Stanford closing the fin aid gap for undergraduates
Got this in the mail today from Stanford Alumni. $114 million for undergraduates!
STANFORD ANNOUNCES FINANCIAL AID ENHANCEMENTS
Stanford University today announced the largest increase in its history for its financial aid program for undergraduates.
Under the new program, parents with incomes of less than $100,000 will no longer pay tuition. Parents with incomes of less than $60,000 will not be expected to pay tuition or contribute to the costs of room, board and other expenses.
The program also eliminates the need for student loans.
Other significant enhancements have been made to the program that will benefit aid recipients at all levels of income.
“This is the third consecutive year we have allocated substantially more money to financial aid for lower- and middle-income families,” said Stanford University President John Hennessy. “We are committed to ensuring that Stanford asks parents and students to contribute only what they can afford for an education we believe is among the absolute best in the world. By devoting more resources to financial aid, we seek to underscore what has long been the case-that no high school senior should rule out applying to Stanford because of cost. We understand how families face serious financial pressures, and we are doing all we can to assist them.”
These changes bring Stanford’s undergraduate financial aid program for the 2008-09 academic year to more than $114 million, making it one of the largest programs in the nation. The amount spent on financial aid next year is projected to equal half the total undergraduate tuition revenue Stanford expects to collect for the year.
To help pay for the enhanced aid program, the university increased its endowment payout last year to 5.5 percent. It also plans to double the financial aid goal of The Stanford Challenge, its current fundraising campaign, to $200 million.
“Although Stanford’s tuition has gone up over the past five years, thanks to our increasingly generous financial aid program, families with incomes less than $150,000 will find a Stanford education much more affordable than it was five years ago,” Stanford University Provost John Etchemendy said. “For most of these students, attending Stanford will cost less than most private and many public universities.”
Three out of every four Stanford undergraduates currently receive some form of financial aid. When the new financial aid program is taken into account, the average family contribution for students receiving financial aid in 2008 will be reduced by 16 percent this year.
Financial aid needs analysis is a complicated process taking into account income, assets and family situation, including the number of other children in college. The following hypothetical examples help illustrate the impact of some of the changes in the enhanced program. In each of these instances none of the families have assets of more than $20,000 beyond their homes.
A family of four in Massachusetts: This family has one child at Stanford, a 15-year-old in high school, a father who works as a teacher and a mother as a freelance graphic designer. The parents have a total income of $54,600, and have home equity of $275,000. The new financial aid program would eliminate the $3,800 that the parents would have been expected to pay in the current school year. Their son would no longer need to borrow $2,000, though he would still be expected to contribute his earnings from work during the summer and academic year. The total scholarship would be $45,550, an increase of $5,250 from this year.
A family of six in Nebraska: This family has one child at Stanford and three others under the age of 12. The mother is a homemaker, the father an engineer, and they have a total income of $80,000 and home equity of $155,000. The new plan would cut the parents’ payment in half, reducing their total payment to $5,450 from $10,965. Their child at Stanford would no longer need to borrow $1,600, though still is expected to contribute earnings from school year and summer jobs. The total scholarship would be increased by $7,100 to $40,050.
A family of three in Silicon Valley: This family has one child at Stanford. The father is a software executive and the mother works as a receptionist. The parents would be asked to draw less from their annual income of $120,000 total and home equity of $560,000. Their parental contribution would decrease by one-third-$8,180-to $16,135 from $24,315. Their daughter would no longer need to borrow $1,600, but would be asked to contribute the amount equal to the earnings from part-time work during the school year and a full-time summer job. The total scholarship would be $29,400, nearly $10,000 more than the previous year.
Stanford remains one of the few private universities with a “need-blind” admission policy for U.S. citizens and permanent residents, which guarantees that students will be accepted to the university regardless of their ability to pay-and be offered the financial support they need to attend Stanford.
The $100,000 level is fairly significant, considering that the median income for the average American family is $48,201 (2006 figure). Financial aid in many other private universities that perform means testing usually cater for only the poorer strata of the society.
One reason is probably the extra funds raised recently. Bloomberg reports that Stanford received a total of $832.4 million, beating Harvard University’s $614 million.
Nevertheless, the announcement didn’t mention much about international students, at least not in the examples, which is expected. I guess international students will still have to fight their way through other means of securing an appropriate source of funding.
Time to start businesses on campus 😉 lots of extra cash to be raked.
