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Stanford Makes History: Free Tuition February 20, 2008

Posted by davidzweig in Uncategorized.
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Stanford’s decision to offer free tuition to students whose families earn less than $100,000 and free tuition, room and board to families that earn less than $60,000 is at once a spectacular act of generosity and wisdom, and an acknowledgment of the stress of belonging to what we used to call the Middle Class in the U.S.

Whither has all that wealth gone?

Other nations invest in advanced education much more than does the U.S., as a matter of national priority. America has made other choices. Business complains about the quality of the education of its workforce, the sorry state of science in the U.S., and the difficulty of hiring Americans for certain positions; students complain about the need to assume a heavy mantle of penury from student loans.

From a systems perspective, this cycle has no winners. Perhaps it’s time for a change. Stanford has led the way.

From the Silicon Valley Journal:

Stanford University on Wednesday 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.

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.

Update: Brown has joined Stanford in extending such benefits to the middle class. Who’s next in the pool?

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