Parents with annual family incomes below $125,000 will pay no tuition

http://news.stanford.edu/news/2015/march/new-admits-finaid-032715.html

by Link- • 11 years ago

597 271 11 years ago

news.stanford.edu

jgalt212• 11 years ago

This is, of course, good news for many families of current and/future Stanford students. That being said, the upper middle class continues to get screwed in this country. UMC produces most of the GNP, and pays most of the taxes (sorry no carried interest tax loopholes available to those who draw salaries), and then we still have to pay these crazy tuition fees.

The oligarchs, of course, don't care who much college costs be it 0$K, $100K or $200K year. Any at cost basis, it just doesn't make a dent in their wallet.

Down with the oligarchs!

jsprogrammer4• 11 years ago

The poor upper middle class. Always getting screwed.

ausjke• 11 years ago

The UMC is also the most hard-working class, who is carefully taking responsibilities for their families etc. And guess what, it's the most exploited/punished/screwed class by either tax system or zero-tuition policy like this.

it looks like getting divorced, or one couple quitting job before kids are going to apply for college, or having unlimited kids, are the right strategies for the best colleges application than otherwise. I actually know one family did just that, the college-educated mid-age mom quit her job so her daughter got all the financial support from Harvard, and she is walking her dog on the community daily to stay fit now(instead of working). I am not sure if she will be back to work after 4 years when her kid graduates.

Basically, the more screwed your (family) situation is, the more helps are there for you for free, even for the most prestigious universities admission! only the sky is the limit.

claar• 11 years ago

Yeah, I feel pretty bad for the top 13% wage earners in the US (http://www.nytimes.com/interactive/2012/01/15/business/one-p...). They really have it rough.

bdcravens2• 11 years ago

There has to be a cut-off somewhere. Too many hand-outs would destroy the values that enables a person to get to be upper middle class.

harryh12• 11 years ago

I challenge you to provide evidence supporting your "most of the taxes" claim.

BrandonMarc• 11 years ago

Try this, for 2011 numbers:

http://www.heritage.org/federalbudget/top10-percent-income-e...

This chart summarizes decades of numbers pretty well:

http://static4.businessinsider.com/image/5033e3e3ecad0494170...

... it's from this article, which gives lots more detail:

http://www.businessinsider.com/who-pays-taxes-2012-8?op=1

stephencanon2• 11 years ago

Any lower-class parent would be delighted to have the money to contribute to their child's education. Stop worrying that someone else might be getting a better deal than you are and be happy you can afford it. Why does it upset that someone else is getting help? Be happy for them and be glad you don't need it, and get on with your life.

suyash• 11 years ago

This is interesting, I wonder what does it mean for international students? $125K in family income for students from developing countries, will probably cover most of the students.

seanmcdirmid• 11 years ago

It is ambiguous, but:

Stanford has long been committed to need-blind admissions for U.S. students, supported by a financial aid program that meets the demonstrated financial need of all admitted undergraduate students.

reubenmorais• 11 years ago

It'd definitely cover all of the international students from developing countries, but I don't think they're included in this policy. IIRC Stanford only does need-blind admission for US students. $125K/yr is an order of magnitude more than upper middle class families in Latin America make, for example.

I looked into going to a US university when I was finishing high school in Brazil but the reality is that even with aid packages and all of the assistance you can get, the process involves a significant chunk of money being spent on paperwork (official translations of dozens and dozens of documents are expensive, US visas are expensive, intl travel is expensive, the standardized English exam is expensive, etc.).

A free ride to Stanford for me when I was going into college 3 years ago would have put my family in debt. Today I know that I could've remedied that with a single internship in the US, but back then all of the costs intimidated me and I gave up.

eitally• 11 years ago

I just relocated one of my managers from Campinas to Huntsville and I think he paid about $4000 for official translations. I couldn't believe it. The company paid, but even so -- that's insane. And apparently there are different levels of translation, ranging up to about $75/pp.

inthewoods3• 11 years ago

This is a good start. Just my opinion, but I think Harvard should be considered a for-profit company unless all students go free.

fastball• 11 years ago

If all students were free they would be cashflow negative which is worse than non-profit?

inthewoods3• 11 years ago

That assumes no other source of revenue - the endowment generates about $5b a year.

jtfairbank• 11 years ago

That's not the definition of non-profit. Non-profit companies charge for products all the time, the only requirement is that they reinvest any profits back into their mission instead of distributing it to shareholders.

That's why you get non-profits with million dollar CEO salaries- its they only way to funnel money out.

bdcravens2• 11 years ago

I'm sure zero revenue would result in excellent education.

inthewoods3• 11 years ago

Who said they have zero revenue? The Harvard endowment is about $36b - generating about $5b in revenue for the University.

tux• 11 years ago

Looks like Standford is learned something :-) Not everyone that can afford to pay is smarter then the one who can't. Students should be accepted upon knowledge and skills and not there financial situation. I vote for free education!

Futurebot2• 11 years ago

This is a great step. I wonder if there are any plans to expand this to would-be adult learners. That would be amazing. If other top universities follow suit (I'd love to see this at NYU and Columbia, personally), that'd be even better. Not going to solve the student loan crisis, but it'll certainly help a bit. Encouraging to see this.

Another thing I like about this is the "only contribute $5000 a year" part (especially if it does expand to adults) - that means if you've built a small personal safety net, you won't have to watch it all go up in smoke instantly. That adds a margin of safety you don't get right now.

acadien2• 11 years ago

Why not just make it a graduated tuition based on parental income?

EduardoBautista• 11 years ago

What things like FAFSA and even what Stanford is doing never consider is whether or not the parents are even going to help pay at all.

acadien2• 11 years ago

Yes, I remember friends having that problem in undergrad in Canada. There was a way around it but it was an application process with an interview. I believe they were concerned with people trying to game the system to get lower tuition fees.

levosmetalo• 11 years ago

In some, especially Europpean, countries such thing exist, and it's called tax. Besides paying taxes, there's no additional fees for attending university.

roel_v3• 11 years ago

"Besides paying taxes, there's no additional fees for attending university."

So what countries are that?

morgante6• 11 years ago

It is. If parent make $126,000 a year they're not suddenly on the hook for full tuition.

$125,000 is just the lower bound where transition is 0.

tacon• 11 years ago

Rice University (originally Rice Institute) began teaching in 1912 and didn't charge tuition until 1965, as they were also amending their charter to admit other than white students. My understanding is that Rice still provides a relatively large amount of student aid compared to most elite universities.

saryant• 11 years ago

Anecdotally, a number of my high school friends went to Rice and all claimed to be paying very little or nothing in tuition (2008). My high school girlfriend received a full ride offer there (as she did from Caltech, which is what she chose). IIRC 38 students from my high school graduation class received offers from Rice.

caminante7• 11 years ago

Rice actually has a lower-% of students receiving need based aid.[1] I think a key reason why Rice enters a lot of conversations re: value stems from Houston's low cost of living.

