The University of Pennsylvania yesterday joined Harvard and other elite private colleges in announcing loan-free financial-aid packages aimed at middle- and upper-middle-class students.

All financially eligible undergraduates will receive grants instead of loans beginning in fall 2009, Penn officials said.

"Our aim is to send a signal out to every family who would not otherwise believe they could afford our tuition and fees that we're affordable to students from every economic background," Penn President Amy Gutmann said.

Penn costs about $46,000 a year for tuition and for room and board. The school must continue charging such fees to those who can afford it in order to offer financial aid to less affluent students, Gutmann said.

Penn will phase in the changes starting in September by eliminating loans for students with family incomes under $100,000. At the same time, it will reduce need-based loans by 10 percent for students whose families make more than $100,000.

Harvard and Swarthmore announced similar policies this month.

When fully implemented in 2009, Penn's initiative will affect about 2,600 students and cost the school an extra $12.5 million a year, officials said.

Penn already covers tuition and room and board for students whose families make $60,000 or less per year. *