MIT is a true meritocracy. The Institute admits students without regard to their families’ financial circumstances and awards financial aid to them solely on the basis of need. This policy helps to ensure that MIT students are, quite literally, the best and the brightest. An approach with greater limitations would deny some of those very bright individuals the chance to come to MIT.

The Institute describes the effect of this policy as providing both access and affordability. That’s because it gives individuals from very modest backgrounds access to MIT, and also makes the Institute affordable for those of greater means who nonetheless need financial assistance. And as the cost of an MIT education climbs above $50,000 a year, the role of financial aid in ensuring both access and affordability is increasingly critical.

Aid from all sources — including the Institute, the federal government, and private and state sources — covers 46 percent of the overall undergraduate price (tuition and fees, room and board, books, personal expenses, and transportation). MIT provides 76 percent of that aid. Families cover the remaining 54 percent of the price, with student summer earnings being part of their contribution. As prices rise each year, though, the trend is a slowly but steadily growing reliance on financial aid.

MIT is one of a shrinking number of institutions that have remained wholly committed to need-blind admissions and need-based aid. What truly sets MIT apart, however, is the percentage of students from low-income households. Twenty-two percent of MIT undergraduates are from families earning less than $60,000 a year. MIT also educates a high proportion of first-generation college students, including 16 percent of the current freshman class.

Determining need and setting award levels

MIT believes parents and students have the primary responsibility, consistent with a given household’s income and assets, to pay for a student’s education. MIT calculates an individual student’s need by reviewing his or her family’s finances. That process yields an expected family contribution. If this contribution falls short of what it costs to attend the Institute, MIT awards the student financial aid to make up the difference.

MIT uses a simple system to package aid. A small portion of student need is met through a self-help expectation ($2,850 or $4,750, depending on family income), which may come from a student’s term-time earnings or a combination of earnings and student loans, according to each student’s choice. If a student’s need is greater than his or her self-help expectation, MIT provides a scholarship for the amount remaining. The Institute has been lowering this self-help requirement in recent years to remain reasonably competitive with its peers. Still, MIT’s requirement is higher —in some cases, markedly higher — than those of its key competitors.

Here is the typical price for an individual student during the 2008-2009 academic year:

• Tuition and mandatory fees: $36,390
• Room, board: $10,860
• Books, supplies, and personal expenses: $2,850

The total is $50,100. On average, families demonstrating financial need are expected to contribute $14,100. This leaves $36,000 to be covered in other ways. A typical financial aid package (which includes all aid from all sources) would involve a self-help contribution of $4,750 and an MIT scholarship of $31,250.

Financial aid FAQs

Q. Is financial aid from institutional sources keeping pace with the increases in tuition and other costs?

Between 1998 and 2008, MIT tuition and fees increased at an average annual growth rate of 4.2 percent, but MIT undergraduate scholarships rose by 9.1 percent as MIT more than doubled its scholarship expenditures from $27 million to $66 million. In 2008-2009, the Institute will award $74.2 million in undergraduate need-based scholarships — one of the highest amounts per enrolled student in the U.S. MIT is able to do this only through increased reliance on general funds to support undergraduate scholarships. In recent years, as much as one-third of the undergraduate financial aid budget has been supported by general Institute funds. The goal is to increase endowed scholarships so the financial aid program can be self-sustaining.

Q. How many students qualify for need-based financial aid?

Sixty-four percent of undergraduates qualify for some amount of need-based aid. Starting in 2008-2009, nearly 30 percent of undergraduates will have their entire tuition fee covered, as well as some or all of their other charges if needed.

Q. How much do students have to borrow and work?

Nearly half the Class of 2007 graduated with student loan debt; the average debt was $15,000, about twice the graduating debt at peer institutions. Two-thirds of undergraduates work during the academic year; average term-time earnings for such students are $2,770 a year, which is six to 10 hours of work per week.

Q. How much aid do MIT students receive altogether?

Some 90 percent of MIT undergraduates collectively receive more than $90 million in combined need-based and merit-based financial aid through scholarships, loans, and work-study.

Q. What is MIT doing to keep pace with peer institutions in financial aid improvements?

Since December 2007, schools including Harvard, Yale, and Stanford have announced major overhauls to their financial aid programs, such as free tuition for low- and middle-income families, using a percent of income to cap expected parental contributions of upper-middle-income families, and eliminating student loans regardless of family income level. It’s difficult for MIT to keep pace because the proportion of undergraduates with demonstrated need is more than 15 percentage points higher and MIT’s endowment is smaller. Nonetheless, starting in 2008-2009, MIT will ensure that students from families earning less than $75,000 will have all tuition charges covered with some type of scholarship or grant, and their self-help level will be reduced to $2,850 by eliminating the student loan requirement. For families earning between $75,000 and $100,000, home equity will be excluded in the calculation of financial need, and self-help will be reduced by $500 to $4,750. Families earning above $100,000 will continue to benefit from their home equity being capped in the determination of financial need, and their self-help will be reduced by $500 to $4,750 as well.