Stanford University announced major improvements to its financial aid packages last week, specifically targeting middle-income families, but Yale administrators said Stanford is still playing catch-up with most of its Ivy League rivals.
Stanford pledged an additional $5 million to lessen the parental contributions and required student loans for undergraduates coming from households with a combined income between $60,000 and $135,000. But the parental contribution change — which comes on the heels of several years of financial aid reform among top-tier schools in an effort to maintain competitiveness — is still less generous than Yale’s aid platform, Yale’s Director of Financial Aid Caesar Storlazzi said. Other Ivies, including Princeton and Harvard Universities, also have comparable or superior arrangements.
The impetus behind Stanford’s focus on middle-income families stems from national data indicating such students — who are less likely to receive financial aid, but may not be able to afford the full tuition and fees for a private university — are increasingly applying to less-expensive schools. The week before its financial aid announcement, Stanford increased its tuition by over $2,000.
Stanford is lowering the required parental contribution by reducing the amount of home equity considered in its financial aid calculation. It will cap the amount of equity considered in the formula at 1.5 times the family income, a move that will reduce parent contributions for middle-income families by an average of $2,000.
But members of the 568 Presidents’ Group, a national association of colleges and universities working to find common methods of awarding need-based financial aid, have already agreed to cap home equity consideration at 1.2 times family income, thereby reducing the parent contribution even further. Ivy League members of the 568 Group are Yale, Brown, Columbia, Cornell, Dartmouth and the University of Pennsylvania.
“That’s not to say that what Stanford is doing for their own population isn’t generous, and they are improving financial aid at Stanford for Stanford families,” Storlazzi said. “But in comparison to what Yale is already doing, it’s not better — Yale is already slightly more generous than Stanford has now become.”
Two years ago, Yale eliminated the parental contribution for students from families earning under $45,000 and reduced it for families earning between $45,000 and $60,000 per year. Stanford has a similar policy. Last March, Harvard announced it would eliminate the parental contribution for students from families with annual incomes below $60,000 and reduce the parental contribution for students from families earning between $60,000 and $80,000 a year.
Princeton has been operating under a grant-based aid policy since 2001, when the university eliminated the parental contribution requirement for low-income families and ended compulsory student loans, said Robin Moscato, Princeton’s director of undergraduate financial aid.
“Princeton has excluded home equity for all aid applicants since 2001,” she said. “In a sense, we’ve been out in front with this policy for the last five years. It’s very much a way to improve the financial program specifically for middle-income families.”
This month, Stanford also reduced the amount its students are expected to borrow during the school year from $3,500 to $2,000. But Storlazzi said the loan segment of a student’s self-help contribution at Stanford is accompanied by an expected income contribution. This component was not mentioned in Stanford’s recent intiatives, he said, making it seem that Stanford requires less self-help than Yale does. Stanford’s work requirements are higher than Yale’s — Stanford students contribute $5,500 as opposed to Yale’s required $4,400 — so even after loan reduction, its students contribute just $400 less than Yale students on financial aid.
Yale students said they appreciate the attention that Stanford gave to middle-income families, as opposed to focusing solely on low-income student aid initiatives.
Troy Schuler ’09, a member of the Undergraduate Organizing Committee, said he and the other members support aid reform that acknowledges the difficulty middle-income families often have in meeting the costs of elite institutions.
“We’ve always wanted the administration to look at financial aid on a case-by-case basis, so we think this is great with what Stanford’s doing,” he said. “With property values rising, there’s a greater burden on middle-income families and a greater disparity. That has always been part of the [UOC’s] platform, in looking to individual families’ needs.”
In looking to what Yale can do to further improve its financial aid program, Schuler said the UOC’s platform advocates reducing the student contribution so that students are required to work fewer hours, which the Committee believes negatively affects students’ college experiences. In addition, he said, the UOC is lobbying Yale to match Harvard’s financial aid reforms of last spring.
Schuler said he hopes Yale will continue to improve its financial aid policy to allow its undergraduates to take advantage of everything the University has to offer in terms of academics and extracurricular activities.
“The dialogue [between the administration and students about aid reform] needs to go more in terms of what provides the best student life here,” he said.
In the 2005-’06 school year, over 41 percent of Yale undergraduates received need-based financial aid from the University.