America’s middle class is getting squeezed by the soaring cost of attending elite colleges. And those schools — themselves pressured by attacks from the Trump administration over federal funding — are starting to get the message.

Harvard, MIT and the University of Pennsylvania have each in recent months expanded the range of students who qualify for free tuition to those from families earning up to $200,000. More Ivy League institutions and selective private colleges with robust endowments are expected to follow suit, as millions struggle to pay back student loans and schools grapple with growing backlash to how expensive it’s become to get a degree.

The new aid thresholds, which go into effect for the 2025-26 school year, are no coincidence. A Bloomberg analysis of financial aid data from 50 selective colleges shows that in many cases, middle-class families, defined by some metrics as making between $100,000 and $300,000, earn too much to qualify for meaningful aid but too little to afford college out of pocket.

The squeeze starts at about $150,000 of pre-tax household income, when families are expected to fork over roughly 20%, or about $30,000 annually, for tuition. At $270,000 of income families are expected to pay $61,000 a year. Most schools cut off financial aid at about $400,000 of income, according to the analysis.

The numbers, which are averages based on aid estimates generated by a college cost calculator called MyinTuition that’s used by scores of US colleges, highlight the strain faced by many parents who, by most nationwide measures, would be considered relatively well off but are struggling to find ways to keep their kids out of debt.

“The financial aid system ignores the reality of many people’s financial situation,” said Ayush Natarajan, 19, who was accepted in 2024 to his top choice: the $99,000-a-year University of Southern California. “They look at whether you’re low income or extremely wealthy, and leave out everyone in between.”

Natarajan, who lives in Los Angeles, was awarded around $5,500 in need-based aid from USC. That was a tough pill to swallow for his parents, who are helping his older brother pay for medical school and take home about $185,000 annually after federal and California income taxes. Natarajan opted to instead attend UCLA, where the in-state price tag is $42,000.

Sticker Shock

Applying to college is a nerve-wracking process for families. Students stress over applications and whether they’ll get into top schools. And for parents, there’s the ever-escalating price tag, which is now nearly $100,000 a year at some universities. That makes higher education one of the largest expenses a family incurs. But there’s very little transparency when it comes to determining the actual costs, especially for families taking out loans.

That’s why many colleges have implemented “net price calculators” like MyinTuition, which was developed by Phillip Levine, an economics professor at Wellesley College. The tool offers estimates of what a family will have to pay based on a series of questions about a student’s financial profile, including income, home value and investment account balances. Once the student inputs their information the calculator offers a range of aid packages, listed as low, average and high.

Once students apply, they provide schools with detailed financial information that is used to determine aid, with the colleges using their discretion to create the packages. The Bloomberg analysis of private colleges didn’t include merit aid, which some universities offer to lower costs for accepted students.

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As the sticker price to attend college continues to rise, so does the amount of aid that colleges distribute. That can make the process more opaque and stressful as accepted students wait to find out about their packages, which can shift from year-to-year. Another complicating factor is that some schools include federal student loans in their aid calculations, while others don’t.

These days, nearly half of first-year students at the top schools in the US pay full price, meaning the students come from households with annual incomes at roughly $400,000 or above, according to the Bloomberg analysis. At the other end of the spectrum, some 16% are receiving Pell Grants, designed to help low-income families pay for college.

But for those in the middle, there is acute financial strain as they try to set their kids up for a path to prosperity.

“There are a substantial number of Americans that make too much money and don’t qualify for aid — these are people that are clawing their way up the socioeconomic ladder,” said Mark Salisbury, the chief executive officer of TuitionFit, a website that collects scholarship aid letters from students to provide pricing comparison. “They’re most likely to rationalize the high price of prestige and do whatever they can to attain it.”

That includes Ayush’s father, Natarajan Viswanathan, who views it as his duty to pay for his children’s education and help them avoid student loans. But Viswanathan, an IT services consultant, has already used up a 529 account, drained savings and dipped into his 401(k) to help his sons pay for school so far.

With fewer financial resources to tap, he’s worried about how they’ll manage in the years to come.

“I’ve been putting off paying for some things,” said Viswanathan. “For the year beyond I don’t know what we’ll do — maybe we’ll take out a loan against our home or move to a cheaper state.”

Faulty Formulas

The cost of attending college has outpaced inflation for years, and a tepid entry-level job market has more students questioning whether it makes sense to take on debt to pay for a degree. Still, even with elite institutions including Harvard, Columbia and Princeton facing attacks by the Trump administration and Republican lawmakers, gaining acceptance to an Ivy League school, or a handful of other top colleges, is still seen as a key step on the path to building wealth.

These schools have seen their admissions rates plummet as applications flood in, and there’s no sign that will slow down — even as tuition continues to rise. The higher sticker prices have caught the attention of GOP lawmakers who have launched an inquiry into Ivy League institutions for appearing to “raise tuition prices while engaging in price discrimination by offering selective financial aid packages to maximize profit.”

While there’s little pushback on the idea that college has gotten too expensive, one of the trickiest things for families to navigate is the wide divergence in aid offers from school to school and the lack of consistency around how these packages are calculated.

At USC, families that make around $180,000 are expected to pay anywhere from 22% to 33% of their income towards tuition, or roughly $50,000 on average — the largest financial burden out of the schools in Bloomberg’s analysis, each of which uses the MyinTuition calculator.

A family with the same financial profile is expected to contribute 13%, or $24,000, towards the annual tuition at MIT.

At Williams College, a student with $300,000 of family income would be asked to pay from $43,000 to $73,000 a year toward the roughly $92,000 sticker price. The same student qualifies for little to no relief at Harvard, where tuition is around $87,000 a year, according to the analysis.

“Harvard has no maximum threshold for financial aid — all aid is determined on an individual family basis” the school said in a statement, which pointed to the recent expansion of its financial aid program and described it as “one of the most supported need-based financial aid programs in the world.”

A Better Deal?

As more families question the high cost of private colleges, many have shifted attention to the relative bargains at state universities.

State schools look better and better compared to private colleges as income climbs. In-state students from families making $200,000 or more pay close to full tuition, according to Meadow, a data company that calculates grants based on financial information and student grades for more than 150 colleges. But in most cases that’s still less than what they’d be asked to pay each year at private colleges.

But families making $75,000 to $150,000 can actually pay less at private colleges, which can offset higher tuition with more generous aid.

At the top of that income range, families are expected to pay roughly $35,000 on average at 15 public schools – roughly 20% more than the expected contribution at private universities. Many public schools also offer merit aid that can bring the cost down for high achieving students.

“There is a misconception that a state school is always cheaper,” said Amy Yamner Jenkins, a co-founder and chief operating officer at Meadow.

Aya Williams grew up in San Francisco and always thought she’d attend school in the University of California system. But after using net price calculators to estimate college costs, she discovered her dad’s income, around $145,000, seemed to disqualify her from almost all aid. Looking at more than $40,000 a year to attend a state school, she pivoted to smaller liberal arts colleges that gave aid estimates closer to what she could afford.

California offers a middle-class scholarship program for families making up to $217,000 a year, but those awards are “unfortunately not made apparent to students and parents until the summer,” a representative for the university system said in a statement.

Williams decided to attend St. Olaf in Minnesota, where she’ll pay about $14,000 after taking out student loans.

“I had one shot,” she said. “It’s like I have to get into these schools that have very specific financial aid guidelines or else I’m going to be drowning in debt before I even finish my undergrad.”