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.
2/10/98
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