How Aid Works

Enhancements for 2008-09

Stanford is dedicating an additional $20.7 million to need-based scholarships for undergraduates in academic year 2008-2009.  This increase has allowed us to implement the new policies listed on this page.

Zero Parent Contribution for Parents with Income Below $60,000

For parents with total annual income below $60,000 and typical assets for this income range, Stanford will not expect a parent contribution toward educational costs. Students will still be expected to contribute toward their own expenses from their summer income, part-time work during the school year, and their own savings.

Tuition Charges Covered for Parents with Income Below $100,000

For parents with total annual income below $100,000 and typical assets for this income range, Stanford will ensure that all tuition charges are covered with need-based scholarship, federal and state grants, and/or outside scholarship funds. In most cases, the parent contribution will be no higher than the standard cost of room and board (around $11,000). Many parents in this group will see contribution amounts far lower than $11,000.

More Generous Method for Determining Family Contributions

Our methodology for calculating the expected family contributions for all applicants has been revised to be significantly more generous, while remaining true to the principles of need-based, equitable distribution of funds. Changes include:

• Capping the amount of home equity in the parent asset calculation at 1.2 times the amount of total annual income
• Increasing the portion of total parent assets that are protected against assessment, for most families
• Adjusting the parent income calculation to reflect the higher cost of living in certain parts of the country
• Dividing the total calculated parent contribution evenly among multiple siblings in college
• Decreasing the assessment rate for student assets from 25% to 5% per academic year

Students Not Expected to Borrow to Meet Educational Costs

Students are no longer expected to borrow student loans as part of their financial aid packages.  Instead, students can cover their expenses by working part-time during the academic year, with a standard earnings expectation of $2,500.  The typical hourly wage for student part-time employment on campus is $11 per hour.  At this rate, students would need to work an average of 7.5 hours per week to meet the earnings expectation. Students are also expected to contribute from their summer earnings a standard minimum amount of $2,000.
Students can reduce or eliminate the earnings expectations by obtaining scholarships from outside agencies and organizations. Outside scholarships will reduce the earnings expectations on a dollar-for-dollar basis.

Questions and Answers

Do the financial aid program enhancements apply to all undergraduate students?

Yes! All undergraduate financial aid applicants who are pursuing their first Bachelor's degree, including upper-classmen (continuing students) as well as newly admitted freshmen and transfers, are being evaluated using the new policies for the 2008-2009 academic year. This includes students admitted under the Early Action program as well as those admitted in the Regular Round. The enhancements do not apply to graduate or professional students or to undergraduates pursuing a second Bachelor's degree.

What do you mean by "typical assets"?

For applicants who report total annual parent income up to $100,000, we generally consider “typical assets” to be an adjusted total net worth of less than $250,000. 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.
The Financial Aid Office reserves the right to make the final determination of the expected family contribution, in consideration of all factors affecting a family’s overall financial situation and ability to pay.

My parents' total annual income is less than $100,000. Does that mean I don't have to pay tuition?

Students who qualify for this new policy will receive at least enough scholarship and grant funds to completely pay all tuition charges. You will not be expected to pay tuition charges out of your own pocket. However, you and your family may be expected to pay for some or all of your other educational expenses, including room and board, books and supplies, travel and personal expenses.

My parents' total annual income is more than $100,000. Is it still worthwhile to apply for aid?

Yes. While some of the program enhancements are limited by total income, other enhancements benefit students and families at all income levels. We review each applicant's individual situation, taking into account all family circumstances that may affect the ability to pay. If your family has unusual expenses (for example, high out-of-pocket medical costs), we will consider these factors in determining your eligibility for aid. Even if you are not eligible for need-based scholarship, we will still let you know about low-cost loans for which you qualify.

Are the financial aid enhancements retroactive to prior academic years?

No, these enhancements are effective starting in the 2008-2009 academic year. Expected family contributions for 2007-2008 and earlier will not be adjusted in light of the enhancements.

Do the new policies apply to international students?

There are many variables involved in the calculation of aid eligibility for international students, including differences in currency values, which make it difficult to say how any individual international student is going to be affected by these changes. We will continue to evaluate international applications on a case-by-case basis.

Do I need to apply for admission to Stanford in order to qualify for the new financial aid policies?

Yes. The financial aid program is available only to students who have been accepted for undergraduate admission. The Undergraduate Admission Web site provides information about the admission application process, including deadlines.