A growing number of the nation's wealthiest private universities are promising free tuition to families earning as much as $250,000 a year. The shift is being driven by competition for students, public pressure over prices that now approach $100,000 a year and, for a few small schools, a new federal tax on endowments.
Thirty-three colleges now advertise free tuition to families earning $100,000 or more, according to an analysis by financial aid expert Mark Kantrowitz for The College Investor. Princeton University and the University of Chicago top the list at $250,000.
The Massachusetts Institute of Technology was the first to offer free tuition to families earning under $200,000, beginning in 2025-26. Yale, Johns Hopkins and Emory each set $200,000 thresholds this academic year, according to Forbes.
In May, the University of Chicago said that beginning in autumn 2027, it will guarantee free tuition to families earning less than $250,000 with typical assets and cover housing, meals and fees for those under $125,000. Rice University followed in August, eliminating tuition for families earning up to $200,000 starting in fall 2027. Yvonne Romero, Rice's vice president for enrollment, said many middle- and upper-middle-income families assume they won't qualify for meaningful aid, and that the expansion "changes that conversation and simplifies the criteria."
The endowment tax factor
Federal tax policy also plays a role. The One Big Beautiful Bill Act, signed in July 2025, raised the excise tax on the richest endowments from 1.4% to as much as 8% but exempted private colleges with fewer than 3,000 tuition-paying students.
Princeton appears to have crossed below that line. The Daily Princetonian reported in May that a university investment official told a private alumni gathering the endowment was exempt. A university spokesperson told the paper Princeton complies with all tax obligations and will disclose its payments in 2028. Swarthmore College, with about 1,700 students, is also now exempt and says the change let it direct more endowment money to aid, helping fund free tuition for families earning up to $200,000 beginning in 2027-28.
For many schools, the guarantees may cost less than they appear. Phillip Levine, nonresident senior fellow at the Brookings Institution, said "many or most" students covered by the programs were likely already eligible for enough financial aid to attend tuition-free. "The major impact that these policies have is better communication for financial aid that they already offer," he said. "The financial cost of implementing these policies is not large."
Colleges have other motives too, Kantrowitz noted. These include maintaining campus diversity after the Supreme Court's 2023 ruling ending affirmative action. They also include answering critics of high sticker prices at a time when colleges discount tuition by 56% on average.
"As people focus to a large extent on what colleges charge in terms of their sticker prices, it leads to greater discontent about college pricing," Levine said. The guarantees can also aid recruitment, he said: "The ability to communicate to students that college is more affordable than they might think it is is a potentially effective enrollment strategy."
Who benefits
Elite student bodies still skew wealthy. At Princeton, 25% of last year's incoming class was eligible for federal Pell Grants, but 31% received no financial aid at all, Forbes reported. Levine said that because income and race are correlated, minority students are more likely to qualify. Clearer information about cost "has the potential to help minority students more," he said.
Free tuition nationwide would cost far more. Georgetown University estimates compiled by the Education Data Initiative put the first-year cost of a national "last-dollar" program, which covers tuition left after grant aid, at $34.59 billion. Under that model, 37% of funds would flow to students in the top income quartile and 13% to the bottom quartile.
A family earning $160,000 would qualify for free tuition at Yale but not at Stanford, Kantrowitz wrote, a gap that can exceed $100,000 over four years. Most guarantees also require both the FAFSA and the CSS Profile, and families with unusually large assets may not qualify, Forbes reported.
Tuition is only part of the bill. "Free tuition programs don't mean the college is free," Levine said. Non-tuition expenses, he said, average "in the vicinity of $20,000 a year." And because the programs largely repackage existing aid, they are "probably unlikely" to reduce student debt by much, he said.
Still, Levine said the programs matter if they correct the impression that college costs $100,000 a year. "It's a real thing if it can change behavior," he said, though "nothing in what we've said says that this makes college affordable."
"It's financially sustainable if it doesn't really cost the institution all that much," he said. In the end, he said, the test is whether students land at the schools that suit them best. "Anything that improves the fit is something that I would consider to be beneficial."