[1]http://colleges.usnews.rankingsandreviews.com/best-colleges/...

ezequiel-garzon2• 11 years ago

What happens for a family making $125,001? Are they expected to pay full tuition? I applaud the initiative in any event.

lkbm• 11 years ago

Families with incomes at higher levels, typically up to $225,000, may also qualify for financial assistance, especially if more than one family member is enrolled in college.

ezequiel-garzon2• 11 years ago

Thanks for your reply. I would imagine there is some sort of gradual scale from no tuition to full tuition. My goodness, I thought it was a reasonable question, but it earned me a -4 in Hacker News!

mg1982• 11 years ago

Can any one explain what '...and typical assets means'? I took it to mean the value of normal things you own such as a house and cars. This seems like a massive caveat against the headline (basically anyone who owns their home), but since it's being ignored, I assume I'm wrong.

WalterBright2• 11 years ago

It also implies that parents with modest incomes who scrimp and save for college tuition for their kids are kinda punished for it.

dantiberian• 11 years ago

I know of one family that run a profitable business and own ~10 rental properties. Their accountant has structured things such that they are making so little profit that they are able to get government subsidies for low income families. The 'typical assets' clause would probably be to disqualify people like that.

morgante6• 11 years ago

Owning your own home would be considered fairly typical for an American household.

It's to protect against people who have a million dollars in assets but make "only" $100,000 a year.

sukilot4• 11 years ago

And support families who blow their income on fancy cars and vacations instead of saving

JabavuAdams5• 11 years ago

The super-wealthy can play accounting games to have relatively low income but huge assets.

harryh12• 11 years ago

That's largely a myth.

bzbarsky• 11 years ago

The amount universities expect a family to pay for college in the US depends on two numbers: annual income and assets. A fairly typical formula for the expected family contribution is (income - allowance) * X + assets*Y, where the "allowance" depends on things like size of family, parents' ages, state of residence, etc, X varies from 22 to 47% depending on the size of (income - allowance) (and in particular there are various brackets in there, with different marginal rates, etc), and Y is generally about 5.7%. This is all for the parents; student income and assets are treated more harshly.

All of which is to say that the college might think you can pay a lot because you have a lot of income, or because you have a lot of assets.

What counts as "assets" varies also. Obviously things like bank accounts and stock investments are included, though retirement accounts are typically excluded. Home equity for the primary residence is included by many private colleges but not by the FAFSA's methodology (which is used by most public colleges, as I understand).

So yes, this can be a massive caveat. Stanford does consider home equity as part of your assets, so if you have a fully paid off house they may effectively assume that you will take out home equity loans or a mortgage on it to help pay for the college education.

Of course it's not that common for families with income of < 125k who have college-age kids to have a fully paid off expensive house. So in practice for many people this is not an issue. But there are absolutely people who are asset-rich and income-poor (think retirees!) for whom the fact that all this stuff is not purely income-based makes a huge difference.

WalterBright2• 11 years ago

One wonders about the people who make $125,001 - $170,000 who are then on the hook for the full tuition (around $45K). They'd find it cost effective to substantially lower their income.

obastani• 11 years ago

I'm sure Stanford offers partial aid as well -- this is just the threshold for zero contributions.

fnordfnordfnord3• 11 years ago

And they can probably afford enough CPA to make that happen.

sukilot4• 11 years ago

What is CPA?

downandout3• 11 years ago

"Families with incomes at higher levels, typically up to $225,000, may also qualify for financial assistance, especially if more than one family member is enrolled in college. Financial aid offers vary by family, but the financial aid expansion for 2015-16 will allow Stanford to reduce the expected parental contribution for many families at these higher income levels."

chx• 11 years ago

What I find even more important:

In either case, students will still be expected to contribute toward their own educational expenses from summer income, savings and part-time work during the school year. Students are expected to contribute at least $5,000 per year from these sources but are not expected to borrow to make the contribution.

mrowland3• 11 years ago

Agreed. Student earnings requirements aren't much of a problem for CS/engineering students (who can get paid summer jobs related to their field), but they are difficult for students trying to get into industries where unpaid internships are effectively a requirement. You would think Stanford would have made a change to this as well.

sukilot4• 11 years ago

The schools pay aid recipients $10/hr to sit in the library and study and help checkout books.

sloanesturz• 11 years ago

I'm a current Stanford undergrad. Most Stanford kids are able to pay for their "student contribution" by getting on campus work-study jobs (like in the Library or career development center), working as dorm staff in the underclassmen dorms, or working as paid researchers in professors' labs.

eatonphil• 11 years ago

This is nothing new. This happens at every top 20 private college/university respectively. I went to Haverford College [1] and paid nothing on tuition. Divorced parents and 10 siblings... That'll do it. A friend from high school went to Duke free too for similar reasons. And another friend went to Penn for free because of her parents' state too.

The only sad thing is how few people know about this. Under-privileged students think they can only afford state schools. In truth, I couldn't even afford a state school. Only a private college/university would give me the full financial aid that I needed to attend.

Thankfully programs like Questbridge[2] (it's not spam, surprisingly) help facilitate under-priveleged students applying to and attending top private schools.

[1] http://colleges.usnews.rankingsandreviews.com/best-colleges/...

[2] http://www.questbridge.org/

javaun• 11 years ago

My brother worked at Questbridge for a few years. They place low-income and disadvantaged (but brilliant kids) at top schools, for free rides. The top schools can't get enough of students like you, but they're hard to find. Questbridge's model is similar to executive headhunters. I believe they do approx. 20400 students a year. The challenging part is scaling what they do, since it's very manual labor intensive.

bradleyjg2• 11 years ago

It is true that below some income level many schools will expect no parental contribution, but the $125k / year level announced by Stanford is particularly high. Filling out the calculator at the education department(1) it appears that the FASFA expected family contribution for that income level would be somewhere around $20k (+/- depending on things like assets and family size).

Harvard, for example, makes that guarantee only as to students whose parents' income is up to $65,000 a year (2)

1 https://fafsa.ed.gov/FAFSA/app/f4cForm

2 https://college.harvard.edu/node/426

Edit: In light of dollaaron's correction below, this is much less significant than I thought at first glance. This part "Scholarship or grant funds will be provided to cover these costs in lieu of a parental contribution" is still above and beyond what many schools do, but is similar to Princeton and Harvard, as he points out.

dollaaron• 11 years ago

This is a no tuition guarantee, not a no parental contribution guarantee. In effect they are saying that if you make under 125,000, you'll only pay 20-25k for living expenses (room/board/textbooks/etc), which is similar to Harvard and Princeton, considering they both try to structure aid so families do not have to take loans out to pay them. Coincidentally (or not), this is also equivalent to the FAFSA EFC as you mentioned.

