Total Undergraduate Financial Aid Exceeds $100 Million

By Kim Mann, Communications Officer, Student Financial Services and Betsy Hicks, Executive Director, Student Financial Services

Students at desks in classroomWith the cost of attending MIT surpassing the $50,000 mark in 2008-2009, it is no wonder that another marker was also topped. For the first time, the total financial aid undergraduates received from all sources went beyond $100 million.

In 2008-2009, an undergraduate could expect to pay about $50,100 for tuition, fees, room, board, books, supplies and personal expenses. Nine out of ten students received some form of need-based and/or merit-based aid, with almost two-thirds receiving strictly need-based aid. Of course, MIT only awards need-based aid, but many undergraduates receive merit-based aid from private sources.

It may come as no surprise that MIT is the largest provider of financial aid to its undergraduates with the federal government a distant second. Of the $105 million in financial aid undergraduates received last year, more than $73 million was scholarships awarded by MIT. The source of these scholarships is primarily endowed scholarship funds, but occasionally MIT also draws against the General Institute Budget to ensure access for undergraduates.

With recent enhancements to the MIT undergraduate financial aid program, fewer undergraduates find it necessary to borrow. The good news is that last year only 30 percent of undergraduates borrowed. The bad news is that the annual average loan for those borrowing surged to $7,700, up more than $2,000 from the prior year with 36 percent of loans borrowed coming from private sources. Given the credit crunch, it is likely that undergraduates borrowed more because their parents found it difficult to borrow for part of their expected contributions.

Term-time work has always been an important way for students to finance their education.  Approximately two-thirds of our undergraduates work term-time each year and their average earnings are about $2,850, which is comparable to two paid UROP’s.

So what’s in store for the future?  The student expense budget – an estimate of the cost to attend MIT – will rise to $52,000 next year.  Families making less than $75,000 a year and with standard assets can count on receiving scholarships from all sources equal to tuition and fees – which will be $37,782.  Students from these families will not be expected to borrow, but they will be expected to earn $2,850.  Students who receive Pell Grants from the federal government – about 15 percent of undergrads – will continue to have their Pell grants matched by MIT.

For folks who really want to dig into these financial aid statistics, check out the Reports to the President which are available on the web.  While it is still too early for the latest report summing up the 2008-2009 year, reports from prior years provide interesting information about how undergraduates and their parents finance their educations.