The University projects it will collect $296.5 million in undergraduate student fees for the 2011-12 academic year, reflecting a 3.8 percent increase over last year, and will award $148.9 million in undergraduate financial aid, a 1.5 percent increase over 2010-11.
The numbers project $57 million in revenue from undergraduate fees–which include tuition, room, board and miscellaneous fees–for 2011-12, as well as a 5.9 percent revenue increase over last year’s $53.8 million. For 2011-12, income from student tuition and fees will represent 17.4 of the University’s consolidated budget revenue, while undergraduate financial aid will comprise six percent of expenses.
Finance Cheat Sheet
According to University Vice President for Business Affairs and Chief Financial Officer Randy Livingston, the average undergraduate during 2010-11 received $19,000 in financial aid, or approximately half of Stanford’s tuition.
Financial aid draws on four primary sources: department funds and expendable gifts; endowment income, which provides the bulk of support in the $70.5 million projected for 2011-12 aid; President’s Funds, including alumni support from The Stanford Fund; and general funds, drawn from the $1.04 billion set aside for general University expenses.
The Provost’s report to the Faculty Senate provided a clear breakdown of where undergraduate tuition fees come from, the largest two contributors being 58 percent from families themselves and 18 percent from endowments, gifts and other sources.
However, according to Livingston, these numbers are much less clear-cut than they appear. The total cost of educating a student for 2010-11 was $53,300, not including room and board; tuition, however, was $38,688, meaning students who paid full tuition received a $14,600 subsidy–27 percent of the cost of their education.
With the addition of financial aid, this brought the average student subsidy to $33,600–63 percent of the full cost of an undergraduate education.
“Figuring out exactly what we spend on educating students is challenging, as faculty spend time teaching, advising and mentoring students; undertaking research and serving in leadership roles for the University,” Livingston wrote in an email to The Daily. “Periodically, we’ve undertaken studies to estimate the cost of educating an undergraduate student, based on estimating the allocation of time among faculty and other staff devoted to this mission.”
He said that the funds to make up this $14,600 difference come “largely from University endowments,” including professorships for faculty and funds allotted to specific programs such as Bing Overseas Studies.
Provost John Etchemendy provided a similar calculation to demonstrate the University’s spending on its students.
“Several years ago, an outside group did a study on the full cost of the undergraduate education delivered at various colleges and universities,” he wrote in an email to The Daily. “This involved carefully figuring out how much the university spends on undergraduate classes, programs, etc., and excludes what is spent for graduate education, research and other activities. This was then divided by the number of enrolled undergraduates, to get a per student number, and this was compared to the full tuition charge.”
The study showed that Stanford’s full tuition covered 58 percent of the amount spent on the University per student per annum.
“Flipping that around, it costs us 72 percent more to provide the education than is covered by tuition, before financial aid,” Etchemendy said. “In other words, even the full-paying student is getting a substantial subsidy–implicit financial aid–from the University.”
He also chose to separate tuition from room and board, as Residential Housing & Dining Enterprises are auxiliaries to the University that “in theory…charge exactly what it costs them to provide the student housing and meals.”
“I say ‘in theory’ because there are explicit and implicit subsidies,” he explained. “We have put in central University funds (gifts, reserves) to subsidize building some of the dorms, which is an explicit subsidy that reduces the room and board charges to the students, and, of course, there is no land cost for any of the facilities, which provides an implicit subsidy that reduces the cost of housing to the students. But by and large, students pay for what they get.”
Evaluating Stanford’s Value
Etchemendy was unclear on how exactly to define the financial benefit–that is, the amount a student receives in financial aid as well as via participation in campus programs ranging from research grants to overseas studies to on-campus Volunteer Student Organizations (VSOs)–derived from a Stanford education.
“Some students take more advantage of the opportunities at Stanford than others,” Etchemendy said. “They participate in more activities, more programs and so forth. Conversely, other students participate in less. Is it possible that the latter students are getting less than they are paying for, while the former are getting much more?”
He used the analogy of an amusement park’s entrance fee to explain the situation.
“Some people go on more rides than others,” he said. “Does this mean they are getting more than they paid for, while the others are getting less? It’s hard to say. I think a lot of the people who go on fewer rides would disagree (think, for example, of the person who hates roller coasters but enjoys other aspects of the experience).”
He also compared the expense of running different rides to the expense of providing various classes at Stanford. While Introductory Seminars have a small size and employ senior faculty, increasing cost, larger introductory classes such as Sleep and Dreams or Introductory Economics are “comparatively cheaper for the University on a per-student basis.”
