Law school financial aid funds “wiped out”

For the first time ever, Stanford Law School will reach into its unrestricted funds to cover students’ need-based financial aid. Lower endowment returns and an increase in the number of students qualifying for financial aid has caused the school “to wipe out” the financial aid funds for this academic year, according to the University’s 2012-13 budget plan.

Judith Romero, a spokesperson for the law school, wrote in an email to The Daily that this deficit is not “an unmanageable issue,” citing a plan designed by the law school that aims to close the budgetary gap in three years.

Rather than altering the financial aid policies, Romero said the law school will be “using our financial reserves, raising money and asking the University for assistance (which it generously provided).”

The centerpiece of the plan will be a $20 million fundraising campaign. Romero said the money raised would “enable the law school to endow future financial aid needs.” Once invested, the target figure is expected to produce more than $1 million in endowment returns each year.

Poor economic conditions have caused more students to qualify for financial aid in recent years, Romero said.

According to this year’s budget, “in the past several years – without any change in school policies for awarding aid – the number of students with need great enough to qualify them for a scholarship rose from 50 percent to 60 percent, while the average award increased by 20 percent.”

Adding to the problem, endowment payouts dropped by 25 percent during the same period, causing “a loss of nearly $2 million of financial aid income.”

In response, the law school decided to dip into its unrestricted funds, and the University provided a one-time injection of funds. These moves have allowed the law school to continue offering the same level of aid to students.

Romero called the school’s financial aid program “the most generous” in the nation. In the 2011-12 academic year, Stanford Law School offered an average financial aid award of $25,000, and students had an average debt burden of $109,000 at graduation.

“We are very grateful to the University and are glad to report that the gap is closing and our plan is on track,” Romero said.

 

Kurt Chirbas contributed to this report

  • Jessy

    All the law school faculty and students will still vote for Obama, who will cause more of this economic misery over the next 4 years.