Las Vegas Review-Journal
Stanford blames inflation for highest tuition hike in at least a decade
First, it was gas and groceries. Now, it’s college tuition.
Stanford University is blaming inflation for its largest tuition increase in at least a decade, a 7% hike that will push undergraduate tuition to nearly $62,000 and the total cost of attendance including room and board to above $82,000 in the next academic year.
While colleges around the country are raising tuition higher than usual as they grapple with inflation that soared last year to heights not seen in decades, Stanford’s increase for 2023-2024 is the biggest among major universities. It is more than twice the 3% fall increase at nearby Santa Clara University, which will now cost $58,586. The University of California is raising tuition by 4.9% to $13,752.
Yale University, which is raising rates by 3.9%, still costs a bit more than Stanford — tuition will be $64,700, and with room and board added in, the term will set you back $83,880. Brown University is raising tuition by 4.75% to $65,656. Harvard University raised tuition by 3% last year to $52,659; it’s not clear what’s in store this fall.
“This is a sizeable increase for Stanford in particular, looking historically what they’ve traditionally done year after year,” said Emily Wadhwani, a senior director at Fitch Ratings specializing in the higher education sector where she examines factors that affect the financial health of colleges and universities.
Four-decade-high inflation last year that saw prices reach $7 for a dozen eggs and more than $6 for a gallon of gas have been pummeling university finances as well. Inflation peaked last June at 9.1%, and although it declined to 6.4% last month, remains more than three times the Federal Reserve’s 2% target.
Wadhwani said increases in costs for fuel and utilities, labor and various items affected by supply chain disruptions were driving higher rates of tuition increases across the country.
Stanford’s increase this fall is twice the 3.5% rate of annual tuition hikes imposed from 2013 through 2018. Undergraduate tuition rose 4.25% and 4.9% over the next two years, there was no increase in 2021 but it rose 4% last fall.
By comparison, Santa Clara University did not raise tuition in 2020 and upped it by 4.2% in 2021 and 3% in 2022, the same rate as its increase this fall.
Undergraduate tuition increased by 5% at USC in the current year, totaling $63,468 for fall and spring semesters. A decision about fall tuition hasn’t been announced.
At the state’s UC system, the current $13,104 tuition is up 4.2% from the year before. Under a plan approved in 2021 that kicked in last fall, students are guaranteed that the tuition they pay as freshmen won’t change for up to six more years of study.
The California State University system has only increased tuition once in the last 11 years, a $270 hike in 2017. Annual undergraduate tuition has since stood at $5,742, and will not increase in 2023-24, although schools tack on thousands of dollars more in various fees.
Wadhwani said many students at Stanford and other universities qualify for financial aid and do not “pay full sticker price.” The tuition burden mostly falls on well-off domestic students, international students, who tend to be wealthier, and graduate students, whose tuition can be covered by research grants. About half of Stanford’s undergraduates are from other states and 14% are international students.
And Stanford’s aid can be quite generous to families of modest means. Along with raising tuition, the university raised its income threshold for fully covering attendance costs of accepted students. Those whose families earn less than $100,000 a year would pay nothing for tuition, room and board, up from $75,000, and that those earning less than $150,000 would not pay for tuition, up from $125,000. For the rest, aid is “awarded on a sliding scale based on family finances.”
“We believe these thresholds send an important signal to prospective students and their parents not to be dissuaded by the sticker price of a college education, and to apply to Stanford if they are interested because there is such extensive financial aid available,” Stanford spokesman Stett Holbrook said.
More than two-thirds of its undergraduates receive some form of financial aid, Stanford reports, and 86% graduate without student debt. The university wouldn’t say how many of its 7,761 undergraduates and 9,565 graduate students will have their tuition or full costs covered.
“Stanford is committed to providing an affordable education for all students, regardless of their economic circumstances,” Jerry Yang, chair of the Stanford Board of Trustees, said.