Nine months after Princeton University began a chain reaction of financial aid increases at America's top colleges, yesterday Harvard joined the generous in typically spectacular Harvard style.

Officials announced changes that will result in at least $2,000 more in direct for nearly half of all undergraduates, putting the University back on higher education's cutting edge after a semester and a summer of fiscal stubbornness.

According to Byerly Hall, yesterday's announcement--which allocates slightly less than $9 million more in total aid, a 20 percent increase on last year's $44 million undergraduate aid budget--is the most significant change in Harvard's financial aid policy since the advent of "need-blind" admissions nearly 40 years ago.

Last spring, Princeton, Yale and Stanford Universities and MIT announced total aid increases of up to millions of dollars. The University spent this summer reviewing these changes and yesterday Dean of the Faculty Jeremy R. Knowles announced his final decision.

Details of the reforms include:

. All students who receive direct scholarship aid in addition to "self-help" aid-meaning loan and work-study requirements-will have their self-help requirements reduced by $2,000 and the difference made up in direct scholarship aid. This change, which could also affect some students on the verge of qualifying for direct scholarships, is estimated to affect more than 3,100 students.

. All outside scholarship money earned by students will be used to reduce their self-help requirements. Before yesterday's announcement, 60 percent of a student's outside scholarships would be used to reduce direct grant aid. This change, which could allow some students to completely eliminate self-help requirements, is expected to affect about 2,000 students.

. Aid changes are effective immediately for allclasses, meaning that current students on aidshould receive a letter in the next few weeksinforming them that their aid award for this yearwill change. Please don't call us, say Byerly Hallofficials--we'll call you.

. Overall calculations of student need and thecontribution expected from parents-changeddrastically under Princeton, Yale and Stanford'splans--are unchanged.

The typical "self-help" requirement is about$7,000 per year, with around $5,000 in loans and$2,000 in work-study. In addition, Harvard usuallyrequires $2,000 in the form of a summercontribution.

The portion of Harvard's plan which reduceseach student's self-help by $2,000 echoes a movemade by MIT last March, when the Institute droppedself-help by $1,000 per student.

And the section dealing with outsidescholarships is lifted directly from Stanford'sreforms.

But the scope of this plan is simplyunprecedented. Princeton's massive aidincrease--which its officials hoped would bolsterthe school's desperately low percentage ofstudents on aid--was per student the mostexpensive of the aid changes announced thisspring, costing around $1,300 per capita.

Harvard's aid increase, divided by theCollege's student body-which this year hoversaround 6,600 people-comes out to about $1,350 perstudent, even more per student than Princeton's.And unlike its Ivy League peer, Harvard was nottrying to overcome a competitive disadvantage.

"We could have done nothing," said Professor ofGovernment Gary King, who was a member of theFaculty committee that reviewed aid policy thissummer.

"If you were running [Harvard like] a business,you wouldn't need to spend the money," he said.