Feb. 22 (Bloomberg) -- Harvard University President Lawrence Summers slipped off his suit jacket and grabbed a Ping-Pong paddle. The former U.S. Treasury secretary under President Bill Clinton had come to a public high school in downtown Chicago on a rainy day last November with a message: Harvard wants you.

Summers, 50, volleyed with students from Walter Payton College Preparatory High School as part of his drive to broaden the student population at Harvard, which was founded in 1636.

He wanted them to know the nation's oldest and most prestigious university -- which counts seven U.S. presidents and four current U.S. Supreme Court justices among its graduates -- is a place where they would feel comfortable, Summers says. ``Seeing me play reinforced that,'' he says.

Summers has support from Harvard professors and students for his bid to bring low-income students to the school. That effort is being obscured by a faculty uproar over his comments, made in January at an economics conference, about whether women are less able than men to succeed in math and science. Harvard teachers said they may hold a no-confidence vote on Summers today.

Since he became Cambridge, Massachusetts-based Harvard's 27th president in 2001, the first economist to lead the university has offended blacks by clashing with African-American studies professor Cornel West over his political activities and his rap CD, and offended women with the January remarks.

`Turn Back the Clock'

West quit and took a job at Princeton University in New Jersey. Summers's remarks about women weren't released publicly at first; they came to light when a conference participant complained to reporters. The 500,000-member National Organization for Women called for Summers's resignation.

On Feb. 15, more than 200 Harvard professors met with Summers. Some criticized his management style and his comments about women, says physics professor Howard Georgi, 58. Faculty members asked Summers to publicly release a transcript of his January remarks. He did so on Thursday, and he apologized in an open letter to the faculty.

``If I could turn back the clock, I would have said and done things very differently,'' Summers says in the letter. ``I deserve much of the criticism that has come my way, but I think the university does not.''

The transcript is from a Jan. 14 conference at Harvard called ``Diversifying the Science & Engineering Workforce.'' More women should be working in those fields, Summers said, and he speculated about why they aren't.

`Intrinsic Aptitude'

``My best guess, to provoke you, of what's behind all of this is that there are issues of intrinsic aptitude,'' Summers said, according to the transcript. ``I would like nothing better than to be proven wrong.''

The former World Bank vice president and 1993 winner of the John Bates Clark Medal as the outstanding American economist under age 40 may seem an unlikely candidate to topple stereotypes of Harvard as an elite powerhouse for the wealthy.

What Harvard presidents say and do matters to more than the school's 300,000 alumni, who live in every U.S. state and in 184 countries. Since 1869, every Harvard president but one has served at least 18 years.

``Anything Larry Summers says as president of Harvard and former treasurer of the U.S. and a distinguished professor is listened to by everybody in education, even when he doesn't want them to listen,'' says Gaston Caperton, 64, president of the College Board, a nonprofit group of more than 4,700 schools.

Largest Endowment

At Harvard, Summers leads an undergraduate population of 6,650, along with 10 graduate schools, including business, law and medicine.

The university's $22.6 billion endowment is larger than the gross domestic product of Costa Rica and almost twice as large as New Haven, Connecticut-based Yale University's endowment, which is the second-biggest in the U.S., at $12.8 billion.

Summers's drive for a more economically diverse student body may lead to the biggest change in Harvard's makeup since 1869, when four-fifths of undergraduates came from Massachusetts and Harvard President Charles Eliot began drawing from all over the U.S., says Harvard historian John Bethell, an author of ``Harvard A to Z'' (Harvard University Press, 2004).

No matter where they come from, Harvard graduates tend to excel. Fifteen chief executive officers of companies included in the Standard & Poor's 500 Index have Harvard degrees, and another 43 studied at Harvard Business School, according to data compiled by Bloomberg.

They include Sumner Redstone of Viacom Inc., the third- largest U.S. media company, and Steve Ballmer of Microsoft Corp., the world's largest software maker.

Postal Worker's Son

The four sitting Supreme Court justices who graduated from Harvard Law School are Stephen Breyer, Anthony Kennedy, Antonin Scalia and David Souter.

