College! Podcast Episode 8: College Costs, Harvard’s Tuition Shift, and What Could Go Right?

College! Podcast Episode 8: College Costs, Harvard’s Tuition Shift, and What Could Go Right?

Higher education is shifting yet again, and if you’re a parent or student planning for college, you need to stay informed. In this episode of College, hosts Matt Carpenter and Peg Keough discuss some major updates, including Harvard’s new tuition policy, the Department of Education layoffs, FAFSA glitches, and how endowment taxation could change financial aid. They also challenge the narrative around “no-loan” schools and provide actionable insights on how families can take control of their college planning journey.

Let’s break down the key takeaways from this episode and what they mean for you.

Harvard’s New Tuition Policy: Who Really Benefits?

Harvard recently announced a significant change to its tuition policy—families earning up to $200,000 per year will now receive free tuition. For families earning less than $100,000 annually, Harvard covers the entire cost of attendance, not just tuition.

At first glance, this sounds like a game-changer for middle-income families. However, Peg highlights an important detail: The policy often includes a caveat—income with reasonable assets. This means families with significant non-retirement savings may not qualify, even if their income falls within the stated range.

Harvard is already known for its generous financial aid policies, and while this change is a step forward, families must read the fine print. If your student is considering Harvard or other elite institutions with similar policies, be sure to check how assets are factored into financial aid calculations.

Interested in hearing more about how Harvard’s tuition changes could affect your family? Listen to the full episode here!

Department of Education Layoffs and FAFSA Challenges

The biggest shake-up in higher education policy this month is the Department of Education’s massive layoffs. Nearly 50% of the department’s workforce was cut, including over 300 employees from Federal Student Aid (FSA), the team responsible for FAFSA processing.

Not surprisingly, within 24 hours of these layoffs, FAFSA experienced a significant outage. While officials claim the issues were unrelated, Matt and Peg speculate whether a reduced workforce contributed to the failure.

For families, this raises concerns about FAFSA reliability and support. If you haven’t completed your FAFSA yet, it’s more important than ever to apply as early as possible and double-check your submission for errors. A smaller department means fewer staff available to assist with financial aid issues.

Do Colleges Really Meet 100% of Need? Not Always.

Many prestigious universities claim to meet 100% of demonstrated financial need—but do they actually deliver?

Matt and Peg’s research suggests that some top schools fall short. Schools like Brown, Boston College, Northeastern, Northwestern, Duke, Tufts, and Cornell all claim to meet full need, yet in practice, many families receive aid packages that leave them with significant gaps.

What’s the issue? The way schools define “need” varies, and some institutions calculate a higher Student Aid Index (SAI) than others, meaning families are expected to contribute more out-of-pocket. Peg and Matt emphasize the importance of digging into each school’s methodology, including how they assess home equity, non-custodial parents, and other financial factors.

Will colleges really meet the financial needs of your family? Listen to the full episode here to learn more!

The “No-Loan” Myth: A Marketing Gimmick?

Another buzzword in higher education is the no-loan policy. Schools like Notre Dame have recently adopted this approach, which means students’ financial aid packages will include grants instead of loans.

Sounds great, right? Not so fast.

In this week’s episode, Matt explains that while schools remove federal loans from initial aid packages, families who need to borrow can still take out loans—but only if they ask for them. The problem? Many families assume they can’t borrow at all and turn to less favorable private loans.

The takeaway? If you need to borrow, don’t assume a school’s “no-loan” policy means you’re out of options. Always ask if you can access the federal Direct Student Loan, which offers lower interest rates and more flexible repayment options than private loans.

Not sure how to navigate schools with a “no-loan” policy? Find out how in the full episode!

Proposed Endowment Tax: Will Wealthy Colleges Pay More?

A new proposal suggests increasing the tax on large university endowments from the current 1.4% to a massive 35%. While this is far from becoming law, it raises an interesting question: Should elite universities with multi-billion-dollar endowments contribute more to funding education?

Currently, only schools with more than $500,000 in endowment per student pay this tax. This includes Harvard ($51 billion endowment) and Yale ($47 billion), but not Columbia, which has a larger student population. If passed, this tax increase could pressure elite schools to allocate more money to financial aid.

What Could Go Right? A Positive Outlook for Families

With so much uncertainty in higher education, Matt and Peg end the episode on an optimistic note. Here’s what they hope to see in the future:

• More efficiency in the Department of Education – If done correctly, budget cuts could reduce waste while keeping essential services intact.
• Greater financial awareness among families – With the FAFSA challenges and rising college costs, parents and students may start paying closer attention to affordability earlier in the process.
• Increased transparency in financial aid – If colleges face pressure to be more upfront about costs and aid policies, families will have better tools to make informed decisions.

Final Thoughts: Take Control of Your College Planning

If there’s one thing to take away from this episode, it’s this: “Don’t assume the system will figure it out for you.”

From misleading financial aid policies to FAFSA issues, families need to be proactive in their college planning. Research each school’s methodology, ask questions about aid packages, and make sure you understand what you’ll actually pay—not just what the brochure says.

👉 Want more insights on college affordability? Subscribe to College wherever you listen and share this episode with friends and family who are preparing for or knee deep in their college journey.