In this announcement Stanford clearly says that the no parental contribution level is 65,000, raised from 60,000 and now equivalent to Harvard/Princeton.

L_Rahman2• 11 years ago

It is true but only for the most part. My family income was below 60K, but my aid packages varied wildly among supposed peer institutions.

Harvard was the most generous, fully funded tuition + room/board + clothing stipend (presumably to keep up with the lifestyles of what would have been my wealthier classmates) + transportation stipend to fly back home for holidays.

All of the other Ivies (Columbia, Cornell, Penn) had roughly the same deal - full tuition and room/board

Hopkins - I required that I borrow 15k over 4 years to attend. Interestingly, this is the school I ended up going to.

Hydraulix989• 11 years ago

I went to an Ivy that made a "no loan" guarantee for me. Each successive year, their aid package got successively worse so I received less grant aid. I ended up with $10k in debt by the time I graduated.

morgante6• 11 years ago

Hopkins - I required that I borrow 15k over 4 years to attend. Interestingly, this is the school I ended up going to.

If you don't mind me asking, why did you make that (seemingly counterintuitive) choice?

Hopkins usually wouldn't be considered as a peer to the top schools which compete on aid packages.

jessaustin2• 11 years ago

...clothing stipend (presumably to keep up with the lifestyles of what would have been my wealthier classmates)...

It might just be a way of saying "pocket money", but if someone objected, this could be justified by Boston's climate. Poor students from warmer places are unlikely to own a sufficient range of coats and hats.

geddes• 11 years ago

Shout out for Haverford folks in tech. Are you in the bay area? Not a ton of us out here. We did meet up last week though: https://www.facebook.com/events/743588762415575/ add yourself to the group.

mrushton14• 11 years ago

Wish that existed up here in Seattle!

loganfrederick• 11 years ago

'The only sad thing is how few people know about this. Under-privileged students think they can only afford state schools.'

This is a huge problem that, in retrospect, was rampant where I came from. A pretty typical middle-class suburban high school, but one which rarely to essentially never sent any graduates to Ivy League schools. Why? Because it wasn't part of the community's culture.

How do you fix this? In anything other than upper to upper-middle class suburbs, the parents themselves probably went to state schools and have middle class jobs (which themselves are under pressure now). So the parents and neighbors didn't know anything about Ivy League schools or how to propel their own kids into the upper class.

By the time most kids learn how the culture works, it's too late, they're already in whatever college and life track they happened to fall into. It's takes especially thoughtful parents or other older role models (like great teachers or counselors) to see a kids potential and tell them about their life options.

Some kids have this experience (maybe it's a family friend or distant relative that happens to be very wealthy and shines a light on possibilities to the kid), but most do not.

briandear5• 11 years ago

And does Stanford really make a difference over a state school over the long term? Motivation and talent are more more important than a particular school.

wheels2• 11 years ago

This is a huge problem that, in retrospect, was rampant where I came from. A pretty typical middle-class suburban high school, but one which rarely to essentially never sent any graduates to Ivy League schools. Why? Because it wasn't part of the community's culture.

Hmm, I'm skeptical that it was a cultural issue. I went to a suburban high school and the issue wasn't that we didn't somehow know about the top schools, it's that you had virtually zero chance of getting in.

My best friends were the top couple students from my year and the year before me and I watched them mortified as the pattern played out -- they each applied to several top tier universities and were deflated when the stream of rejections came in (though one got into Notre Dame). Just being a valedictorian, active, national merit scholar wasn't enough. Most ended up going to their "safety" schools -- either University of Texas or Texas A&M.

My takeaway from that was that if you were white, middle class and middle-American suburban, that there was almost nothing you could do distinguish yourself enough to get into the country's top schools. As such, I think this announcement is more meaningful for folks from genuinely poor backgrounds than for those from relative suburban privilege.

mpdehaan2• 11 years ago

"How do you fix this? In anything other than upper to upper-middle class suburbs, the parents themselves probably went to state schools"

I'm skeptical this is a problem. There are some FANTASTIC public universities (many people choose to go to out of state).

"By the time most kids learn how the culture works, it's too late, they're already in whatever college and life track they happened to fall into."

There's absolutely nothing wrong with choosing to go to a public university. Many of us decided to attend one instead of private ones.

cafard• 11 years ago

At one time (forty or so years back) this was definitely so. I used to say that the closest I heard to college counseling was the obiter dictum of one of the secretaries that you needed a 1200 combined SAT to get into Notre Dame. The salutatorian of the class ahead of mine got into Princeton, deferred a year, and I don't know who put the idea in his head, but probably nobody at the school. Most of my classmates went to state schools--generally in-state, a few promising jocks elsewhere. I went to a local private university that offered some money, knowing no way to distinguish it from any other school.

copsarebastards• 11 years ago

It's true that every top 20 private college/university allows in a great many people for free.

However, there's a big difference between divorced parents and 10 siblings, and a situation in which I grew up: one sibling, married parents, lower middle class income, but my father had a ton of school loans. The result was that my family income was high enough that I qualified for reduced tuition at most private schools, but nowhere near enough reduction to make most schools viable. Cost was literally the only factor I was able to consider in my choice of school, and even having chosen the school which offered me the best financial aid, I was unable to complete school due to cost.

The fact is, the cost of education has risen to the point that higher education isn't available even to people in the middle class.

$125K/year family income reaches well into the middle class. I would have paid nothing to go to Stanford, and in fact I still would pay nothing to go to Stanford. I may actually apply and try to finish my degree. :)

shekhar101• 11 years ago

Great info! Thanks. Any idea about funding sources like QuestBridge for Graduate students coming to US for study from abroad?

sporkenfang5• 11 years ago

Essentially, colleges (and the government) expecting a family contribution to tuition meant I went into extensive debt on my own, though cosigned by my stepdad (who made it clear he would in no way take on any of the financial obligation of the loans) for college. Most of my friends' parents were the same way, and did not contribute to their children's college (and I'm not sure where all these kids whose parents are paying for their college are even going, really... or what kind of money those parents must be making to be able to pay outright for college tuition) -- at a top tier U.S. school. In an engineering program.

Working at a thrift store full time making minimum wage and going to engineering school full time for the first two years, then doing tech support full time and going to engineering school full time for the last two years was no joke, and I still have debt remaining, two years out of school with a good job.

Why should it be the parents' income that anyone cares about?

Students are expected to contribute? Don't make me laugh. It's their education, they are of majority age, they likely will be paying for it and then some. How are PARENTS expected to contribute at all? Mine honestly did not and do not make enough money to have any left over after taking care of my two younger siblings (ten years younger), and yet on the FAFSA right there, an "expected family contribution".