``Harvard is one of the great prestigious institutions and a real catalyst for people's lives and careers,'' says Lloyd Blankfein, 50, president of Goldman Sachs Group Inc., the third- biggest U.S. securities firm.

Blankfein, a postal worker's son who grew up in public housing in Brooklyn, says he couldn't have graduated from Harvard in 1975 without financial aid and says he's a big fan of Summers's economic diversity push.

Last year, Summers eliminated parental contributions for students whose families earn less than $40,000 a year, and reduced it for those whose families make $40,000 to $60,000.

In three speeches last year, he decried the growing inequality between rich and poor in higher education.

Immigrants' Children

He said studies showed that at the nation's most selective colleges and universities, 3 percent of students come from families with incomes in the lowest 25 percent and about 75 percent come from families in the top 25 percent.

He said that gap has to narrow.

``It is more urgent than ever before, because one in five American children now has a foreign-born parent, and the children of immigrants are twice as likely to be poor,'' he told the Washington-based American Council on Education in February 2004.

Under Summers's direction, Harvard's admissions staff is recruiting throughout the country for qualified applicants who can't afford Harvard's estimated annual tuition and room-and-board costs of $44,000.

Summers's search for a more diverse student body comes as he's under attack by his own faculty for failing to hire and promote women.

Tenured Women

Summers upset faculty members even before making remarks on the ability of women to succeed in math and science, says Alice Jardine, a professor of romance languages and literature and studies of women, gender and sexuality at Harvard.

``There were already significant numbers of core faculty that were very estranged,'' says Jardine. The proportion of women granted tenure fell to 12 percent of all faculty appointments in the 2003-2004 school year from 26 percent in 2001-2002.

The autocratic approach Summers brought from Washington doesn't work at Harvard, and faculty say the president is dismissive of their views, says Mary Waters, chairwoman of the sociology department.

``Many of the faculty I speak to feel that they are not listened to, that decisions are made without consulting them and that they're afraid to speak out because they're worried about not getting research money or not getting the kinds of resources they need for their departments,'' she says.

Grade Inflation

Summers has apologized five times since the January conference for his comments about women. He's pledged $25 million to find and promote outstanding women and minorities, set up two task forces to find more ways to recruit women in science and engineering and created a senior position in Harvard's administration to advance women within the faculty's ranks.

The former Treasury secretary had become, at age 28, Harvard's youngest-ever tenured professor. He has since been surpassed by a 26-year-old tenured math professor.

Summers started angering faculty almost as soon as he became president. In 2001, he called for an end to what he termed grade inflation because more than half of all grades at Harvard were A's or A-minuses.

Teachers, including West, said students earned those good grades. Summers also ruffled faculty by requesting reasons for the way just about everything at Harvard is done, says Jeremy Knowles, a retired dean of the Faculty of Arts and Sciences.

The only people Summers hasn't offended yet are his closest friends, says West, 51, who left Harvard in 2002.

``There are three words for him: arrogant, bully and pugnacious,'' West says. ``Larry Summers is who he is, a brilliant economist who doesn't belong in the presidency of Harvard.''

Departing Money Manager

Summers must also sort out a developing managerial void in Harvard's $22.6 billion endowment. The endowment has been one of the top performers since Jack Meyer, 59, took over in 1990.

Meyer said in January that he would resign by June to start his own investment firm and take with him four of his top money managers. The endowment had a 21.1 percent return, the best among the 25 largest higher-education funds in 2003-2004, according to Bloomberg data.

Meyer, who runs Harvard Management Co., set Harvard's endowment apart by devising an aggressive, diversified strategy, says John Griswold, 60, executive director of the Wilton, Connecticut-based Research and Education Institute at Common Fund, which manages $30 billion for nonprofit institutions.

Meyer put just 26 percent of Harvard's money into U.S. stocks and bonds. The rest was invested in real estate, foreign equities and timber -- including $600 million for a forest in New Zealand. He also invested in hedge funds, loosely regulated investment pools for wealthy investors that incur higher risk and produce potentially better returns than mutual funds.

