Stanford University today 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.
When I was at business school I heard former Stanford president Donald Kennedy speak on the need for those of us “best and brightest” to go into public service. I talked to Mr. Kennedy after his talk about the financial realities of this. When I got out of undergrad my school loan payments were as high as my rent. There is no way I could afford to take a job that didn’t pay much. In fact, my observation was that the only people who could afford to work for non-profits were those with trust funds, or those who had gone to a state school and weren’t loaded down by debt.
I didn’t pay off my combined business school and undergrad loans until I was in my mid-thirties, and then I celebrated by throwing a “zero net worth” party.
As an alumn, I’m tired of having my donations to the school go to maintaining more and bigger buildings. Stanford has a huge endowment, one of the largest in the country. There is no excuse to saddle their students with huge debt burdens that take decades to pay off and limit career choices.
Thanks to similar announcements by top tier East Coast schools, Stanford has been compelled to offer more aggressive financial aid, just to stay competitive.
All I can say is that it is about time.