Feb. 23 (Bloomberg) -- Brown University is eliminating tuition for students whose parents earn less than $60,000 following decisions by fellow Ivy League universities to boost financial aid as their endowments grow.

The Providence, Rhode Island, institution said it also plans to substitute grants for student loans in the financial aid packages of students whose families earn less than $100,000 a year. The new program cuts reliance on loans for all students regardless of family income, the University said in a statement posted on its Web site.

Brown also announced plans to increase tuition by 3.9 percent for the 2008-2009 academic year to $36,928. With room and board the costs increase to $47,740 for one year.

``Since 2001, Brown has made financial aid for our students one of our highest priorities,'' said Brown President Ruth Simmons in the statement. ``Today, we take another major step forward to ensure that our nation's best students from lower-and middle-income families can attend Brown and graduate without the enormous burden of college debt.''

Brown's announcement follows similar moves by Harvard, Yale and Stanford universities to waive tuition for lower-income students and cut students' debt burden. The schools have been under pressure from lawmakers including Iowa Senator Charles Grassley to use more of their endowment money for financial aid or risk being slapped with mandatory payout requirements.

Stanford this week announced that it, like Harvard and Yale University, was eliminating tuition for students from families earning less than $100,000 and that families earning $60,000 or less wouldn't have to pay any costs at all. Stanford also substituted grants for student loans.

Brown will raise spending on student aid to $68.5 million from $57 million. To pay for the increase, the school will increase the payout limit from its endowment to 5.89 percent from its earlier limit of 5.5 percent of the average value of the endowment over the previous three years.

---With reporting in Boston by Matthew Keenan Editors: Ann Hughey, Christopher Wellisz

To contact the reporter on this story: Alison Fitzgerald in Washington at afitzgerald2@bloomberg.net

Last Updated: February 23, 2008 17:05 EST