`A New Chapter'

As a result, Harvard's endowment skipped the bear market from 2000 to 2003, when the Nasdaq Stock Market lost more than 80 percent of its value. Harvard's endowment fell 2.7 percent in the year ended on June 30, 2001, it lost 0.5 percent in fiscal 2002 and it gained 12.5 percent in fiscal 2003.

Meyer says he's leaving because he wants to go out on his own. ``It's just time for me to start a new chapter,'' he says. He also tired of publicity generated by alumni from the Class of 1969 who complained that the money managers were paid too much, he says. Two were paid $35 million each in 2003.

The alumni said the pay was too high for academia. They want Summers to seek bids from a range of fund managers before Meyer leaves, freeze tuition for two years and bar the former managers from overseeing Harvard's endowment for at least five years.

Response to Alumni

Members of the Class of 1969 with more experience in finance say they're happy with Meyer's work and want him to continue managing Harvard's money, says Paul Zofnass, president of EFCG Inc., a New York-based environmental and engineering consulting company.

``I will be very sorry to see Jack Meyer leave,'' he says. ``He did an absolutely fantastic job of managing the endowment.''

Summers never responded to the alumni. Harvard Treasurer James Rothenberg, 58, did. He sent a letter to 1969 alumnus William Strauss on Feb. 10, saying Harvard is listening to all sides and will make a decision on the management of the endowment before Meyer leaves.

``The endowment support of financial aid and Harvard's academic programs has grown considerably as a result of the very strong results achieved by Harvard Management Co.,'' the letter said.

In January, Summers said he'd serve on a committee that will examine how to manage the endowment, along with Rothenberg and Summers's one-time boss and mentor: former U.S. Treasury Secretary Robert Rubin.

Support From Rubin

Rothenberg is president of Los Angeles-based Capital Research & Management Co., which manages more than $650 billion. He serves as Harvard's treasurer part-time as a volunteer.

``Obviously, we have some important decisions ahead of us,'' Summers says. ``We are very intensely focused on finding the best strategies.''

Summers owes his job in part to Rubin, who championed him as a more aggressive leader after Harvard President Neil Rudenstine, 70, resigned in 2001 after 10 years.

Harvard Corp., the university's executive board, was looking for a creative and bold president, says Hanna Gray, one of the seven members of the corporation. Gray says she supports Summers and his diversity program, and she says he's promoting positive change at Harvard while learning to be more careful in his choice of language.

``If you are not controversial, you aren't doing your job,'' says Gray, 74, who was the University of Chicago's president from 1978 to 1993 and is now a history professor there.

High Marks From Students

``Too many college presidents are bland and too cautious,'' she says. ``I think it is impossible for Larry Summers to be bland. He may be more cautious now.''

On campus, Summers gets mostly high marks from students such as senior Peter Brown, who praises the economist for reaching out to the poor. Brown went with a group of students to Summers's office last year to discuss ways to help low-income students.

Brown, one of seven children of a single mother in Moore, Oklahoma, told Summers that his mother couldn't afford the annual $3,000 parental contribution. Summers later decided to waive all payments from parents who, like Brown's mother, earn less than $40,000 annually.

Summers told 2,000 educators at a College Board conference in Chicago in November that the economics of family income and higher education are hurting the U.S. ``Median family incomes have risen by 18 percent since 1979 while the income of the top 1 percent of families has risen by 200 percent,'' Summers said.

``The least-bright rich kids are as likely to go to college and more likely to go to a good college than the brightest poor kids,'' he said.

`Want to Reciprocate'

Goldman Sachs's Blankfein, who serves on a financial aid committee and has funded several scholarships in his family's name, says alumni know of such discrepancies and want to give back to Harvard.

``A lot are very grateful and want to reciprocate,'' says Blankfein, who cleaned dormitories and served breakfast to earn money while at Harvard -- and last year received $29.5 million in compensation at Goldman.

