Thursday, March 16, 2006

"bold" move by stanford...what's next?

Since I do sometimes take work time to make quick posts about non-work-related issues, thought I'd discuss something professionally related...

Seems that Stanford University has decided to not charge tuition to students from families with income less than $45,000, and to reduce the family contribution for students in the $45K-60K range. Tuition at Stanford is almost $33,000, and total cost of attendance is about $47,000, counting room, board, books and other expenses. Low-income students will still be required to pay room and board and their own personal expenses. The move eliminates the up-to $2,600 contribution that low-income families were expected to pay towards tuition and reduces by half the average $3,800 contribution from the next income bracket.

The new policy is designed to broaden the economic diversity mix of Stanford's undergrad population, hopefully by encouraging low-income but talented students to apply, where the fear is now they are scared away by the high cost of attendance. It's the next big move in a series of events that began in the late 1990s when Princeton changed its approach to aid, replacing loans with grants for middle-income students. Since then many expensive colleges and universities have followed suit, hoping to quell the criticism they get for tuition increases that have far outstripped the rate of inflation.

In the end, this move by Stanford is a very inexpensive statement -- first it's expected to cost them no more than $3 million a year, chump change considering that they sit on an endowment valued at $12.2 billion (yes, billion). As former Stanford President Donald Kennedy noted a while back, it's "unenviable" to look so rich yet always be begging for money in major fundraising campaigns. Second, they most likely won't be admitting more new freshman than the roughly 2,900 they take in each year, nor will they be lowering admissions standards to any significant degree -- it will still be a very competitive admit pool. This move may spur an increase in applications and enrollments from very talented lower income students, maybe not. It will certainly make them more competitive in the race to enroll more low-income underrepresented minority students.

The key question is of course, will anyone follow suit? Harvard's endowment is twice that of Stanford's. In 1997, Time reporter Erik Larson asked why the University of Pennsylvania couldn't provide free tuition with an endowment valued then at over $1 billion. This is a fair question, which has underneath it the basic question of whether higher education is a right or a privilege.

Related to all this, the folks at The Institute for College Access and Success have a database available that contains information on loan usage across campuses. Worth a look if you're interested in the issue.

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