Stanford University Expands Its Financial Aid Into Middle Class

Stanford University on Wednesday became the latest prominent university to expand financial aid well into the middle class. It announced that students from families earning less than $100,000 a year would not be charged tuition.

Under the new system, which takes effect in the fall, families earning less than $60,000 would not pay for room and board.

Tuition next year is $36,030. Room and board add $11,182.

The move follows announcements of expanded aid by Harvard, Yale and many others that provide tuition breaks to families with incomes well above average as tuition increases have become an issue in Congress.

Yale said in January that it would sharply increase financial aid for undergraduates, even for families with annual incomes up to $200,000.

Karen Cooper, director of financial aid at Stanford, said the university would allot $21 million to financial aid, raising the aid total to $114 million. Cooper said the increase was the largest in the institution’s history.

“We heard very clearly from our parents, especially parents that considered themselves middle income, that the amount that we expected from them was very difficult,” Cooper said.

Students whose tuition, room and board are paid for will be expected to contribute about $4,500 a year from summer earnings and on-campus work, she said. For students whose tuition is waived, the university will continue to judge family assets and circumstances in determining aid.

Lawmakers in Washington have criticized wealthy colleges for continuing to increase tuitions even as their endowments swell. The lawmakers have raised the possibility of requiring colleges, which benefit from tax exemptions on donations, to spend at least 5 percent of their endowments a year, as private foundations are required to do. The Stanford endowment exceeds $17 billion.

“I hope we’re seeing a trend and a shift in thinking,” said Sen. Charles E. Grassley of Iowa, the senior Republican on the Senate Finance Committee, which has a central role in setting tax policy. “Spending a little more on students won’t break the bank for well-funded schools.”

The Stanford endowment is the third largest of American universities.

Cooper said the Stanford board approved last summer increasing the share of endowment spent annually to 5.5 percent. She said the current average aid package, including loans and on-campus work, totals about $32,000, meeting most of the cost of tuition.

If the wealthiest universities have been extending aid to families well into the reaches of the upper middle class, others have concentrated on reducing student debt by replacing loans with grants. Washington University in St. Louis on Wednesday became the latest in a parade of colleges replacing need-based loans with grants for students from families earning less than $60,000. Princeton University announced such a step a decade ago.

Overall, the actions are reshaping the financial aid landscape for students entering college next year and could mean that in some cases, attending some of the nation’s wealthiest and most elite private colleges could cost less than going to public universities.