Summers is counting on alumni loyalty and support as Harvard begins the biggest expansion ever of its campus, across the Charles River and into the neighboring Allston section of Boston, where it owns 341 acres, says Donella Rapier, 47, the university's vice president for alumni affairs and development.

Raising money is critical for Summers as he oversees the first undergraduate curriculum revision in almost 30 years, expands the faculty and encourages students to study abroad.

`Tremendous Vision'

He's also seeking private support for a stem-cell research center Harvard is developing with nearby Massachusetts Institute of Technology in Cambridge, Rapier says. There's no way to know yet whether his recent controversial remarks will affect fund raising, she says.

``Larry is very good at this and has a tremendous vision for the university,'' she says. ``People are very interested in meeting him and hearing his thoughts.''

Last year, 87,000 alumni were among those who gave Harvard $540 million in gifts. In 2003, the last year for which data is available, Harvard led all U.S. colleges in alumni giving, says Ann Kaplan, research director for the Council for Aid to Education, in New York.

Harvard alumni have donated $3 billion in the past 35 years.

Summers, the nephew of two Nobel Prize winners in economics - - Paul Samuelson, in 1970, and Kenneth Arrow, in 1972 -- and the son of two economists, wasn't admitted to Harvard as an undergraduate, according to the book ``Making Harvard Modern: The Rise of America's University'' (Oxford University Press, 2001) by Morton and Phyllis Keller.

MIT Debating Team

Harvard Dean of Admissions William Fitzsimmons says the university doesn't comment on whether someone applied for admission.

As a child in Lower Merion, Pennsylvania, a Philadelphia suburb, Summers questioned authority early and often, his mother, Anita Summers, told Harvard's student newspaper, The Crimson, during a celebration of her son's 50th birthday in November.

``Even when he was three years old, you would say something to him and no matter what, he would respond with `No!' and then he would argue,'' Anita Summers told The Crimson. ``It would drive you crazy, but this was his way of learning.''

After graduating in 1972 from Harriton High School in Lower Merion, skipping 12th grade, Summers entered MIT. He joined the debating team, and as a sophomore, he was a research assistant to Martin Feldstein, who is now a Harvard professor and president of the National Bureau of Economic Research.

`He Cared'

Summers began his career at Harvard as a doctoral student in 1975 and earned his Ph.D. in economics in 1982. A year later, he was made a tenured economics professor.

As a teacher, Summers inspired Sheryl Sandberg, 35, now vice president for global online sales at Internet search engine Google Inc.

She graduated from Harvard in 1991 and later went to work for Summers at the World Bank and then, after earning an MBA from Harvard Business School in 1995, as his chief of staff at the Treasury department.

During Sandberg's junior year, Summers volunteered to be her thesis adviser on the economics of spousal abuse, unusual for someone of Summers's stature, Sandberg says. ``He made time for me, and he cared about the issue,'' she says.

He taught her to create several models of statistical analysis while researching. ``He pushed me to be very rigorous in my approach to the data,'' she says.

At the World Bank, Summers was chief economist for two years. In 1992, he wrote and spoke about the urgency of improving the education of girls and women in developing countries.

Leaked Memo

``The World Bank chief gives one big speech every year, and it's usually on economic policy, and he got up and said girls' education could provide the highest return possible on investment in the developing world,'' Sandberg says. ``That was more than anyone had done.''

In 1991, Summers signed a memo leaked to the press supporting the dumping of toxic waste in third-world countries. The memo said, ``I've always thought that underpopulated countries in Africa are vastly underpolluted.''

Summers said the memo was written by a subordinate, yet he publicly accepted blame for the language.

Early in his Treasury department career, Summers had a habit of rolling his eyes and belittling the arguments of others during meetings, author Paul Blustein writes in ``The Chastening: Inside the Crisis That Rocked the Global Financial System and Humbled the IMF'' (Public Affairs, 2001).

Shirt Untucked

Summers also amused his colleagues by losing his passport, missing planes and showing up late with his shirt untucked, Blustein writes.

His style was a stark contrast with the more-polished Rubin, says Stephanie Flanders, a speechwriter for both men.

