As more Ivy League schools expand their financial-aid policies, officials say that elite schools are finding themselves in a bidding war.
And it's all over the same students, those from middle- to low-income families.
Within the past few weeks, three top tier universities -- including Penn -- instituted similar reforms to their financial-aid programs.
But the actual number of students from low- and middle-income families they are trying to attract intensifies competition for them.
They "are competing over a relatively small segment of the student market," said Tony Pals, a spokesman for the National Association of Independent Colleges and Universities.
Their competition strategy, higher education experts say, is to up the ante with increasingly generous financial aid packages.
Harvard University announced last Thursday that parents who earn $60,000 or less per year will not have to contribute to tuition costs. Harvard will also reduce the parental contribution for families with annual incomes between $60,000 and $80,000.
Harvard's announcement comes exactly two weeks after Penn released its own new financial-aid program, which will provide no-loan aid packages to eligible students from families earning $50,000 or less per year.
The parallels between these policies and ones at Yale and Stanford that give special aid benefits to students from a certain income bracket are no coincidence.
"All of the Ivy League institutions are looking hard at making sure they meet the needs of low income students," said Bonnie Gibson, Penn's budget manager.
Sally Donahue, director of financial aid at Harvard, also noted a newfound focus on courting low-income students.
"We hope our new financial-aid initiative will better inform students ... that our recruitment succeeds in reaching more students of modest means," Donahue said.
But only a few students will be affected by the change in policy, said William Hamm, president of the Foundation for Independent Higher Education.
"It won't radically change the world," he said.
The affected low-income students are only those who are "academically eligible" to attend schools like Harvard and Penn, Pals said.
Both schools' newly announced financial-aid policies are meant to reel in those qualified students, financial-aid officers say.
Still, some Penn officials add that this trend in financial aid is more than just a bidding war.
"It's an attempt to ... be responsive to communities that otherwise wouldn't have been able to afford us," said Lee Stetson, Penn's director of undergraduate admissions.
Stetson added that the expansion of financial-aid packages across the Ivy League is an "enhancement of the competition" that the schools already face on a regular basis.
Because of its relatively low endowment -- Penn's is $4.4 billion, almost a quarter of Harvard's -- Penn must work harder than its peer institutions to augment its financial aid policy, Stetson said.
But this competition is not necessarily driving these schools to announce their new policies in rapid succession.
Pals said most schools are currently making their final budget decisions for the upcoming year, including new tuition costs. Changes in financial aid policy are part of this decision process.
Donahue added that the timing of Harvard's announcement has nothing to do with Penn's.
Other members of the Ivy League see no connection between the two schools' policies.
"Penn's move is not competition for Harvard and Yale," said Caesar Storlazzi, director of financial aid at Yale University.
"There's more value in Harvard's name, so even if a student were offered $5,000 more [in financial aid] at Penn, that student would still choose Harvard."
