Despite the projected increase, a Pell Grant does not even meet the cost of one-ninth of a Harvard education.

Harvard's revamped financial aid program, announced this February, promises an $8.3 million increase in its budget, with an extra $2,000 in grant money added to each student's financial aid package.

Over the next two years, Harvard's tuition will most likely increase and, in effect, absorb the extra $340,800 added to Harvard's coffers with Pell Grant money, Donahue said.

The federal increase barely saves Harvard any money it would otherwise provide with institutional funding. If the Pell Grant increase were to be absorbed by next year's financial aid budget, which includes about $61 million in institutional money, Harvard would only stands to save .56 percent of institutional funding, assuming the number of recipients remained consistent.

"Government funding really isn't enough to meet the high cost of a college like Harvard," Donahue said. "It's not saving us money because we go ahead and budget for the amount students need."

However, to another institution, the increase in Pell Grant funding might significantly reduce the burden on their financial aid and scholarship programs.

"The availability of Pell Grants at the local level through the country is a great encouragement to students to think about testing themselves to apply to colleges and universities," said William R. Fitzsimmons, dean of admissions and financial aid for the College. "For some students, this increase makes the difference of whether or not they apply to colleges."