harvard did it.
One complaint is that Harvard only did it to stave off potential future legislation requiring it to spend more of its endowment. I just don't think this is true. Harvard has been raising its financial aid already quite substantially the last few years. There are plenty of other motivations and pressures to do so outside some sort of potential future legislation. In particular, if there are any political motivations, I'd say a more likely one is that the new President of Harvard and Dean of FAS did it to show some leadership and put a positive spin on their new administration out in the news. But I don't even think that's such a big reason. It's the direction Harvard's been moving for some time.
Another complaint is that this will put pressure on other schools who can't afford to do the same thing, particularly public schools, who will lose some talented students. I don't see this as a huge problem. Harvard only takes about 1700 students a year. Even if the whole Ivy League tagged along (like Yale has), that leaves plenty of talented students -- including the ones who would have gotten into Harvard but now didn't because the financial aid allowed a similarly or higher qualified student with fewer financial means to attend. When Harvard expands its entering class by a factor of 2, then people can complain what a terrible thing Harvard is doing, stealing good students away from other institutions. (Their argument will still be weak and misguided, though.)
I like how the two major complaints are so contradictory in nature. The first says Harvard isn't doing enough with it's big endowment; the other says Harvard is doing too much.
Me, I'm thrilled. Harvard did something good: it made attending Harvard more affordable. In doing so, it showed leadership, and has got people talking about the cost of college in places like the Opinion page of the New York Times. I hope it will lead to further positive changes, and improve the affordability college more generally.