PALO ALTO, Calif. — In a radical change to its financial aid program, Stanford University will no longer charge tuition to students whose families earn less than $100,000 a year and will waive room-and-board fees for students whose families earn less than $60,000 a year.
The university is making the change in the wake of published reports last month that its endowment had grown almost 22 percent last year, to $17.1 billion.
That sum had begun to attract attention from lawmakers who want wealthy institutions to do more to reduce tuition costs.
Financial aid also will increase to families that make more than $100,000 a year.
To pay for the new tuition assistance, the university said it will increase its annual endowment payout to 5.5 percent. The new plan, which begins in the 2008-09 academic year, eliminates the need for student loans for qualifying students.
People are also reading…
Stanford is among dozens of high-end colleges and universities where tuition has grown faster than the rate of inflation and where tax-exempt endowments have increased by more than 10 percent annually.
Last month, after a report from the National Association of College and University Business Officers called attention to the swollen tax-exempt endowments, a prominent U.S. senator began to question the practice.
"They're supposed to offer public benefit in return for the privilege of tax exemption," said Iowa Sen. Chuck Grassley, the ranking Republican on the Senate Finance Committee.
In the past 10 years, tuition alone at Stanford increased from $21,3000 to $34,800.