Edit: they do, of course, make enough money combined that the government expects that they'd want to send their kid to college and could theoretically contribute something to it. They did what they could, but that wasn't what fulfilled expectations laid down by the Powers That Be.

downandout3• 11 years ago

It's extremely difficult to gain admittance to a place like Stanford if your parents are not supportive of your educational ambitions. This is both because your academic results earlier in life (upon which admittance would be based) will tend to reflect an unsupportive family, and a place like Stanford wants students with supportive families. That's why parental support matters.

sporkenfang5• 11 years ago

Supportive of one's educational ambitions ~= having the money to pay for one's educational ambitions to be realized.

donatj• 11 years ago

Because kids with bad parents don't deserve good educations. Sigh.

marincounty• 11 years ago

Or, maybe Stanford counts on parential guilt? They have quite a big savings account. (Stanford’s $21.4 billion endowment (as of Aug. 31, 2014), and grateful donors give the school close to a billion dollars a year. I don't know how many full scholarships Stanford gives away per year, but I hope it's a lot?

(http://facts.stanford.edu/administration/finances)

jsprogrammer4• 11 years ago

though cosigned by my stepdad (who made it clear he would in no way take on any of the financial obligation of the loans)

Co-signing is taking on the financial obligation.

chengiz• 11 years ago

Only if signer is delinquent. People often cosign because they are family (without stepdad cosigning he wouldnt have got the loan). But also then you dont make them pay because they're family.

dedward• 11 years ago

If he co-signed then he 100%, absolutely took on the financial obligation. If you don't pay, he's legally, 100% on the hook for it.

sporkenfang5• 11 years ago

...legally, yes. However, he couldn't afford it, and I haven't gone delinquent, ever. In practical terms, he made it clear that he was cosigning because without that action I wouldn't have been able to afford college.

He could not, and does not to this day, have the money to pay down those loans (which I am currently paying down). However, he did have one thing he could offer: a reasonable credit history.

Essentially he lent me credibility. (And then told me nobody would ever find the body if I didn't pay down my debt.)

analog313• 11 years ago

Why should it be the parents' income that anyone cares about?

Why did Willie Sutton rob banks?

AnthonyMouse5• 11 years ago

The trouble with that logic is that it doesn't work when the effects stack.

This is a good case in point. According to the article families who make less than $125,000 pay nothing and those who make $225,000 or more pay the full amount, listed as $65,000. Now let's take the hypothetical family where one parent makes $125,000 and the other makes $100,000 and look at what happens. If the second parent keeps his or her job, this is where the $100,000 salary goes:

  28% federal income tax ($28,000)
  9.3% California state income tax ($9,300)
  Stanford annual cost ($65,000)
  Total: ($102,300)

In other words, that parent is working a full time job in order to lose $2300. And that's assuming there are no other taxes or loss of benefits that come from the higher income, which there are, and that there is only one child in college.

It seems like this can't possibly have been the intended outcome.

JabavuAdams5• 11 years ago

Because it's absolutely the norm for higher-income professional parents to pay for their kids' tuition.

I just assume that I will pay for my kids' undergrad. It's the norm where I live.

sporkenfang5• 11 years ago

Is it? I graduated two years ago, and this is of course anecdotal, but the only kids I knew that actually got their tuition paid for had trust funds, didn't pay for anything themselves, and had never held any kind of job.

How do you imagine you're going to be able to even as a likely relatively well-paid individual, if tuition rates keep climbing?

briandear5• 11 years ago

"Absolutely" the norm? Maybe in your neighborhood, but some parts of the country actually expect their kids to show some work ethic and gumption rather than expecting parents to pay for everything. A kid ought to have some skin in the game or else they end up majoring in women's studies or some such nonsense.

jkestner3• 11 years ago

I don't get it, either. My siblings and I were legally adults, so why were our parents responsible for anything? We got loans, worked jobs, and were responsible to no one else for bad grades or extra semesters.

The other responses say, "Because it's expected." That doesn't answer the question. Have attitudes shifted? As education's become more expensive, I wouldn't be surprised if colleges have marketed the idea that good parents pay for their adult child's education, in order to make sure that they have business as they jack up prices.

consz• 11 years ago

If your goal is to help your child get the best outcome they can get from college, its way more beneficial to have them focus on doing well in school and having the time to network as well as possible (especially in a school like Stanford) than trying to make them work what's likely a shitty job while they're in school to help pay for their tuition.

kelukelugames3• 11 years ago

Hey I have a sob story too. My parents own a 3 million dollar house and sent my sister to Harker for 20 grand a year, but only give me 20k total for college.

I mowed lawns, washed dishes, and worked retail before finding internships. But you know what? I still have more built in advantages than kids on need based scholarships. I'm luck my parents raised me well enough to get into good schools.

aabajian3• 11 years ago

Hate to bash Stanford, but as a current master's student in CS, I've found their financial aid to be horrendous. The only real options are RAships and TAships. I don't consider these to be "aid packages" because they entail a tremendous amount of work. My current employer matched what was going to be offered by the TAship with less hours overall.

EDIT: Just for kicks, here are some emails here that demonstrate the reality of Stanford financial aid at the master's level.

Last quarter:

Nov. 17th: Hold on registration due to account balance... Nov. 18th: This is a friendly reminder that you have unpaid charges on your account... [PAYS $10,000 of tuition]

This quarter:

Feb. 16th: Your Stanford student account has been placed on hold* due to an outstanding balance... Feb. 17th: This is a friendly reminder that you have unpaid charges on your account... Mar. 18th: Student Account Notice... Today: We are sorry to inform you that you are not currently eligible to participate in the StanfordCardPlan...due to financial hold. [PAYS $5,000 of tuition]

This cycle has gone on for the past year now. For some context, I take two classes per quarter and live on-campus (on-campus housing is the cheapest you can get in Palo Alto). My total tuition + housing is $15,562 per quarter.

_delirium3• 11 years ago

"Financial aid" as such in the U.S. typically means for undergraduate students, not graduate students. Graduate funding is a fairly different system, mostly consisting of competitive fellowships, research grants, and RA/TA jobs.

aabajian3• 11 years ago

Yes, but at Stanford almost every engineering graduate class is 50% undergrad, 50% grad student, save for a few of the 100-series classes.

philwelch2• 11 years ago

A CS masters is the last kind of degree Stanford would give good financial aid for. For a bachelors degree, you can get need based aid, and for a Ph.D, it's customary that you're pretty well subsidized, but masters programs are where they get you. I'm not sure why.

sukilot4• 11 years ago

Because terminal masters are only sought by indivuals pursuing significant financial reward, and Stanford wants a cut.

harryh12• 11 years ago

PhD students are essentially junior employees of the university. They're either teaching or conducting research, so they're getting paid (largely in the form of free tuition).

