In the wake of Princeton's decision to increase undergraduate financial aid, Harvard College announced today a radical change in its own financial aid policies .

Effective next school year, Harvard will give all scholarship recipients an extra $2,000 in need-based-assistance, reducing the amount students on aid contribute from loan or jobs from $5,150 per year to $3,150.

The plan builds on changes made in 1998 that also increased all student grant packages by $2,000 and allowed students to use outside scholarships to reduce the self-help portion of their financial aid package.

"Now it's the student's choice to borrow or earn money," Director of

Financial Aid Sally C. Donahue said. "At $3,150, a student can work 12 hours a week at a job and pay it exclusively through earnings, and if you have no time to carry a job, you could choose to borrow that amount. The level is still manageable."

Administrators say the move was motivated by concerns that students' obligations to fill the self-help requirement of their packages might be detracting from their college experiences as well as their future career choices.

"The new financial aid program ensures that--no matter what their resources--all our students can embrace and enjoy the possibilities here, without carrying a significant burden of term-time work," Jeremy R. Knowles, Dean of the Faculty of Arts and Sciences wrote in a press release.

Director of Admissions Marlyn McGrath-Lewis '70-'73 said Harvard's plan should not be interpreted as a response to Princeton's initiative to replace student loans with outright financial aid grants.

"We've been planning this one for a long time," McGrath-Lewis said. "It's the time of year we always announce tuition and financial aid packages.

This is a sort of February ritual."

But McGrath-Lewis said that both Princeton and Harvard were profiting from financial success.

"It's the same amount [as Princeton's loans], but it's a prudent amount," she said. "We didn't have the money then [referring to '98] but we've just finished the capital campaign."

The capital campaign raised $225 million dollars earmarked specifically for the purpose of increasing student financial aid. Harvard's financial aid budget for next year is close to $100 million, with $63 million of scholarship funds coming from the endowment.