In a sweeping new financial aid initiative announced today, Harvard said it would significantly reduce the expected contributions from middle- and upper-class families and eliminate loans for all students.

Undergraduates whose families make between $120,000 and $180,000 per year will be asked to pay 10 percent of their yearly income in tuition, the University said in a statement.

The program expands on the Harvard Financial Aid Initiative, which was expanded in 2006 to eliminate tuition costs for families making less than $60,000 a year.

In a conference call with reporters this afternoon, University President Drew G. Faust said that the program, which will increase College's financial aid grant budget by $22 million—more than 20 percent—will be paid for using a variety of sources, including Faust's discretionary fund and funds from the Faculty of Arts and Sciences.

Faust said that she hopes that the University's upcoming capital campaign will include a "substantial emphasis on financial aid."

Faust and FAS Dean Michael D. Smith added that they are also considering ways to improve graduate student financial aid, and said that an announcement will be made in the "near future."

Currently, 763 families of Harvard undergraduates make between $120,000 and $180,000 dollars yearly, according to William R. Fitzsimmons '67, the College's dean of admissions and financial aid.

—Check thecrimson.com for updates.

—Staff writer Laurence H.M. Holland can be reached at lholland@fas.harvard.edu.