There's nothing like a little congressional heat to get the ball rolling. Following on the heels of Harvard and Yale, Stanford is the latest top academic institution to announce it will be increasing financial-aid opportunities to students from low-income families. Specifically, Stanford announced it would no longer require parents earning less than $100,000 to pay tuition, and students from families earning below $60,000 would get a free ride on all expenses, including room and board.
The top higher-education institutions' new approach to financial aid comes at the urging of the Senate Finance Committee, which has been examining the multimillion-dollar endowments of approximately 136 universities and has urged them to spend 5 percent of their assets annually, reports The Wall Street Journal.
Sen. Charles Grassley, the senior Republican on the Senate Finance Committee who has been pushing the charge, wrote universities with endowments of $500 million or more last month asking them to "respond to a series of questions about payouts and financial aid," reports the Journal.
Stanford's announcement coincides with a survey by the Council for Aid to Education, which reported the university led U.S. fundraising for the third year in a row with $832.4 million in charitable contributions in 2007.
On his web site, Grassley applauded announcements made by the top universities that are expanding their financial-aid packages but chided other universities for not following suit. "More than 60 other colleges and universities with endowments of at least $1 billion are making church mice sound loud by comparison. We need to hear from the presidents and boards of these colleges as well," Grassley wrote. "Parents and students have a right to expect these universities with big endowments to end the hoarding and start helping with skyrocketing tuition costs. Colleges are tax-exempt, and tax exemptions helps [sic] endowments grow."
There's little doubt that the implied threat that Congress may begin to reexamine the nonprofit tax status of these universities set this chain of events in motion, says Mark Kantrowitz, publisher of financial-aid web site FinAid.org. "The pressure from Congress is certainly adding momentum to a trend that about two years ago," Kantrowitz tells DiversityInc.
"Right now, there are more than three dozen such colleges. That's enough of a critical mass to force a lot of the other elite schools to adopt similar measures," he says. "Ultimately this may lead to a doubling of the number of low-income students graduating from elite colleges, which is clearly a good thing."
