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Financial Aid – Premier Schools

Stanford’s announcement came two months after Harvard publicized its expensive new financial aid policies and over a month after Yale and Dartmouth followed suit with their own. Since Harvard’s announcement in December (at which time it saw its application rate spike by 19 percent), other top ranked schools including Williams, Princeton, Swarthmore, Cornell, Northwestern, University of Pennsylvania, Bowdoin, Pomona, Cal Tech, Duke and Davidson have announced new financial aid policies in what some people consider an effort to “keep up with the Harvard’s.”

Similar to Harvard and many other elite universities, on February 20, Stanford University announced a new financial aid policy dramatically increasing the eligible amount of aid for middle-income families. The announcement comes as the latest in a series of policy revisions over the past three years designed to ease the burden of paying a tuition averaging $47,000 a year and to ensure that no high school student considering applying to Stanford decides not to because of cost.

In addition, the plan also calls for eliminating student loans. All students qualifying for need-based financial aid no longer need to take out the expected $4,000 loan before receiving money from the scholarship fund. Beginning in the 2008-09 school year, students are only expected to earn $2,500 from working during the school year and earn approximately $2,000 over the summer.

Each fall, the financial aid program is reevaluated by the Financial Aid Office, the Dean of Admission and Financial Aid, the Budget Office, the Provost, and the President, with consultation from the Board of Trustees. Cooper added, “There are no specific plans in the works for more changes at this time. We will be evaluating the success of our current changes next fall.”

The changes were made possible through an increase in the endowment payout and doubling the financial goal of the Stanford Challenge, an effort to increase fundraising for the university, to $200 million. The Board of Trustees approved the increase in endowment payout from 5% to 5.5%, or by $160 million, on June 14, 2007, at the time intending to fund capital improvement projects.

The announcement follows the House of Representative’s passing of the College Opportunity and Affordability Act, which aims to expose the allegedly corrupt relationship between expensive colleges and loan agencies and give greater transparency to the consumer. The Senate has put forth its own version of the bill. If passed, the law would require colleges to report financial information that Stanford University officials claim to be unproductive and difficult, namely revealing the rate of their endowment spending.

Many people believe Stanford’s increase in endowment spending on financial aid from five to 5.5 percent this year is aimed to counteract the repealed provision of the College Opportunity and Affordability Act that would have required colleges to spend at least five percent of their endowment on financial aid. But the Board of Trustees approved the increase in endowment payout in June, nearly five months before the act’s proposal. As far back as 2003, Republicans had been discussing a bill that would penalize colleges that raised tuition significantly faster than inflation.

These policy revisions have also coincided with and followed those of other top ranked schools. In 2006, Stanford eliminated educational costs for families earning less than $45,000. Harvard had enacted a similar policy in 2004 and Yale in 2005.

Sunday, March 29th, 2009, by Gem and is filed under "Graduate, Undergraduate, colleges, financial aid, harvard, loans, money, pay, policy, scholarships, schools, stanford, student, tuition, universities ". Both comments and pings are currently closed.