Masters students are customers buying an extra year or two of education.

toephu2• 11 years ago

Masters programs at universities across the U.S. are just used as money makers for the schools.

rhino369• 11 years ago

They are cash cows for the universities.

The Fed gov gives unlimited loan money to anyone for grad school.

And why should they subsidize a degree that is supposed to put into a high paying job. Even if you were poor, you won't be after.

fnordfnordfnord3• 11 years ago

Ineptitude at the bursar's office is a little off topic, and it isn't unique to Stanford. I'm sure HN's users could fill thread after thread with stories.

mraison• 11 years ago

The only real options are RAships and TAships

Having been in that exact situation before, I wouldn't complain too specifically about Stanford's master in CS. That department makes it really easy to get a TA/RA (I'm comparing with my friends in less trendy fields of study), and while they represent a non-negligible amount of work, I think they are perfectly manageable at the graduate level. So while it's not financial aid, it actually makes it possible to go through the whole program with a positive net balance. Now I understand that the absence of guaranteed funding can feel scary for many, although the current state of the job market should greatly reduce their fears.

insaneirish• 11 years ago

I've found their financial aid to be horrendous. The only real options are RAships and TAships. I don't consider these to be "aid packages" because they entail a tremendous amount of work.

Not saying that being a TA is by any means "easy," but come on. Complaining about having to work while being at one of the greatest universities in the world is a bit whiny, is it not?

You don't have to go to graduate school. It's a choice. If you want to be a career academic, you're grinding it out now for what could be a cushy life.

cozzyd3• 11 years ago

If he wanted to be a career academic, he'd be in a PhD program and wouldn't have to pay... terminal Master's are expensive because they are "worth it."

adevine2• 11 years ago

Seriously, call the Waaambulance. A master's degree in CS at Stanford is basically like a business degree - you expect serious financial reward from this investment, and you'll most likely get it.

TheBeardKing• 11 years ago

Instead of straight income, would a better method look at AGI, or account for cost of living in some way? Colleges doing this would be a boon for people in small towns like mine, but would offer smaller advantage to those living in high expense cities.

byoung2• 11 years ago

I find myself asking the same question as a resident of Los Angeles, where the cost of living is high, so salary is high. If I moved to San Antonio or Atlanta I could live a better lifestyle on a fraction of the salary and still take advantage of offers like these (and all the tax credits I currently don't qualify for).

roel_v3• 11 years ago

And yet, by staying where you are, your revealed preference is that you value you living there higher than the claimed 'better lifestyle' and foregone grants, subsidies etc...

(not a personal attack, just an observation - usually lots of 'grass is greener' talk in this sort of threads, but still urban centers grow at the expense of so-called 'low CoL areas')

borgia• 11 years ago

I fundamentally disagree with this, and its implementation seems to be a significant attack on dual income, middle class families who are doing well for themselves.

This doesn't hit the rich, it hits the middle earner and it hits them extremely hard. It's frankly pathetic but I suppose what can you expect in an era of hard pressed populist socialism.

philwelch2• 11 years ago

Statistically, $125,000 is not a middle income household income in the United States.

kansface• 11 years ago

California, particularly the Bay Area, is quite different. 125K for a family is squarely middle class.

chipgap98• 11 years ago

They are still giving partial financial aid for people making more that $125k. This is helping a lot of the people who would never have a shot at affording Stanford. Is it perfect? No, but it is a step in the right direction.

andrepd• 11 years ago

Why so? Why does it hit the middle earner? The fact that families with incomes under 125k pay no tuition doesn't mean that families in a higher income bracket get hindred. In fact,

pkrein• 11 years ago

The whole system of need-based financial aid seems to be effectively moving tuition towards perfectly elastic pricing based on how much students can pay.

Universities raise the price of tuition, then increase financial aid for the subset of students who can't pay the increase. Incremental revenue for the university still goes up as they get more revenue from anyone who can reasonably afford the increased "base tuition" amount.

morgante6• 11 years ago

Yup, it's classic monopolist pricing.

whybroke• 11 years ago

There maybe a sort of monopoly here but monopolies never set their prices to free (unless they're trying to destroy competitors which is obvious not the case here)

There may indeed be grotesque stratification problems with the system but that doesn't mean some part may do the right thing occasionally. Frequently even monopolies moderate their behavior out of fear of regulation. Here perhaps schools fear the reputation hit of graduating too high a percentage of rich dimwits.

neilmovva• 11 years ago

To be pedantic - you might be looking for "price discrimination" instead of perfectly elastic.

nkassis• 11 years ago

Also state have effectively kept their funding the same or reduced it leading to even more tuition increase costs being shouldered by the students.

As it is today, the easiest way for universities to increase funding is through tuition increase and they've been using that method more in recent decades.

bunkydoo• 11 years ago

Well, when the whole world found out how easy it was to cheat at Stanford this morning - they just said fuck it and made it free.

source: http://www.mercurynews.com/health/ci_27799963/stanford-unive...

wwwpatrick• 11 years ago

cool. But is access limited by money to pay, or by a system that can favor kids from fancy schools/backgrounds?

rvn1045• 11 years ago

Why is this even news?? This happens at pretty much every top tier private/public university. Colleges price discriminate between people of different incomes. The true cost per student is not 50k at a private school, it's probably more like 30k, and people pay between 0 and 50k depending on their income.

sehutson2• 11 years ago

Every time I see this, I get a little sick thinking about the ~$100k in loans I accumulated getting a BA at University of Chicago and Wash U in St. Louis (I transferred). I got some merit scholarships and a good amount of grant aid, but policies like this starting going into effect not long after I graduated. Based on the current policies at Wash U, I would have paid nothing :/

ryanSrich• 11 years ago

I honestly had no idea this existed. I feel like a fool now that I spent over $70k at RIT. Which, don't get me wrong, is a great school...but I could have went to Standford for free?...that's pretty crazy to me. I really really really wish I knew about this before.

derekp7• 11 years ago

I have a feeling that the reason some of these policies are going into effect (or getting expanded) is due to the increased dialog about rising tuition costs. They'd rather make it affordable for those who need the aid, so they can keep on getting the high tuition from those who can afford it. That way, they avoid any legislative action that would crush their money making machine.

sehutson2• 11 years ago

Yeah, I understand why they're doing it, and I think it's great since you can't really expect kids who grew up poor to have that kind of money at 17 or 18. If you're coming out of a sub-par school system and you spent your childhood constantly worried about money issues, you're doing well just to qualify for those kinds of schools.

