Princeton boosts financial aid despite potential budget cuts, new endowment tax

Princeton announced Thursday that most students with families making up to $150,000 a year will pay nothing to attend for the upcoming school year as part of the most significant expansion of financial aid since 2023.

Most undergraduates with families earning up to $250,000 a year will not pay tuition as part of $327 million in financial aid spending, a $44 million increase from last year.

Previously, the annual family income threshold to receive full financial aid was $100,000.

The financial aid increase for a program already known as one of the most generous in the country comes amid a rocky financial picture for many elite universities, which are confronting the loss of research federal funding and an endowment tax passed by Congress in July. In May, Princeton asked departments to prepare for budget cuts of 5 to 10 percent and acknowledged the potential of layoffs.

The financial aid increase could also reduce Princeton’s tuition-paying student population as the University faces down an 8 percent endowment tax as part of the One Big Beautiful Bill Act. The bill exempts educational institutions with fewer than 3,000 tuition-paying students from the endowment tax and is scheduled to take effect in 2026.

According to the annual Frosh Survey conducted by the ‘Prince,’ about 69 percent of students in the class of 2028, 65 percent for the class of 2027, and 63 percent for the class of 2026 came from households making under $250,000. PhD and masters’ students in the School of Public and International Affairs generally pay no tuition. Other masters’ programs have alternative aid options and have comparatively lower enrollment (around 200 last school year).

The University declined to comment on the number of tuition-paying students at Princeton.

The announcement made by the University calls its financial aid program “one of the most generous in the country.”

“Through our increased investment in financial aid, we are making the transformative experience of a Princeton education more affordable for more students than ever,” said Provost Jennifer Rexford ’91 in the announcement.

The announcement also acknowledged the alumni and other donors who contribute to the University’s ability to have a strong aid program. It does not, however, reference the increase on the tax on endowment, whose payouts cover about 70 percent of the financial aid budget.

In a press release announcing the expanded program, the University also said that Pell Grant recipients accounted for the 25 percent of the incoming Class of 2029, the highest percentage in Princeton’s history.

Devon Rudolph is an associate News editor and staff Sports writer for the ‘Prince.’ She is from northern Virginia and typically covers student life and USG.