Who Can Afford to Pay Ivy Plus Undergraduate Tuitions?

The emails and text messages started arriving Monday afternoon. Friends and associates sent me articles that mentioned the economic study indicating that the Ivy League colleges and their elite kin (known as the Ivy Plus institutions) favor the rich. The media campaign worked.

The New York Times article was titled Study of Elite College Admissions Data Suggests Being Very Rich Is Its Own Qualification. The Boston Globe article was titled Research from Harvard economists confirms elite colleges favor wealthy students. The NPR article was titled Affirmative action for rich kids: it’s more than just legacy admissions. The article in Fortune was titled Being rich makes you twice as likely to be accepted into the Ivy League and other elite colleges, new study finds.

Other than being part of the campaign to attempt to force elite colleges to drop legacy admissions, I don’t know why this information should be a surprise to anyone. Elite colleges and universities are not inexpensive. In Table 1 below, I provide a few statistics regarding enrollment numbers and tuition, books, room and board, and other expenses for the 12 elite colleges in the study (also known as the Ivy Plus institutions).

Ivy Plus colleges and universities

Not all institutions are alike when you compare their enrollments. The total enrollment ranges from a low of 6,744 students at Dartmouth College to a high of 34,782 students at Columbia University. Undergraduate enrollments range from a low of 4,458 at Dartmouth to a high of 15,735 at Cornell University. While graduate students were not part of the study nor the focus of this article, it’s obvious that additional graduate students impact universities’ business models in many ways including tuition, research grants, teaching fellowships, etc.

Tuition and fees, books and supplies, room and board, and other expenses comprising the total cost of attendance are aligned very closely. Total cost of attendance ranges from a low of $79,850 at MIT to a high of $86,856 at the University of Chicago. The means and medians of each of the components as well as total COA are similar. The fact that the mean and median of total COA are only $11 apart on $83,612 and $83,601 is fascinating.

Who can afford an annual cost exceeding $80,000?

You don’t have to be an economist to ask that question. If you divide the mean total cost of attendance by .63 (100% of earnings minus 37% – the highest federal tax bracket), you quickly find out that a family must earn at least $132,700 per year pre-tax to cover just the cost of attendance for one child attending an Ivy Plus university. Of course, that’s on top of all other costs of living incurred for a family.

When you take a look at household income quintiles for U.S. households in 2021 (the most recent year published), you’ll see the following distribution:

household income quintiles

None of the mean incomes in the first four quintiles will cover the mean cost of attendance (COA) for one year at an Ivy Plus institution. It’s my assumption that a family earning the mean income of the top quintile won’t be able to cover the COA either. The $480,236 representing the mean for the top 5% is a number that is more likely to represent a household income able to cover Ivy Plus total cost of attendance on an after-tax basis.

How many undergraduates receive grants and loans?

Not surprisingly, the Ivy Plus institutions provide financial aid grants and loans to a large percentage of their undergraduates. Table 2 portrays data from the U.S. Department of Education’s College Navigator database as of the 2022-2023 year.

students with grants and loans

As reported to the Department of Education, the percentage of undergraduates who receive grants averages 55%. The percentage of undergraduates who receive Pell grants averages 16%. This is half of the national average of 32.1%.

Where the Ivy Plus schools have focused attention is reducing the number of students who use loans to fund their cost of attendance. The total number of students who borrowed in the most recent year is 10,518, only 11% of 96,542 undergrads attending the 12 institutions. There are two obvious ways to reduce the number of students who borrow – the first is to increase the dollar value of grants and the second is to increase the number of students whose families can pay the cost of attendance without borrowing.

The Pell Grant maximum for the 2022-2023 academic year was $6,895. Table 3 below shows the aggregate and average dollar amount for grants.

students with grants and loans

The group of 12 institutions have a wide range of the percentage of undergrads receiving grants with MIT providing the highest percentage at 76% and Brown University providing the lowest percentage at 45%. However, MIT’s average grant is $44,422 while Brown’s is $52,652. Princeton provides the highest average grant – $62,079. For those students receiving grants, the mean grant for all 12 colleges is $52,900.

How Many Students Receive Pell Grants?

Table 4 below shows the numbers and percentages of students receiving Pell Grants, the Total dollar value of Pell Grants received as well as the average Pell Grant Received.

students with grants and loans

MIT has the highest average Pell Grant at $5,286 while Cornell University has the highest number of students receiving Pell Grants at 2,737.

What Percentage of Students Have Loans to Fund Their Education?

As mentioned previously, only 11 percent of Ivy Plus students borrow through the federal loan program. Table 5 below provides more detailed information on loans by institution.

students grants and loans

Notably, there are only five institutions with double digit percentages of students who borrow federal loans. These range from Penn at 10% to Cornell at 23%. Princeton has the lowest loan percentage at 2% followed closely by Harvard at 3%. It’s my understanding that the researchers observed in the paper that there are fewer students at these institutions from the upper middle class. It is possible that their family incomes were too high to receive loan waivers (usually families whose annual incomes are less than $150,000) but not high enough to be able to afford to pay cash.

What is the Net Price to Attend the Ivy Plus Group?

One of the data points required by the Department of Education is the net price by income range. There are five standard ranges for all universities. In Table 6 below, you can see that the lowest income ranges have the lowest net price and the highest has the highest net price.

net price by income group for an ivy university

MIT has a $0 net price for the two lowest income ranges. In the middle range of $48,001-$75,000, Princeton has the lowest net price of $1,918. The highest net price in that category belongs to Harvard at $11,544. The lowest net price in the fourth range of $75,001-$110,000, MIT has the lowest net price of $7,332 with Harvard as the highest at $22,549.

The $110,001 category shows the University of Chicago to have the lowest net price at $36,082 while Stanford University has the highest net price at $55,770. Given the wide range of incomes in the top quintile, I think the last column needs to be differentiated more to determine at what level of income a student will pay 100 percent of the cost of attendance.

What Percentage of Students Are Full-Pay?

College Navigator provides a single datapoint that provides the percentage of first-year undergraduate students who do not receive financial aid. Table 7 below compares that percentage to the overall percentage of undergrads who receive grant aid (the highest % of the reported data in the analysis). This percentage should represent the percentage of full-pay students at each of the institutions. The two numbers added together should equal 100% but because one is a first-year full-time student number and the other represents all undergraduates, they do not.

percentage of students who attend Ivies with no aid

MIT has the lowest percentage of full-pay students at 21%. Brown has the highest percentage of full-pay students at 45%. The group’s media is 42%. One explanation for MIT’s low percentage of full-pay students could be the fact that it no longer has legacy admissions. Nonetheless, the average percentage of full pay undergraduate students at the 12 institutions is nearly 40%. It’s likely that high to support the institutions’ business models given the high dollar value of grants and high percentage of students receiving them.

Should Wealthy or Legacy Admissions Be Banned?

It is no surprise to me that there are a high percentage of full-pay students at the Ivy Plus institutions. The tables above demonstrate that grants are the largest portion of the group’s financial aid packages and are funded by donations and full-pay students. Should wealthy donors’ children or legacy admissions be banned? I think it is a decision for each school to make based on its culture and mission. However, given their high costs of attendance, offering admission slots to applicants who are the children of donors or alumni is one way to meet your financial targets.

It’s also important to note that this group of elite colleges may be among the few colleges in America that could afford to not participate in the federal grant and loan programs which some may choose to do if the Department of Education tries to ban legacy admissions. At some later date, I plan to review and write about the paper that has received so much press.

Subjects of Interest


Higher Education

Independent Schools


Student Persistence