Many facets of Stanford’s early history make me proud to be the University’s president. One of the most inspirational is the Stanfords’ commitment that deserving students should have access to a University education regardless of their ability to pay.
In Jane Stanford’s own words, the University ought to “resist the tendency to the stratification of society, by keeping open an avenue whereby the deserving and exceptional may rise through their own efforts from the lowest to the highest station of life.” My predecessor, Gerhard Casper, once said that disregarding Jane Stanford’s intention to curb society’s “tendency toward stratification” would be “tantamount to betrayal of the University’s founders.”
This notion of broad access to higher education was somewhat radical for its time among private universities. In the intervening decades, public universities have been the primary implementers of broad access. In recent years, however, reductions in state funding and the increased costs of sustaining a first-rate university in a competitive market have greatly strained the resources of the country’s best public universities. Rising fees, often accompanied by a growth in student debt, now threaten this historic commitment to broad access.
Private institutions also have found it increasingly difficult to keep the commitment to admit students regardless of their ability to pay. Because of dramatic differences in size—three-quarters of all college students enroll in public institutions, according to recent statistics—private institutions cannot realistically adopt the role that public institutions have historically played. It will require the vision and commitment of our nation’s leaders to ensure that our public universities can continue to provide an affordable education to the growing population of qualified students.
Today, Stanford is one of only a few dozen schools that is “need blind,” meaning that U.S. citizens and permanent residents are admitted without regard to their ability to pay. We continue, however, to look for ways to improve accessibility through our financial aid program. Several recent improvements were driven by data showing that qualified students from low- and middle-income backgrounds in some cases perceive Stanford’s “sticker price” to be beyond their means without a full understanding of the financial assistance available. In other instances, they are struggling to meet the real financial commitment of a University education.
Last year, the University reached out to low-income families by eliminating parent contributions for families whose annual income falls below $45,000 and by cutting parent contributions in half for families earning $45,000 to $60,000.
Earlier this year, we announced that, while fees will increase 5.2 percent next year, the institutional need-based scholarship funding would increase by 15.2 percent. Next year, the University will dispense $76 million in undergraduate financial aid over and above federal and other external grants and loans, compared with $66 million this year.
Much of the additional aid is earmarked for middle-income families and will be used to reduce the sum parents are expected to contribute. It also will reduce the amount students are expected to borrow during the school year from $3,500 to $2,000.
Our financial aid office provided this example: Consider a family of four from California with an annual income of $103,000. They purchased their home 15 years ago and have accumulated $480,000 in equity. Under the old policies, on an annual basis, the parents would have been expected to contribute more than $25,000, and the student would have been expected to borrow $3,500. A scholarship would have been granted to make up the shortfall. When the new policies are fully implemented next fall, the expected parent contribution will be reduced to $22,000 annually, and the amount the student is expected to borrow will be reduced to $2,000 annually. That means, over the course of four years, the expected contribution of the student and his or her family will drop by more than $18,000, and the student’s scholarship will be increased to make up the difference.
These enhancements build on an already strong financial aid program. The average debt of members of Stanford’s Class of 2006 was $15,758. That is much lower than the average for private institutions—which is closer to $19,000—as reported recently by the College Board. Once the new programs are fully in place, that number will be reduced by approximately $6,000. The success of our Campaign for Undergraduate Education, which raised $300 million for undergraduate financial aid, combined with the outstanding returns on our endowment during the past five years, have made these important improvements possible.
I close this column with a thought that recurs to me every year as we send out acceptances to our new prospective freshmen: it is the generosity of our alumni who benefited from their Stanford education, often decades earlier, that enables our University to offer this opportunity to the most deserving students of today.
