- Stanford University will provide free tuition to parents of students who earn less than $125,000 per year — and if they make less than $65,000, they won’t have to contribute to room and board costs either.
- Students are still expected to pay $5,000 toward college costs from summer earnings and working part-time while enrolled in college.
- The announcement is an expansion of Stanford’s old financial aid policy, which previously applied to students from families making less than $100,000 per year.
- Most universities can’t afford to offer such generous financial aid to their students. But they could draw a lesson from the plan’s simplicity.
How Stanford’s financial aid works
If a student’s parents make less than $125,000 per year, and if they have assets of less than $300,000, excluding retirement accounts, the parents won’t be expected to pay anything toward their children’s Stanford tuition. Families with incomes lower than $65,000 won’t have to contribute to room and board, either.
Students themselves will have to pay up to $5,000 each year from summer earnings, savings, and part-time work. There’s no rule that parents can’t cover their students’ required contribution.
Stanford is much more generous toward middle-class and upper-middle class students than the federal government is. Most students who get subsidized loans and federal Pell Grants come from families making less than $60,000 per year. But it also enrolls an outsize proportion of wealthy students. In 2010, the university’s director of financial aid said the median family income at Stanford was around $125,000.
On the other hand, only 14 percent of entering freshmen got federal Pell Grants in 2012, which typically go to students from families making less than $50,000 per year. Nationally, 41 percent of undergrads received Pell Grants.
Stanford isn’t the only elite school to offer such financial aid packages.
At Harvard, parents making less than $65,000 are not expected to contribute. Families making between $65,000 and $150,000 contribute from 0-10% of their income.
Like Harvard and Stanford, Yale parents making less than $65,000 do not have to contribute to tuition. Beyond that, Yale subtracts a family contribution from the cost of tuition, room and board, books and personal expenses, and will meet 100% of demonstrated financial need.
At Princeton, parents making less than $120,000 do not pay tuition. Those making less than $60,000 are covered for tuition, room and board. Those making between $60,000 and $120,000 only pay a percentage of room and board. The percentage is higher for those whose income is lower.