As 2007 drew to a close, four of the nation's most selective colleges: Harvard, Duke, Swarthmore and Pomona, all announced plans to revamp their financial aid policies by replacing loans with grants. Other institutions, most notably Princeton and Columbia, had already implemented similar plans.

Harvard's policy is novel; according to the Chronicle of Higher Education, the university announced that families with incomes between $120,000 and $180,000 would be asked to contribute no more than 10 percent of their student's total expenses for college, while the neediest families would pay nothing. Harvard will raise its student financial aid budget by $22 million to implement this policy. With a $35 billion endowment, highest in the nation, Harvard can afford to do it; the added monies for aid are just a drop in the bucket.

This is good news for anyone wishing to apply to Harvard; cost is less of a detriment to well-qualified candidates in upper middle class families. A $180,000 family income gets spread awfully thin when there's more than one child in college and the family lives in a high-cost metro area. But if cost is less of a detriment to going to Harvard, than Harvard will become more selective, because the number of applications will surely rise.

This has a ripple effect, students apply to more colleges, so they're sure they will be admitted somewhere; other institutions become more selective too. Few can afford to do what Harvard has done. Imagine the resentment in a household where a Harvard reject must attend their safety school — and must pay more than they would have paid to go to Harvard, even if the safety school is their state university.

It's difficult to pity families in this predicament; the parents earn a good income and their child has not wanted for much, until this point. There are small tax credits; the Hope Tax Credit allows a deduction of $1,650 per student for the first two years of college, and the Life Long Learning Tax Credit may cover up to $2,000 of tuition for the remaining years. The cap on family income for these credits is $114,000.

The relief is paltry when I consider that Rutgers, my home state university, costs $20,000 for tuition, fees, room and board for an in-state student. It's reasonable to expect the entering freshmen and their parents to spend $100,000 for a bachelor's degree after four years, and certainly after five.

Government loans can't cover the total cost of a Rutgers degree; the maximum undergraduates may borrow ranges from $7,500 to $10,500 — and that's for a combination of interest-subsidized and unsubsidized loans. The maximum they may borrow for four years is $37,000; this principal is unlikely to rise as fast as Rutgers' tuition.

The federal government allows borrowers to consolidate those loans and repay them over 20 years; our $37,000 borrower repays $295 a month.

Assuming they qualified; there are needs tests associated with these loans.

Assuming they have no other loans at higher interest rates; the interest on interest - subsidized loans is 6.8 percent, and 7.9 percent for unsubsidized loans. Lord help any college student or parent who pays more principal and interest on student loans; it's not worth it.

So what's a family to do, if federal loans can't cover the difference between their resources and the total cost of college?

I guess they could hope their child gets into Harvard, or its kin.

Or they could hope that colleges loosen their purse strings; according to the National Association of College and University Business Administrators, the average institution spends only 4.6 percent of their endowment. The approach of Congress and the Bush Administration has been to slap colleges on the wrist and tell them to or loosen purse strings so that financial aid spending can be cut. The finger pointing is useless; the colleges have little to no incentive to cooperate.

The way I see it, we need an incentive to encourage schools to make more scholarship aid available, to encourage students and parents to become more financially prudent, and encourage students to do their best in the classroom. Grades are still important interview selection criteria; recruiters ask career centers to filter resumes by GPA before they see them.

Therefore, I propose a new incentive that I call the Federal Scholarship Match.

It works like this: for every dollar, up to $7,500, earned through an academic or service scholarship, the federal government would match it, up to the total cost of tuition, fees, room and board. This would not preclude a student from receiving other assistance; if the match doesn't meet the total financial need, the student can receive loans or other aid.

Thus, for example, a bright student who receives a $3,000 scholarship to Rutgers (from any source other than the federal government: private, state, the school) would receive an additional $3,000. If he received a full-tuition ($8,500 today) scholarship, he'd receive an additional $7,500 in federal match, so he and his family would be responsible for the balance, or $4,000.

The family with the six-figure income could pay the $4,000 out of their pocket — or the student could earn it through employment.

I can just see the head spins and eye rolls in some quarters of the higher education community; this proposal redefines the idea of need-based aid. This is what I'd hear: The match puts the needs of the brightest, regardless of income, over the truly needy. It would also reduce the number of full-ride scholarships offered out of college coffers because the government would chip in.

I disagree with the first point; if a student was motivated enough to earn a scholarship, they deserve the opportunity to go to college. They also deserve to stay, if they were motivated enough to maintain the grades to keep it.

The second point is true, but colleges could offer an affordable education to more students. The matching program needs a catch: colleges must loosen their purse strings to qualify for the match and agree to aid more students.

In effect, the federal government would give every college the incentive to follow Harvard's lead.

Who knows: a success match program could encourage Congress to offer young taxpayers a tax credit to help sustain it; thankful recipients could apply some of the money that they might be applying to student loan debt.

And they'd help future generations, including their children, pay for college.