Stanford University made education a lot more affordable for its middle-class students last week — by making it free.
The elite school, whose alumni include Tiger Woods and Chelsea Clinton, announced students whose parents make less than $125,000 will not have to pay tuition, and those whose parents earn less than $60,000 will be excluded from paying room and board as well.
The cost to attend the school is just over $64,000 a year, according to its financial aid website.
The move expands its previous policy, which offered free tuition to students whose parents made $100,000 or less.
It also highlights one of the ways some of the country’s elite universities help control costs for their students.
Harvard, Yale and Princeton all offer similar deals for middle-income students who can’t take on the burden of such high tuition and don’t qualify for assistance offered to applicants from lower-income families. Bloomberg has a list of the other top programs with similar deals.
Of course, Stanford and other top universities can afford to provide free education to a number of their students because of the high number of wealthy attendees who pay full price.
Their graduates usually do well upon graduation, and their donations as well as those from others have led to hefty endowments. Currently, Stanford’s is $21.4 billion.
But, the low acceptance rate at these universities mean the vast majority of young people will have to borrow tuition money. Not all colleges and universities have the ability to raise hundreds of millions in funds every year.
However, there is something else they could do to help out.
As this article from Vox points out, Stanford is very transparent about costs. High school students can see how much they’re likely to be awarded and how much they’ll have to borrow before they’ve even sent in their application.
At other universities, young people might not find out until after they’ve been accepted and filed financial aid forms. Even then, it can take months after acceptance and well into the first year of school before all the available aid is apparent.
This might seem like a small thing considering the incredibly high amount of student loan debt in the United States. But, it would certainly help students know and understand the burden they’re taking on when heading off to school.
Not every school can offer deals like Stanford or the Ivy Leaguers, but helping young people make sound financial decisions could help curb the growing mass of loan debt across the country.
Stanford’s financial aid and net price calculator
How to read a financial aid award letter