I just wish there would have been SOME kind of retroactive forgiveness for those of us who were well below the family income threshold but were born just a couple years too soon. Don't get me wrong, I understood the implications of taking out huge loans and I'm doing pretty well now (finally making progress on the loans) - but it kills me to think I could have had the same education without the crushing debt.

hashmymustache• 11 years ago

Yea, hopefully there will be more education loan forgiveness opportunities in the future. I'm ~$160k deep on school loans. Yay US education system!

thoman23• 11 years ago

Man I wish this had been in place in the 90's when I went to Stanford. I grew up lower middle class in the Central Valley. My parents did everything they could to help, but that didn't make a dent of course. Stanford was fairly generous with outright grant money, but I still graduated with enough debt that it really handicapped my wife and I in our early adulthood years, and that was after taking 2 years off to work full time to help save money for tuition.

Still, I can't complain. I wouldn't trade my Stanford experience for anything. And for what it's worth, it would have actually cost me more to go to Berkeley as the aid package there wasn't nearly as generous.

a-dub• 11 years ago

    7,018 undergraduates   [1]
    9,118 graduates        [1]
    2,118 faculty          [1]
    2,872 clerical         [2]

It appears that Stanford has a very competitive student to bureaucrat ratio. I would think twice before handing them $60k/yr.

[1] http://facts.stanford.edu/

[2] http://facts.stanford.edu/administration/

rdl4• 11 years ago

I dropped out of MIT both to do a startup overseas (ITAR) and because my parents wouldn't contribute any of the "expected family contribution" and I couldn't get enough loans on my own.

Rather than all the crazy games, I'd prefer if education were genuinely market priced, or if individuals could take reasonable debt loads or sign indenture agreements. A commercial organization should be allowed to do something like ROTC; paying an undergrad full college costs in exchange for a guaranteed employee for 2-4y post graduation at market rate.

TylerE3• 11 years ago

That doesn't really work when the are already more graduates than jobs in many fields.

phazmatis• 11 years ago

Heard of STEM?

EugeneOZ2• 11 years ago

Almost any organization can find employee much faster than 2-4 years. So there is no sane reasons to pay for somebody's education, especially when there are chances that person can be expelled.

rdl4• 11 years ago

Big companies like Google or others are likely to continue to need ever increasing numbers of people. If dropping $100k upfront guaranteed them someone in 4y it could be worth it. If they could structure contracts same as rotc, so if you leave you owe repayment, it could work.

If they had this program they would probably prefer Waterloo coop style students; get them for 2y out of 6y while in school, and then after.

Loan guarantees would probably be the most sane commercial way to do this. You are on the hook, but iff you join, we pay off your loans, and creditors could then reflect that in creditworthiness decisions.

morgante6• 11 years ago

A commercial organization should be allowed to do something like ROTC; paying an undergrad full college costs in exchange for a guaranteed employee for 2-4y post graduation at market rate.

I'm fairly certain they can. In fact, tuition reimbursement programs aren't uncommon amongst elite employers.

rdl4• 11 years ago

Generally those are for additional classes taken by current employees -- either individual classes or a graduate program. Very rarely would that be for a full undergrad degree, and wen less likely they would hire a high school dropout and pay for full time college tuition for 4y first. ROTC is pretty unique in that respect because they have legal force of government for the contract.

zo12• 11 years ago

The company I work for offers bursaries to undergrad students. If I'm not mistaken, they even offer guaranteed industry experience by employing them afterwards. Not exactly the same as your suggestion, but on-par.

These things do exist, and higher education is not solely in the realm of government or colleges' doing. All it takes is for some sparky individual/group to implement it if the need is there. That is why it is very important to let the market price things using regular signals, instead of distorting it with government intervention.

What I mean is that currently there is a big shortage here for good software developers. So companies are willing to spend money on training up, paying college fees, whatever it takes.

On a side note. People are very wary of things such as "indenture agreements". It reminds them of slavery too much (I would hypothesize), as it seems they've conflated historically indentured workers with defacto slaves, despite consent.

therobot24• 11 years ago

paying an undergrad full college costs in exchange for a guaranteed employee for 2-4y post graduation at market rate.

Check out the SMART fellowship

techtivist4• 11 years ago

I am always conflicted about these. I was fortunate enough to get a full ride (all grants, no loans) to a top University, even as an international student. My parents couldn't afford to pay for my flight here, which the University did. In a way that has allowed me to take a riskier career trajectory by quitting a 6 figure starting salary at a top tech company after graduation within 3 months and starting a startup. So I am ever so grateful for policies like this.

But I wonder if universities should offer some sort of deferred payment (5 years after graduation for instance) to students instead (not a 3rd party loan). If you go to Stanford you are pretty much guaranteed a stable income when you graduate. Yes ,granted, a lot of alumni do donate without feeling the necessity to do so, but having such an option will help universities, perhaps more for those with smaller endowments "recover" some of the cost.

Universities could always make exceptions some time down the line on a case by case basis, depending on student's current income which will vary violently even for top universities, with some students deciding to work for a non-profit while others choosing a more lucrative job, just like income tax works.

Again, I am really not sure, just throwing it out there.

sytelus• 11 years ago

This is very interesting. As far as I know most universities don't even cover first semester worth of expenses for international students regardless of how bright they are. Most international students then find campus jobs and do 18 hour days to fill in for rest of the time in Masters programs. The PhD programs are bit more generous but never heard university paying for the flight.

techtivist4• 11 years ago

Only a handful do, the ones in top 10-20 academically and endowment wise. The university covered tuition, room and board, around $58k annually. I still worked 20 hours a week, to pay for other expenses, send back a little home and save a little.

mathattack• 11 years ago

I heard that Yale had a problem like this, and struggled to collect on it. It put them in a tough position of angering their alums to get their money.

ProAm• 11 years ago

Yes ,granted, a lot of alumni do donate without feeling the necessity to do so

You should pay it forward. It worked for you, help make it work for someone else.

techtivist4• 11 years ago

I definitely hope to when I financially can. Just one year into post-grad startup life :)

But in the meantime I am trying in my own little way, by advising current students, interviewing applicants and also coaching students back home in similar position as I was by helping them with their applications and SATs

kroosaidher• 11 years ago

I'm glad I didn't go to college, so I don't have to give any money out of guilt to a place which wastes so much of it on landscaping and sports.

That's what I saw when I visited more privileged friends at Universities, anyway.

I'd really rather give money directly to someone that needs it than to a dysfunctional organization (and they are pretty much all dysfunctional). I wish that was actually feasible.

bradleyjg2• 11 years ago

Take a look at the Harvard Law School loan forgiveness program. Although it does rely on 3rd party loans (in this case the third party is overwhelmingly the government), and so is a bit of the inverse of what you are proposing, it helps pay a quite generous portion of those loans under a broad variety of circumstances while not providing any repayment assistance to those who secure the most lucrative types of private sector jobs.

