Questions and answers regarding changes in financial aid policies
These questions and answers were prepared by Cynthia Rife of the financial aid office.
Why are you making these changes now?
Over the past eighteen months the University has conducted research to better understand the impact of our financial aid policies on Stanford students and their families. The policy changes we are announcing for the 1998-99 academic year are a result of the information and feedback we've gathered from Stanford faculty, students, and their parents. These initiatives included a study by the Committee on Undergraduate Admissions and Financial Aid (C-UAFA), a survey of parents of Stanford juniors and seniors and several focus groups with the parents of current undergraduates sponsored by the Vice Provost for Student Affairs. The announcement of these changes now will be valuable to students and parents as they make their financial plans for the upcoming academic year.
These policy changes are an evolutionary part of the University's long-standing commitment to maintaining a need-blind admissions program to enroll the best students and meet the demonstrated need of all those who qualify.
From where has the impetus for these particular changes come?
In the autumn of 1997 we surveyed our undergraduate population to learn more about how the financial issues associated with a student's attendance were affecting families. Some of these families were receiving financial aid and some were not. What we found was valuable to us in two ways. First, we were able to determine that a high proportion of our families are well served by Stanford's strong financial aid program. Second, we were also able to determine that a portion of the financial aid population was having difficulty meeting their expected contributions. These families were generally considered to be middle income with marginal amounts of financial aid. These data confirmed anecdotal information from the Financial Aid Office and provided the impetus for changing the treatment of home equity and eligibility for financial aid.
The change in treatment in our outside scholarship policy has come primarily from a study done last year by C-UAFA. C-UAFA was particularly interested in more fully recognizing students who seek these outside resources. The Financial Aid Office has also received much feedback from students, parents and the many organizations and agencies which recognize our outstanding students by awarding them these scholarships. Our students received approximately $6.5M last year in outside scholarships.
Although we expect students should be willing to borrow and work to meet their educational costs, we also want to recognize the hard work and effort which goes into securing these scholarships and to provide ways to keep student-loan debt as low as possible.
What exactly are the changes which will affect families' expected contributions?
In the past Stanford included all of home equity in its analysis of a family's ability to contribute to educational costs. For some years the College Scholarship Service, part of The College Board, has offered schools the option of adjusting downward the value of the family home if it is valued at greater than three times the family's annual income. In most cases these families would have difficulty paying off the refinanced debt with their current levels of income. These families will now be eligible for greater financial aid at Stanford.
The inclusion of any amount of home equity is not as generous as some colleges and universities. Why will you continue to include some level of equity for home owners?
Stanford believes that parents and students have the primary responsibility for meeting educational costs. We also believe that families that have home equity are in a stronger financial position than those who don't. However, the use of 100 percent of home equity can put some families in a real financial bind. They can borrow against their home but they don't have the income to service the debt. By capping the value of the family residence at three times income we believe we will have more realistic financial expectations for our parents. Approximately one-third of our financial aid population will benefit to some degree from this change.
What are the changes in the outside scholarship policy and how will they affect Stanford students?
The change in the outside scholarship policy will allow students to reduce or eliminate the academic year job and student loan expectation in the financial aid package before having any impact on the scholarship awarded by the University. For example, in the past a student with an outside scholarship of $1,500 would have had the job and loan portions of his/her financial aid package reduced by $1,000 and the University's scholarship award reduced by $500. Now the entire $1,500 will reduce the job and loan portion of the award. Once the outside awards exceed the job and loan portions of the package, the University's scholarship will be reduced by that excess. The standard job and loan portion of the package is $6,500 although it is lower for some categories of students.
When will these changes be effective and who will they affect?
The changes will be implemented for those undergraduates who will be enrolled at Stanford for the 1998-99 academic year.
You have early decision. Some of those students already have financial aid awards. Will they benefit?
We have made only estimated financial aid awards thus far for 1998-99. When we make finalized financial aid awards for this group of students, they too will benefit.