"In the future, Harvard will cost $1 billion a year, and only Bill Gates's children will pay full price. When anyone else walks through the door, the message will be 'Special price, just for you.' " --Greg Mankiw

I thought this was always the case?

Well, crap. The only reason I didn't apply to Stanford was because my family wouldn't be able to afford it.

..but Berkeley's EECS a wonderful alternative, so it's all good, I guess. =)

I stubbed my toe many a time at the Soda volleyball court. It's called sand, people... get more of it.

Money was the reason I didn't apply to Stanford, but my grades and SAT's were the reason I didn't get into Berkeley ;)

Oh well. At least I got to go there for grad school (Berkeley, that is).

just make sure you don't spend all your time studying in Soda...

Indeed. Do I know you? I hang out in the CSUA sometimes.

I just graduated in December, don't know, maybe we've met. Shoot me an email at keshavs at berkeley dot edu if you want to chat!

1. If your parents make 100k+ but don't want to spend it on your education, you're screwed.

2. If you're not a spoiled only child and your parents have to divide that money up then you're screwed.

#1 angers me especially. Parents I know don't do that anymore, especially when colleges rape us with such obscene tuitions while doing relatively little to improve the education.

or

3. If your parents make 100k+, but through financial stupidity, have nothing saved up for your education and no disposable income.

Happened to me. Here is a financial tidbit for anyone out there... don't buy a $40k car every two years. They tend to depreciate severely and leave you with nothing to show for it and a big monthly car payment. </bitter>

"1. If your parents make 100k+ but don't want to spend it on your education, you're screwed."

With tuition and expenses running 40k+ a year, I think that could put a crimp in the budget of a family making a little more than 100k+.

I don't know how much you paid for your school -- but with math like that I'm sure you paid too much.

But anyway, how the heck can you blame the kid if the parents are tight with their money?

Assuming you'd be expected to pay full tuition and board, which you surely would not.

I did after the first two years.

In case #1, were you better off before this change?

It is possible to become not-a-dependent through paperwork-fu, also, in which case a student would qualify if they make under $100k (likely).

If your parents make $101k, they don't charge you full price.

"2. If you're not a spoiled only child and your parents have to divide that money up then you're screwed."

Financial aid calculations typically take siblings into account.

Didn't for several of my sisters, FYI.

Did for my family, again FYI. My sister's financial aid package nearly doubled when I went to college, and mine dropped off fairly significantly in my last year when she graduated. Rice and Amherst.

Lets say your dad makes 55k and your mom makes 55k, I think your family would save a ton overall by having your mom or dad take an early retirement.

See also http://philip.greenspun.com/school/tuition-free-mit.html

Damnit...so went to the wrong school...

Funny how if I went to Stanford it would be profitable for my mom to quit her job.

the rich feed the rich!

One might or might not be impressed - depending upon the number of students this is likely to affect. I am sure that Stanford has done it's sums and taken into account the net impact of attracting applications from bright students coming from less well of homes.

"I am sure that Stanford has done it's sums and taken into account the net impact of attracting applications from bright students coming from less well of homes."

If you read the article, I think it's clear that Stanford has taken into account U.S. Senators questioning it's tax exempt status when it has a ballooning endowment along with big tuition increases.

I forgot where (Greenspun, I think) but the gist was that non-profits must disburse 5% of their endowment each year but these mega$$$ universities were doing more like 3.5%-5%. It's worth giving away free tuition to some middle class kids to maintain that status. Some of the endowments (Yale, Harvard, Standford, etc) are so big that they're basically investment funds that run universities in order to avoid paying taxes.

> Some of the endowments (Yale, Harvard, Standford, etc) are so big that they're basically investment funds that run universities in order to avoid paying taxes.

I think there is a fundamental difference: the investors in those funds are not making any profit. The managers are taking some fees (although even those are pretty modest, compared to what they could make running their own hedge funds and taking 2+20), but the endowments are either reinvesting all their profits or using them to benefit the university.

>Some of the endowments (Yale, Harvard, Standford, etc) are so big that they're basically investment funds that run universities in order to avoid paying taxes.

If that is what they are, then what is the exit strategy?

To rule the world?

This will definitely welcome a lot of foreign students to apply where the rich middle class barely earns $30000 - including the IT industry which has the fattest pay packages.

It's unclear whether this policy also applies to foreign students.

Typically, Stanford's financial aid to foreign students has not been "need-blind".

Does anyone have further info on this?

I am very much interested in this topic...given that I'm foreign. Does anybody know if this would benefit a peruvian?

The University of Pennsylvania also has a similar policy. http://www.admissionsug.upenn.edu/paying/

Those must be Business students in that picture. No liberal arts or engineering majors I know (myself included) look that... clean and alert.

Amherst has done this for a while, but with a much lower cutoff (I think it was about $40K). They also just eliminated loans for all students last year, which I think will raise the no-tuition cutoff significantly. I heard several other Ivies and top liberal-arts colleges were thinking of following suit.

Olin College was also founded on this premise, but they started charging tuition again when the dot-com bubble burst and most of their endowment vanished.

Does it bother anyone else that the sample scenarios mention home equity as a factor? Maybe college tuition has risen partly for the same reasons as other items during the last few years: because it can. Cheap credit makes for high prices. It's a good move by Stanford to pull back now before the home equity ATM is completely burnt out.

I like this policy because I imagine it turns the admissions trend away from "Rich Kids" and back to "Smart Kids" ... which is what these Universities want to maintain their cred.

So now most of the costs of getting into Stanford are simply before you get into Stanford (private school, studying, night school, extra-curriculars)

What about grad students?

are they getting money from elsewhere, or are they just taking fewer students from those income brackets?

Their admissions are need-blind, so they can't "just take fewer students" from a given income bracket.

I mean it somewhat facetiously. I went to Cornell, and judging by the prices for books, food (the items that are really marked up), margins are important to them. Then again, they have less money than Stanford.

they have 17 billion dollars in cash from donations and various other means. they're now disbursing that through the free tuition process.

These Universities have huge endowments.

Harvard's stands around $35 billion (http://www.news.harvard.edu/gazette/2007/08.23/99-endowment....). At a conservative 4% draw rate, this could fund 40,000 students per year at $35k/yr tuition, forever. So really, free tuition is chump change for them. Obviously they have a lot of other stuff to support with their endowment, but they only have about 6700 undergrads (http://www.admissionsconsultants.com/college/harvard.asp), so it's not really an issue.

They probably just decided to scale back the budget by 5% on one "monument to some architect's ego".