It is a sort of post hoc means testing, in contrast to the more usual undergraduate system of pre hoc means testing.

The federal government also has income based loan forgiveness programs (the current one is called Pay as You Earn), but it is far less generous.

http://hls.harvard.edu/dept/sfs/low-income-protection-plan-l...

techtivist4• 11 years ago

Ah! Hadn't heard about this. Professional programs usually don't offer need-based aid a lot, so this probably still doesn't go a long way. I was thinking more for undergrad programs, where need-based aid is much more common, and not too many students (none for internationals) qualify for gov grants, which might have similar provisions.

JDiculous• 11 years ago

My family was making about $150k/yr when I was in school. We didn't get any assistance.

It's great that children from lower income families are getting subsidized, but with these kinds of policies there's always a hard cutoff point, and the people just above that cutoff point are the ones who get screwed.

Money shouldn't be in education period. If whether or not you can study is even partly determined by the finances of your parents, then the system is wrong.

h43k3r• 11 years ago

Is this applicable for foreign students. If it is, a lot of Indian wouldn't have to take big loans for doing their masters.

octatoan• 11 years ago

As an Indian junior, this makes me even sadder. Especially considering that there are like 7 schools in the US that are need-blind for overseas applicants. :/

fapjacks• 11 years ago

This is what a step in the right direction looks like, folks.

egillie2• 11 years ago

With "typical assets" -- my family was below the income thereshold but didn't receive any aid from Stanford in '06 because our family farm was worth quite a bit. Lots of ways to slip through the cracks with these policies...

roel_v3• 11 years ago

Well not to make this personal, but how would you consider this 'slipping through the cracks'? If your family is worth 1mm or 2mm or whatever, would you feel it's 'fair' (for lack of a better word) that you'd get a full ride? 2mm in real estate is enough to retire on, would it be 'fair' if somebody (or their children) who essentially lives off the returns on their capital gets a 'needs based' grant?

egillie2• 11 years ago

Without getting too specific, a family farm like ours is definitely not worth $2mil, and outright selling it wouldn't cover me + siblings going to Stanford. But the key is that it's enough to borrow against -- Stanford just wants you to be physically able to pay, even if that means exorbitant loans, and they'll generally offer you enough grants to get you to the point where loans can cover the rest.

Even this 125k threshold assumes a 5k student contribution and doesn't cover the mandatory 15k in room + board for incoming freshmen. It's great PR, though, and still, props to them.

wlphoenix• 11 years ago

Owning land that has gone through 3 or 4 generations in the same family, while technically an "investment asset", usually isn't treated the same way from a planning perspective as, say, apartments you purchase with the intention to liquidate upon retirement. There may be a lot fewer ways to generate revenue from it, so in all reality you may barely be breaking even on upkeep. You're then forced to decide between giving your children an excellent education which will set the up well in life vs keeping the land which you have a strong emotional attachment to and wish to share with future generations.

jamdavswim• 11 years ago

Not having this is why I went to Cal.

brador• 11 years ago

Why use a fixed value and not a sliding % scale?

What about the family that makes 126,000 who pays tuition and is now in a much worse position that a 124,000 family.

rmah• 11 years ago

They do use a sliding scale.

curiously• 11 years ago

well i wasn't smart enough to get into standford and i already paid my student loans so...

airnomad• 11 years ago

I wonder what chances you have to get into Ivy League in the first place if your parents earn less then 125k.

stephencanon2• 11 years ago

Given that all the ivies have need-blind admissions for American students, and half are need-blind for everyone, the odds are about as good as they are for anyone else. Also, Stanford isn't an ivy.

outside1234• 11 years ago

What does 'typical assets' mean? Parents that haven't saved for retirement?

jlebar• 11 years ago

I went to Stanford as an undergrad just a few years after this bidding war between top universities began. The additional financial aid I received saved my family and me more than $100k -- that figure would be much higher if we factor in the interest on the loans I didn't have to take -- and I will be forever grateful. I applaud Stanford for expanding this program.

But I'm also a little sad about the way this is playing out, because the net effect is to set the top private universities even further apart from the many great universities that nonetheless can't afford policies like this. There's already so much pressure on a lot of kids to get into a top private university, and now many of them are in a position where if they don't get into one of the top four, their only option is a public school. (And yes, there exist public schools, such as Cal, which one can argue deserve to be mentioned in the same sentence as H/P/Y/S, but certainly there isn't a UC Berkeley in every state, and going to a public school out of state can be as expensive as going to a private school.)

If you really want to be sad, take a look at how short is the list of schools with need-blind admission that claim to meet all demonstrated need:

http://en.wikipedia.org/wiki/Need-blind_admission#U.S._insti...

This is a supremely low bar, because schools get to define how much you need; there's no standard for this. And of course schools can meet your need with loans. But even still, the schools on this list are the only ones in the country which even claim to be meritocratic in their admission of US applicants.

shamney2• 11 years ago

seems a little silly to support low income students like this yet continue with class biased "holistic" admissions

anovikov• 11 years ago

Now at least we have know the real threshold of poverty.

timtas2• 11 years ago

Boy, wanna talk about perverse incentives? How about this "typical assets" business? One more way today's world proves you're a sucker to be frugal and save. Stanford is indeed a luxury, and there's no reason a well-off family should not pay for it. But these free rides are not coming only from endowments. If you're paying full freight, you're not covering just your kid but a couple other kids too. This is a mad way to price products. Only maybe healthcare is less rational.

teej• 11 years ago

I hate to break it to you, but if you pay taxes you are subsidizing a lot more than "a couple other kids" going to Stanford.

The incentive is the American dream. Starting from nothing and making it to the top. I'm sad that you're offended by that.

timtas2• 11 years ago

You misread me, and put words in my mouth. I'm not objecting to getting or giving a hand.

Consider two families. One makes $100k/year and has $750k saved. They drive modest cars, live in a modest home, take modest vacations and drive their kid across town every day to the public (free to them) magnet school. The other family lives very well, has nothing saved, a house that they can't afford, and debt from paying for private school. Which one should get the free ride at Stanford? Which one will?

With real interest rates below zero and a bailout culture, which family is living the modern version of the American dream?

leelin• 11 years ago

The financial aid site clarifies the definition of typical assets. Seems like families with under $300K qualify, excluding retirement accounts and primary residence home equity beyond 1.2 times annual income. As others have mentioned, it's designed to prevent families who have large savings from manufacturing an artificially low income (an extreme case is retiring early for a few years to show no income).

The takeaway is, maxing out retirement accounts like a 401k and dumping savings into paying off the primary residence mortgage are ways to accumulate net worth without accumulating "above-typical" assets.

http://financialaid.stanford.edu/site/faq/index.html#faq_20 ===========

What do you mean by "typical assets"?

