Today, Stanford University announced that it would go tuition free for students from families who make less than $125,000 USD a year. The real win in this announcement is that Stanford will additionally cover a student’s room and board if their family makes less than $65,000 a year.
This announcement increases the qualifying familial income for Stanford’s free tuition financial aid program from the previous limit of $100,000 a year.
This is crucial to enable a wide range of students to attend one of the best Universities in the United States. Stanford charges over $43,000 USD a year for tuition. With room, board and extra expenses it equals over$60,000 dollars a year for one person to attend the school.
Considering that last year, the typical US family income was $53,657 and that this amount has been declining over the past three years, it is about time that all institutes of higher education start expanding their financial aid policies.
Additionally, student loan debt has reached an all time high. Last year the average student graduate from the class of 2015 left their university with$35,051 in student debt. Today, there are over 40 million Americans who have student loans, about 70% of these loans were accrued during bachelor degrees.The total monetary amount of student loan debt in the US is $1.2 trilliondollars and, according to the White House, is debilitating the United States economy.
It is hard to get out of parent’s basement (or for your parents to own a basement) when you have to pay over $200,000 for a four-year undergraduate degree.
There are so-called bargains for institutes of higher learning. Students that choose to go to certain universities in-state and get a lowered tuition rate than those applying from out of state. Or in some instances a state’s lottery may generate funds to help pay student’s university fees.
Georgia, for example, has something called the HOPE scholarship that is funded entirely by the Georgia Lottery for Education, and has raised more than$6.4 billion US dollars in funds for more than 1.5 million students attending Georgia’s colleges, universities and technical colleges.
Did you know the recent Powerball lottery generated over $26 mill for the Georgia Lottery-funded Pre-K and HOPE Scholarships?#educationwin— Georgia ONmyLINE (@USGGOML) January 14, 2016
Private institutions, like Stanford, are a bit different with their fees and financial aid packaging. They do reward scholarships, but they are dictated by the school. These places do not offer preferential treatment to students who happen to be in the same state as the institution.
Some private schools do get it right, Columbia, Harvard and Dartmouth are three of the 62 colleges and universities that can claim that they meet 100 percent of their undergraduate students demonstrated financial needs. At these schools that basically means if the numbers show that your family falls under a certain income level, you can apply for certain loans, scholarships and/or can apply to work part or full time while enrolled in school.
However, not all schools can afford to be so generous. The recession in 2008 spelled the end for generous financing at many institutes of higher education, who to offset costs (beacuse of shrinking returns from endowment investments and alumni giving) had to dramatically cut their budgets, eliminate scholarships and up their tuition. Additionally, while school fees are rising, the cost of providing a good, comprehensive education is also rising. Not all institutes of higher learning have an endowment like Harvard’s that’s bigger than half of the world’s economies.
Harvard has a $36 billion endowment. Some alumni think the school should scrap tuition fees... https://t.co/XDJyLHmzU4— Capital Oversight (@CapOversight) April 10, 2016
Also, most students who have a financial aid package to help them pay for school must work for their money-and that doesn't mean studying extra hard. Work study, or work done for the school, can range from working as a research assistant or stacking books in the library. For students who qualify for Stanford’s new financial aid policies they must pay $5,000 USD from summer earnings and work part time while in school.
For most people, (myself included) attending college had a lot to do with the financial aid and scholarship package that came with their acceptance letter. Education is seen as a must, and a gateway to a better job and life. It is often referred to as the great leveler because of its merit based system. But this is starting to seem like a pipe dream with the increased cost in higher education. Since 1985, the price for education has risen nearly 500% while the inflated family income has only increased by 147%.
"Cost of attending a four-year college has increased by 1,122 percent since 1978." https://t.co/gS6L1mb3lj— Jeff Moen (@_metafizik) April 17, 2016
Universities who donot accommodate all students financial aid needs should follow Stanford’s example, or find a creative way to make education more affordable to their students like Georgia does. Higher education is still a game changer, and for many students they are the first in their families to go. It is time the US as a country start watching out for those who are deemed vulnerable by economic means but trailblazers in every other sense of the word. The US Higher Education system needs a financial policy makeover.