“100% of students can graduate debt-free.” That bold promise greets visitors to the Harvard financial aid website. It sounds like a great guarantee—until you read the fine print. In reality, this pledge often falls apart for students who use outside scholarships to fund their education.
Harvard’s financial aid policy is clear: grants and scholarships from external sources are first applied toward a student’s term-time work requirement, which the website defines as “the amount of earnings during the academic year that we expect you to contribute toward your college costs.” Typically, for an upperclassman, this is around $3,500. Then, any additional outside aid reduces Harvard’s need-based scholarship offer before it touches the expected parent contribution calculated through an analysis of household income, assets, and other financial indicators. This practice of aid reduction is called “Scholarship Displacement.” It allows the University to pocket much of the extra aid students would receive.
Imagine you win a $5,000 scholarship from your hometown Rotary Club—after the work requirement, the remaining money goes back to Harvard; family contributions see no change. At first, this sounds like a responsible way to maintain a balanced financial aid budget. But in practice, it just discourages students from applying for outside scholarships—why would you work hard on an application that just adds money to the Harvard Corporation’s pockets? The solution is straightforward: outside scholarships must first reduce work requirements, then family contributions. Only after both are eliminated can Harvard adjust its aid.
I experienced this problem firsthand with my financial aid. When I received my financial assistance letter from Harvard, I was relieved to see a generous package. Still, I would have ended up deep in debt if I had accepted this offer. Fortunately, I had a backup plan: Reserve Officers Training Corps. I assumed the military would cover my tuition, and Harvard would continue to pay for my room and board.
However, I was wrong and blindsided by the actual financial aid policy. I learned that my ROTC scholarship would replace all of the aid Harvard had given me. This resulted in all of my room and board falling on my family. We would be on the hook for thousands of dollars they hadn’t planned on. I immediately met with my financial aid officer to express my deep frustration that I will still have to take out loans despite earning this scholarship. There was nothing they could do for me.
To be clear, my ROTC scholarship isn’t just “free money.” I have committed to serving on active duty in the Navy for five years after graduation. Yet, Harvard still treats this commitment as another way to line its pockets. Thanks to my future service, Harvard saves almost $90,000 annually, plus the financial aid they initially offered me.
ROTC is just one example. No outside scholarship, regardless of whether Harvard considers it “free money,” should be used to line the pockets of the University.
Thousands of students across Harvard face this reality each year. Coca-Cola Scholars, National Merit Scholars, Community Scholars, and many other scholarship recipients encounter this issue. A first-generation student could work themselves to exhaustion over the summer and win a corporate scholarship. What’s Harvard’s response? “Thank you,” says the Harvard Corporation. This money, which is in good conscience meant to support workers who give their time to the company, has no impact on the student because the financial office just takes the aid away from the student in response. Many scholarships honor people’s legacies, share family names, and support communities—yet, they all end up in a spreadsheet titled “Harvard Corporation Savings.”
Beyond the basic greed of it, this system undermines the entire purpose for which these scholarships were established. My community scholarship system’s mission is “aligning resources throughout our community to make postsecondary education and training available to all Battle Creek area residents.” Yet the scholarship I got from my community went to supporting Harvard rather than a “Battle Creek area resident.”
The policy also punishes initiative and equity. Students who hustle to apply for scholarships—whether from a local organization, national organization, or the military—shouldn’t be treated as a threat to the school’s balance sheet. In its current system, Harvard is sending the message to students: “We will try to make sure you can afford this school only if no one else helps you.”
It’s an attack on equity, too. 55% of students receive financial aid to attend Harvard. These students are not the ones the school should be trying to profit from. Many wealthy families can afford to send their children to Harvard no matter the sticker price. However, first-generation, low-income, and middle-class families are still expected to pay hundreds of thousands of dollars—even as their kids apply for scholarships to alleviate additional costs. How is it equitable to take away from someone’s experience on campus because they are stuck figuring out how to pay for it?
The Harvard website doesn’t specifically say why their aid is structured this way, but MIT’s website offers some reasoning for its similarly structured aid program. “In order to be equitable, we need to be consistent in what we ask all families to pay. An outside scholarship adds to what a family has available to pay.” This justification makes an important assumption: income is one of the only factors in savings. Not all families have the same amount readily available to pay (some choose not to save for college), so this cost often falls onto their kids who are applying.
The truth is simple: not all Harvard students can graduate debt-free. Many students still take out loans because parent contributions, no matter how optimistically calculated, aren’t always parent contributions. Can a student graduate from Harvard debt-free if the money they earn through scholarships vanishes into Harvard’s $53.2 billion endowment?
Luckily, there are solutions that could be implemented. First, the scholarships should replace the student work requirement. Next, they cancel parental contributions. Finally, if more money is received, Harvard can reduce their aid (so the student doesn’t have a surplus in their account). This change would make Harvard more affordable while rewarding students for the scholarships they receive.
And this solution wouldn’t be a 100% loss for the University. The students who stopped applying perhaps more would go for scholarships if they were incentivized by reducing their parental contributions. Students who get significant scholarships may get enough to even go over their aid, which could eat away at Harvard’s aid burden. Incentivising scholarships may work out to get more savings for the University, if enough students start applying.
The problem with reforming scholarship displacement is that everybody does it. Yale, Princeton, MIT, Penn—it is quite challenging to find a top university that doesn’t use this policy. But Harvard holds itself to be a leader among its peers. A more equitable and fair financial aid system would add validity to this conceited view. Harvard would become not just another member of this financial aid system of the country’s top schools, but the leader in the fight for FGLI and middle-class students to be able to effectively fund their education.
Harvard has an extremely generous financial aid system—we as a student body should be grateful for it—but that doesn’t make it perfect. We must ask ourselves what higher education is about. The mission of Harvard Financial Aid is “to bring the most promising scholars to campus—no matter their backgrounds.” Does the current policy in place actually do this? Is it really doing anything to support opportunity, mobility, and equity? Or is it just here to protect the balance sheet? Scholarship Displacement disproportionately impacts low-income, middle-class, and first-generation students, and it is time Harvard made a change.
Kalvin Frank ’28 (kfrank@college.harvard.edu) is quite passionate about this issue.