For applicants who report total annual parent income up to $125,000, we generally consider "typical assets" to be an adjusted total net worth of less than $300,000. Adjusted total net worth usually reflects the sum of the following amounts:

Cash, savings, checking Investments Home equity, capped at 1.2 times annual income Equity in real estate other than the home Business net worth

We do not include formal retirement assets (401k, 403b, IRA, Keogh) in our analysis.

spiritplumber• 11 years ago

I didn't get to go to Stanford.

So, when I got my rejection letter, I replied with "I reject this rejection" like in the Snopes story.

Then went to talk to the admissions folks, who thought that I had literally hopped on a plane and flew half the planet just to make good on a joke (I was already in the US for work actually).

Ended up working with a Stanford prof for a semester, after which I decided I was done with academia.

plg• 11 years ago

but you still need a high family income to send the kid to a school (private) where there will be a teacher who will have the connections with ivy league schools so they can write a letter of recommendation that will be read and not summarily discarded

at my (private) school the ONLY way to get into an ivy league (no matter how high your grades were) was to get a letter from the teacher with the connection to Harvard ... or the (other) teacher with the connection to Stanford ... or the (other) teacher with the connection to Yale

students even decided early on which courses to take so that they would have exposure to these teachers early on

analog313• 11 years ago

I don't want be a troll, but I am struck by something. I think this may be the first TB thread I've seen, about college education, where there isn't a strong sentiment (approaching 50%) questioning the value of college education at all, dismissing it as "signaling," and demanding "disruption" of the entire higher education system.

Is Stanford that powerful of a brand?

jliptzin• 11 years ago

I'm biased, because I went there, but I think people need to break down a college education into two parts: (1) the education you receive (the things you know at graduation minus everything you knew as a day 1 freshman) and (2) the people, friends, and connections you've formed.

Part 1 is quickly becoming a commodity for many study topics that are available online, for free or close to it, so it's hard to justify a $200k price tag for something you can teach yourself.

Part 2 is much more difficult to supplant with alternative education. The people I've met while at Stanford have been invaluable to me in starting my career, and I don't even consider myself great at networking. There's just such a huge brain trust there it's hard to even question the value of being there. I'm sure the same can be said of the top 20 schools, however that probably quickly drops off past that.

analog313• 11 years ago

Those are interesting points. I think there are some other factors as well: College provides kids with the experience of face-to-face interaction in an academic setting, which is sufficiently similar to a professional setting. And it also may provide psychological conditions necessary for some kids to actually finish. I would have had a hard time earning my BS degree sitting in front of a screen all day every day for 4 years, while living in a my backwards little hometown.

As a thought-experiment, imagine going down the hallway at a large company, talking to all of the new entry level recruits, and trying to guess which ones went to college and which ones studied at home, just from their behavior. Now guess which ones will move up the ladder and which ones won't.

If colleges are driven out of business, affluent parents will find other ways to provide their kids with those extras, poor kids won't know why their online education hasn't made them employable, and we'll just be back to the same disparities as before.

I'm obviously pushing a particular agenda here, but I think it's worth considering.

nraynaud• 11 years ago

My girlfriend works in the US education system (in an other state), and there seem to be a trend were the marketing power of those schools is good enough to attract rich kids from foreign countries paying full tuition, so that on the US side they could maintain appearances of some equality (without touching their budget, it's not on the table).

Of course, one of the problems is that the selection based on money is very different from selection based on school grades, and the whole sport story is set to play again with Saudi students.

dejv_cz1• 11 years ago

Although it isn't anything new, it's v good to still work with this idea, coz education shouldn't be limited by money...

shamney2• 11 years ago

how will this make any difference? if you're a non urm who doesn't already know that top colleges provide very generous financial aid, it's highly unlikely that you will have developed the right all round profile to get a place at stanford.

paparush• 11 years ago

My son goes to UNC Chapel Hill. He was his high school's valedictorian and had excellent SAT's. He won an academic scholarship (The Johnston) that has a needs based criteria as well. My wife (she's disabled and receives Social Security Disability) earn less than $100K. Based on our income, our son's scholarship is whittled down to all of $1000.00 per semester. I'm paying nearly $9,000.00 per semester so he can graduate with no loans.

dbbolton• 11 years ago

It would seem to me that using a single cutoff like this versus a continuous graded scale incentivizes people just above the cutoff to lie about their income.

Even if the expected contribution for a family with $130k is very small, it would be tempting to fudge the number and put that tuition money towards other expenses.

pitt19802• 11 years ago

I'm conflicted,

on one hand this is good in that they are recognizing that debt burdens are a real hinderence to their graduates

on the other hand, this is used to pitch the line that 65K tuition is no big deal

which you're in line for at the full rate at combined 225K income

look, I get that in modern internet culture, no sypathy is supposed to be shown to people with household income over 200K, but that is still really alot

its also not at all obvious that the return on any investment of 200K for education is worthwhile

I'll just link to: http://www.nber.org/papers/w17159

http://www.brookings.edu/research/articles/2004/10/education....

for the general case against

also even if it does pay off, you have to work like a dog to make it pay off, its not a passive investment

if you're buying a website on flippa, the degree to which your investment is passive or active factors pretty heavily into the price,

it should be the same for colleges

(I'd also love to see a breakdown of exactly how much of Stanfords admitted class comes form < 125K parent income, between 125K and 225K parent income, and > 225K parent income)

--------------------------------------------------------

also, I have a problem with the meme that elite colleges are now cheaper than state colleges

I get that merit scholarship vary by college, but students qualified enough to get into Stanford or Harvard will almost certainly qualify for full merit scholarships at most if not all state schools

(maybe not at Cal or UCLA, but almost certainly at UCSB or UCD or San Jose State or Fresno State)

that meme should stop

rckrd• 11 years ago

Honest question: Lets take a hypothetical worst case scenario. You are admitted to a top school. However, your parents make well over $125k but are for some reason unwilling to provide any contribution. You are responsible for full payments.

Is there no bank that will let you take out these loans? isn't it possible to take out a combination of federal and private loans to cover the cost?

Disclaimer: I was fortunate enough to go to a top university and pay nothing for tuition and housing.

Domenic_S3• 11 years ago

During my time at school 10+ years ago, the answer was no -- you had to fill out a FAFSA (with your parents' tax information), and you had to take the maximum allowed Parent PLUS loans before you could take federal or private loans in your own name. If your parents would not take the PLUS loan, you were SOL.

digitalsushi• 11 years ago

Worst case scenario, you wait until you're 24 and become a financial independant to the domain of college lending. This is how I did it (as a side effect - I started school at 24 because that's when I felt mature enough)

Parents with annual family incomes below $125,000 will pay no tuition

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