Undergraduates with family income below $200k will be tuition-free at MIT

This is a great step in the right direction. I can't speak directly for MIT, but there are issues with how these programs don't apply to parents with small family businesses. My parents had a small business, with my father taking home a salary of $XX,XXX. Duke University used the business assets to determine the EFC (expected family contribution) of literally 90% of the salary. Essentially saying to sell off the family business for the college fund, which was a non-starter.

Small businesses are allegedly the backbone of America, and I feel these tuition support programs overlook this segment of the middle-class.

I can understand why they might do this. Many people who own a small business underpay themselves significantly and use the extra funds on the business to build up assets. This defers taxes and allows the funds to be reinvested without tax. They might even take out loans on those business assets. The same way the wealthy will pay themselves a tiny salary and just live off the asset value of their stock. Someone who owns their own business could also easily drop their salary significantly for the year prior to applying to college.

As an owner of a small family business, I have to pay close attention to making sure my salary and that of my other family members involved is "generally commensurate with our duties" or the IRS will be up my backside pretty quick. I obviously try to minimize it as much as possible, but if you drop it to something insignificant and the IRS notices, they'll adjust your income and expenses reported to reflect your non-compliance with tax code.

From what I've observed (worked at a few small businesses before I got an office IT job, and even then...) it's about figuring out enough 'fringe benefits' and/or 'explanations' that are plausible with your CPA. e.x. how many profitable company car buy/leases can you do, a good explanation of why you are saving that money as a small or privately owned company (i.e. saving for expansion via acquisition/etc, but you have to follow through and then sell the results ASAP)

You can't have it be 'insignificant' salary but you can do plenty of fringe benefits or long term profiteering via acquisition as mentioned.

I will say, ironically, the small business owners like that were great to work for, although they were paranoid, they were often generous to employees.

OTOH, at the computer shop there was a standing rule that if the CPA brought his computer in it was 100% priority and we treated him better than the one org that was 10-30% (depending on year) of our entire gross income...

EDIT: To be clear, it's complicated, https://news.ycombinator.com/item?id=42199534 is a good explanation of where I sit overall.

CPA is not a great TLA as isn't global.