``I don't think anyone would deny that Larry learned a lot about diplomacy from Secretary Rubin, but his way of dealing with people is always going to be more down-to-earth,'' says Flanders, 35, now an economics correspondent for BBC television.

``He genuinely wants to bring great things to Harvard, but those who have to deal with him may not be used to how he weighs in and plays devil's advocate,'' she says.

Harvard Corp. anticipated an agenda of change when it unanimously chose Summers, says Knowles, 68, who still teaches chemistry at Harvard. ``He's wonderfully challenging the status quo,'' he says.

``One of the weakest arguments for Larry is, `We've always done it like this,''' Knowles says. ``What he wants is to understand the reasons why we're doing something and to scrutinize the rationale to see if we mightn't do it better.''

`Strong-Willed, Combative'

Summers is the first Jewish president of Harvard, a school that for almost 2 1/2 centuries had few if any Jewish students, according to historian Bethell, 72.

Summers's path to Harvard leadership began after the presidential administration changed from Democratic to Republican in 2001. Rubin championed him as Rudenstine's successor.

Harvard Corp. members knew what they were getting in Summers, Bethell says. ``They thought they needed a strong-willed, combative, very smart guy to spearhead the planning and establishment of the projected Allston campus,'' he says.

Summers has learned from past controversies, says former physics department Chairman Georgi, who collected more than 100 names of professors unhappy with the president's remarks on gender in January.

``If he turns his attention to the real problem of how to develop a culture of full and unbiased evaluation and support, we can make real progress and make something positive out of this sad episode,'' Georgi says.

$500,000 Salary

Summers, a divorced father of three who is paid $500,000 a year, says the new recruitment efforts and Harvard's drive to hire more tenured female professors are related. ``It's about finding the best people,'' Summers says.

Questions about Summers's management style and remarks he wishes he'd never made shouldn't taint his efforts to bring a more diverse student body to Harvard, says Gene Sperling, 46, a senior fellow for economic policy at the Council on Foreign Relations who also contributes to Bloomberg News.

``This is one of the most progressive, far-reaching things anyone at Harvard has ever done, and it will be emblematic of his legacy,'' says Sperling, who met Summers when they worked together on former Massachusetts Governor Michael Dukakis's losing presidential bid in 1988.

``Larry's strength as a leader and a manager far outweigh any mistakes he's made,'' Sperling says.

Princeton, Yale

Leaders of other colleges, including Princeton, the University of Virginia in Charlottesville and the University of North Carolina at Chapel Hill are also easing costs for low-income students.

Yale President Richard Levin announced in February that the university would make grants to undergraduates who are on financial aid to study abroad.

Amherst College President Anthony Marx says he wishes Summers's efforts could be adopted by colleges everywhere. ``What keeps me up at night is the kids that aren't applying who are just as smart but don't feel like schools like Amherst and Harvard are for them,'' says Marx, 45, whose college in Massachusetts is about 90 miles west of Boston.

Early results of Summers's plan are encouraging, says Fitzsimmons, Harvard's admissions dean, who graduated from the school in 1967.

Applications for the class of 2009 are up 15 percent from last year, with a record 22,717 students vying for about 1,650 spots. The increase is a direct result of Harvard's recruiting efforts, Fitzsimmons says.

No Quotas

Financial aid applications from families are up 16.7 percent, an indication that more low-income students are applying, Fitzsimmons says.

Harvard also reports a 45 percent increase in students requesting their application fee be waived, another sign that the university's push is working, he says.

Summers says Harvard has committed $2 million a year for the new financial aid initiative, and he says he has no target figure in mind for the class that was due to be chosen by March 31. ``We don't like to use quotas,'' he says.

About 1,000 undergraduates already qualify, or about 250 in each class, Fitzsimmons says. Seventeen student recruiters have called, written or spoken with almost 12,000 high school students from all 50 states.

Harvard's endowment should enable the college to do even more for low-income students, says Jeffrey Alexander, chairman of the sociology department at Yale and a 1969 Harvard graduate.

