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A handful of top US colleges are taking steps to boost financial aid for low and middle-income families as the soaring cost of attendance fuels backlash from financially stretched students.

The University of Pennsylvania recently announced it will stop including a family’s home equity when determining financial aid eligibility. At the Massachusetts Institute of Technology, undergraduates with families earning less than $100,000 can expect to get a full ride starting next fall. In the University of Texas system students from families at that income level will attend college tuition-free.

The moves to boost affordability come as the cost of attending Ivy League universities and other top colleges approaches $100,000 a year. And while elite schools continue to be flooded with applications, an overall decline in student enrollment across the US has put a spotlight on the growing number of families questioning whether pricey degrees are worth it.

“What colleges are trying to do is avoid their cost of attendance from stopping students from applying initially,” said Brendan Williams, vice president of knowledge at uAspire, a nonprofit that helps students apply for financial aid.

The number of 18-year-old college freshmen fell by 5% this fall compared to last year, according to data from the National Student Clearinghouse Research Center. The botched revamp of the Free Application for Federal Student Aid, which prevented many families from filling out financial aid forms, was a key factor. Some students gave up and didn’t apply, while others became more sensitive to price, according to Mark Kantrowitz, a financial aid expert.

Penn joined Harvard and Stanford among schools that do not include equity in a family’s primary home in financial aid calculations. The families who stand to benefit most from this change are those who have lived in their homes for a long time, have paid off their mortgage or live in areas where home values have appreciated significantly, said Williams.

“That was something that so many families that I worked with were concerned about,” he said.

Penn also increased the income threshold for families to receive full tuition aid to $200,000, from $140,000. MIT made a similar increase to its threshold — now, students from families with incomes below $200,000 can attend the institution tuition-free starting next fall.

About 80% of American families fall under this category, according to the university. The median cost for students who received financial aid at MIT — more than half of the student population — was $12,938 for the 2023-24 school year. For those who don’t receive aid, the total cost of attendance for MIT is about $86,000.

“With the need-based financial aid we provide today, our education is much more affordable now than at any point in the past,” said Stu Schmill, MIT’s dean of admissions and student financial service who graduated from MIT in 1986.

An increasing number of families that are cost-conscious are opting for public schools instead. The University of Texas system announced that families who had an adjusted gross income of $100,000 or less will get tuition-free education starting next fall at any of its nine academic institutions.

The University of Michigan, Brandeis and Carnegie Mellon are among other schools that recently announced new household income thresholds that are expected to increase financial aid at their institutions.

“College costs too much,” said Williams. “It's definitely always been a concern for low-income families, but as the cost has gotten higher and higher, it does increase the number of families that this is a concern for.”

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