Today, the cost of earning a college degree can seem out of reach for many Americans. Over the past several decades, college tuition prices have skyrocketed.
But the "sticker prices" reported by schools don't capture how much it will cost a given student to attend. Private non-profit, four-year schools have some of the highest stated costs. But they also have some of the highest four-year graduation rates and graduate some of the highest-earning students. Many offer generous financial aid.
Overall, the reported tuition at private non-profit four-year schools was an average $35,830 during the 2018-2019 school year. But once grants and scholarships are factored in, the average net price of tuition and fees at these schools is closer $14,610.
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This complex cost structure holds true at some of the most prestigious schools in the U.S., including schools like Stanford University. The so-called "West Coast Ivy League" college estimates that it costs about $74,570 a year for an undergraduate student to attend, but many students end up paying significantly less.
According to Stanford's student budget breakdown for the 2019-2020 academic year, tuition costs $52,857 per year, while room and board costs $16,433 per year.
The school also estimates that students can expect to pay about $1,905, books and supplies that cost about $1,245 and personal expenses of about $2,130. Even without considering travel expenses, these costs add up to an estimated total cost of about $74,570 each year.
Over four years, a Stanford education would theoretically cost $298,280 but many students do not end up paying nearly this much.
Stanford uses an institutional formula to calculate how much a given family is expected to contribute toward educational costs that takes income, living expenses, medical expenses and education expenditures for other family members (like siblings) into consideration.
The school claims that roughly 70% of students receive some form of aid — need-based or otherwise — to attend Stanford. During the 2018-2019 school year, 47% of students received need-based aid from Stanford and paid an average of $13,600 toward their bills.
According to Stanford's website, 100% of parents who make less than $65,000 a year are not expected to contribute to their child's education costs, but that students "will still be expected to contribute toward their own expenses from their summer income, part-time work during the school year, and their own savings."
The average scholarship and grant total for students from families in this income bracket is $74,095 per year, bringing the average net cost to $4,638 per year.
Students from families making between $65,000 and $95,000 receive $65,050 on average in scholarships and grant aid, making their average net cost $9,248. Students from families making between $95,000 and $125,000 receive $57,098 on average in scholarships and grant aid, making their average net cost $16,294.
Even 44% of students from families that make over $245,000 receive some kind of aid at Stanford. The school claims that the average scholarship and grant total for a student from this bracket is $18,926 per year, bringing the average net cost down to $54,383.
According to The New York Times, the median family income of a student from Stanford is $167,500 and Stanford reports that 92% students from families with this level of income received an average scholarship amount of $36,464, which brings their estimated net cost to about $36,856 per year.
The New York Times also reports that 66% of Stanford students come from the highest-earning 20% of American households, and about 17% come from families in the top 1% of American wealth distribution.
Correction: This article originally misstated the percentage of Stanford students who come from families in the top 1% of American wealth distribution. It is 17%.
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