Breaking Stereotypes

Summers says he's doing plenty. ``I don't think this will be small in the lives of 1,000 students,'' he says.

Alexander says Summers's economic diversity program may have been prompted by alumni concerns about rising tuition and student debt. ``I'm sure we contributed to this, and we are really happy if we did,'' says Alexander, 57.

Regardless of the dollar amount, students and admissions officers are finding it difficult to break down stereotypes of Harvard.

In the basement of a redbrick, neo-Georgian building in Harvard Square on a January morning, admissions officers Sarah Beasley and Melanie Mueller are asking student recruiters to describe obstacles they've faced.

``When you think of Harvard, what comes to mind?'' Beasley, 26, asks the recruiters, seeking examples from more than six months of visits, calls and college fairs.

`Overwhelmingly Snobbish'

``Overwhelmingly snobbish,'' Sheria Smith, a 21-year-old senior, says. ``You have to be really rich to go there.''

``Cutthroat and competitive,'' Edna Choy, a 19-year-old sophomore, says. ``Nerds. Wealthy students who study 24/7.''

Student recruiters make lists of the schools they plan to visit and describe obstacles they've run into in their efforts to promote a more egalitarian Harvard. ``One student I called, his brother said, `We just can't afford it,' and hung up on me, so I just kept calling back,'' says Emily Haigh, a 22-year-old senior.

Rachel Culley, a 19-year-old sophomore, says many girls were pregnant when she visited a rural high school in her home state of Maine. Most told her they planned to go into the military or work at local companies rather than attend college.

``The students I've been speaking with don't think they can go to a school like Harvard,'' says Culley, who was raised in a home without indoor plumbing or running water. Culley's first culture shock after arriving at Harvard -- on a full scholarship with two part-time jobs -- came when her roommate, who spent about $2,000 a month on designer clothing, wanted to hire a maid.

`The Great Equalizer'

``I have had to learn how to interact with high-income people, and they need to know how to interact with me,'' Culley says.

Summers agrees with Culley. At the College Board conference, Summers said he'd been listening to high school students. He said expensive tuition was slamming the doors of higher education, which educator Horace Mann dubbed ``the great equalizer of all men'' 150 years ago.

Europe has surpassed the U.S. in the number of doctorates that students earn in science, and basic science research in the U.S. has been declining for a decade, Summers said. ``If the United States is to be a major player in the new global world, we must give our students -- all of them -- the best education,'' he said.

Harvard plans to admit its first freshman class eligible for the new aid program in April. ``If two candidates provide equal qualifications and one had little opportunity to have achieved as much, we'd tip in their direction,'' Fitzsimmons says. Fitzsimmons, a native of Weymouth, Massachusetts, says he identifies with such students because he was one himself.

Cleaning Dormitories

When he enrolled at Harvard in 1963, Fitzsimmons's parents couldn't afford the tuition, so he worked his way through by cleaning dormitories and offices and developed a relationship with a financial aid officer to whom he turned for help several times in his four years at the school.

Rothenberg, Harvard's treasurer, says the school will find ways to admit even more students who can't afford the fees in the years to come. And if that means it will become harder for those who can pay to get in, so be it, he says.

``Over the years, we'll find ways to balance it all out,'' he says.

Eliot, the president of Harvard from 1869 to 1909, made enemies when he recruited students from across the U.S. instead of only in Massachusetts. Eliot once said the chief qualification of a Harvard president ``is the capacity to inflict pain.''

Knowles says he suspects Summers is among the presidents who have taken heart from those words, along with a speech by Harvard President Edward Holyoke in 1769: ``If any man wishes to be humbled and mortified, let him become president of Harvard College.''

``Humbled, yes,'' Summers said in his inaugural message in 2001, defining what may be an open question for years to come. ``Mortified, I hope not.''

To contact the reporters on this story: Liz Willen in New York at at ewillen@bloomberg.net; Brian K. Sullivan in Boston at bsullivan10@bloomberg.net

Last Updated: February 22, 2005 00:12 EST