“But there’s a reason these classes are popular and grow large: ask anyone who’s taken Econ 1 from a great teacher like John Taylor,” he explained. “Do these students ‘receive less’ from these highly popular classes? I don’t think so.”
The Student Perspective
Michael Cruz ’12 and Stewart Macgregor-Dennis ’13, ASSU president and vice president respectively, provided a similar perspective on the value of a Stanford education and especially the role that financial aid plays in determining that value.
“I think the most important thing is for students not to have to worry about their financial situation,” Macgregor-Dennis said. “The financial aid program will be successful if it allows students to not think about money and just focus on…participation [in Stanford's extracurricular opportunities], academic success and enjoying Stanford.”
Director of Financial Aid Karen Cooper stated that the mission of her office is just that: to remove financial aid from a student’s decision to attend Stanford.
“One of our goals in the financial aid program is to take the financial aspect out of that decision-making process,” she said. “I would much rather see students choose an institution based on their overall comfort, their academic goals, etc., than purely on a financial basis.”
Cruz, however, used himself as an exhibit of how financial aid can define a student’s Stanford experience.
“Financial aid and on-campus participation in clubs, tutoring and other campus activities is very positively correlated,” he said. “I know that if I wasn’t [on financial aid] I would have to get jobs that don’t necessarily interest me but pay much better than the jobs that I have had. I wouldn’t be able to be involved in any of the VSOs on campus that have really helped make my experience at Stanford.”
Cooper provided a similar sentiment.
“A large proportion of students on financial aid are very grateful for the assistance they’re receiving and realize they couldn’t be here without it,” she said. “Whether or not it makes them more anxious to take advantage of opportunities on campus, I think that has much more to do with the individual student’s personality.
“I can name off dozens of students with the same situation; just read any TSF [The Stanford Fund] letter, and you can see the positive correlation between those two,” Cruz said.
He also pointed to a potential correlation between financial aid and academic success.
“Everyone who comes to Stanford has an equal chance at academic success, and I think that for a lot of students, one of the big factors that could hinder academic success is worrying about financial aid, particularly at institutions that don’t offer strong financial aid packages like Stanford,” he said. “Those two are positively correlated–that is, when students have better financial security, whether it’s through their parents, through financial aid, through scholarships that they got, I think it definitely helps their academic success.”
The Student Stand
Some students suggested that financial aid, as well as the ancillary benefits and costs derived from it, does not have a consequential impact on their enjoyment of Stanford.
One rising sophomore who receives a $39,000 per annum scholarship differentiated between a student’s ability and decision to participate. She asked to remain anonymous to protect her personal financial information.
“If you’re in your dorm room all day not doing anything, then I suppose the school’s not spending on you because you’re not going out there to take those opportunities,” she said. “People might have different experiences, but I don’t think that’s based on how much Stanford’s spending, it’s based on how much you personally are spending.”
One former varsity athlete who is entering her junior year estimates that only about 10 percent of varsity athletes receive a full scholarship at Stanford.
“[Financial aid affects] sense of worth as an athlete and making tuition affordable, but the Stanford campus and atmosphere have the ability to win people over,” she said.
She justified some of the ancillary benefits that Stanford funds for athletes as instrumental to academic and athletic success; for example, most non-athletic tutoring on campus takes place at the same time as practices. She did, however, note that athletic involvement precludes participation in some other University-funded experiences such as overseas study.
Another current varsity athlete stated that she would have come to Stanford “no matter what,” but that the athletic experience is “give and take.”
“It’s really a draw,” she said. “For example, the job I’m working this summer, I was first … exposed to it from the athlete luncheon, but I actually couldn’t attend all of the company’s other events on campus because they were during practice.”
She also noted that the influence of financial aid varies depending on the sport, as some such as football have many scholarships while others such as men’s rowing have “virtually none.”
Both athletes asked to remain anonymous, as their coaches had asked them to refrain from speaking with the press.
Cruz summarized the Stanford experience as a direct function of the individual as opposed to any outside factors.
“Students try and find what they really want at Stanford,” he said. “For some students, that’s getting really involved in student organizations and groups and activism and on-campus tutoring and using the gym, and for other people that’s getting involved in social life, in hanging out with their friends a lot and having friends in classes.”
“One thing I can note is that in exit surveys, the number of students who say that the Stanford experience was not worth the cost is vanishingly small (I don’t have it in front of me, but it’s on the order of 1 or 2 percent.),” Etchemendy said. “If anything, the positive feelings get stronger among alumni looking back on the experience and assessing its value. So I have to believe that very few people give (in the sense of pay) more than they get (in terms of the self-assessed value of the experience) at Stanford.”