College students and parents looking to choose a college likely to award them sufficient grants can ask the college’s financial aid office these important questions:
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Financial Aid Question 1. College policy on student loans:
Several schools, including Amherst College in Mass. and Pomona College in Claremont, Ca., provide enough grants and work-study jobs to meet a student’s need. Others, such as Oberlin College in Ohio and Wesleyan University in Middletown, Conn., say they will provide enough grants so that low-income students don’t have to borrow, while others will be expected to take out modest loans. Still other colleges offer aid packages that include federal student loans of up to $7,500 a year.
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MORE >>>> http://globaleducationsearch.com/financial-aid/important-financial-aid-questions/
Tuition at many public colleges and universities is skyrocketing, thanks to state budget deficits that have choked off funding for higher education.
The University of California, for instance, estimates a 30 % increase in the 2010 – 2011 year. “California’s $20 billion deficit will make it hard for the [ state's ] legislature to provide funding to the schools,” said Patrick Lenz, UC Berkeley’s budget administrator.
Next year’s tuition numbers aren’t final, since many states are still hashing out their budgets. But one thing is certain: Rates are going up, and the schools that will be hit the hardest are in the states that have seen the worst of the economic downturn.
For example, the Universities of Nevada, Florida, and Washington, each estimate that their tuitions will jump 10% to 15% next year.
MORE >>>> http://money.cnn.com/2010/02/24/news/economy/public_tuition_soars/index.htm?section=money_pf_college
Our family qualifies for zero financial aid, despite my making a vwey modest salary and having to spend half of it on the family’s extra medical bills (not covered by insurance). What kills us is that we are not in debt…go figure…
As a result, not only are we spending retirement savings on private college tuition for the kids (at a time when I could be laid off at any minute, and when my spouse has been out of work for years), but there are virtually no jobs available on campus for them to help pay for it because they are all earmarked for students on financial aid.
By contrast, my daughter’s roommate in college last year, daughter of African immigrants, gets aid, received summer school coaching and pre-teaching at the college (not open to students like my daughter) before her freshman year (along with a bunch of other entering freshman from disadvantaged backgrounds) to help her manage the difficult course curriculum at their Ivy. Not only was it easier for her to get into the school, but it will be less burdensome for her parents to keep her there. She’s a perfectly affable kid, but not in the same league academically as mine. Of course, I am probably just an overly doting mama and a tad envious!
What upsets me is that either my spouse and I will face an impoverished old age to keep the kid in school (I try to have faith that I will be able to work until I am 90 as I love my kids and education is our highest priority) or the kids will have to take on so much debt that they will have to choose their future professions based chiefly on making enough money to pay off huge loans. Given the insecure job market, nobody has any security these days, but nobody in my family is mercenary and I don’t want them becoming so.
By contrast, my English nieces whined about the expense of college in the UK (a few thousand a year), but graduated virtually debt free. One is now a pediatrician, the other a barrister, and they make little money but are very useful and love their work, and do not have to worry about paying back hundreds of thousands of dollars for their education. If they have children after they marry, they will be able to afford to stay home and raise them properly for the early years, as they will not have huge student loan payments to meet. They, like my kids, were stellar students and also creative and altruistic,
In the old days, all of them would have received merit scholarships (as the British ones did).
One of my kids has actually got a merit scholarship, but it only covers less than a third of the cost of her college.
You may ask why not send them to state schools? Well, both are quiet, somewhat introverted and deterred by the gigantic anomic state school they got into (one with a free ride). With less challenging course, less interesting peers, and a much more oppressively heavy drinking social culture.
What bothers me is the social engineering that now seems to drive the attitude towards who should pay tuition and how much. Interesting that recent immigrants get more money than children whose ancestors fought in the Revolutionary and Civil Wars and others since. That wouldn’t bother me if the process were based on relative academic merit. If it were purely meritocratic, most of the scholarships these days would likely go to Asian students anyway, and perhaps my kids would get them also. But certainly that would not be as unfair as a good student getting nothing, and a less good student getting a generous aid package because of ethnic status.
I don’t want to sound whiney. My spouse and I had three children despite being in difficult career and financial straits, because we love children. We have scrimped and saved for years to be able to send them to good schools. This is not (hopefully) a “Poor me” howl.
But I am staggered by the burden of debt that many middle class kids are going to graduate with at a time when many cannot even find jobs and end up living at home, doing partttime supermarket checker work. And by the insanity of colleges recommending to parents that the parents take out mortgages on their homes to pay for kids’ colleges. At a time when anyone over 40 who gets laid off (as any of us are vulnerable to being these days) will likely never work again, this seems like a recipe for future homelessness.
For the record, I received generous scholarship and loan aid that made it possible for me to stay at my college after my dad was laid off (got a life threatening illness requiring surgery and he recovered completely, but his company felt he would not project the right image after that). No one in my college’s FInancial Aid office would have considered asking an unemployed middle aged man to refinance his house to pay college tuition. Even back then, they knew that over 40 you are dead meat, unless already employed. And I received the highest award in my entering class in grad school (meritocratic), without which I could never have entered a low paying but useful profession like the ministry.
source: http://artemisretriever.blogspot.com/2009/11/why-you-are-about-to-go-broke-paying.html
What’s The Difference?
The main difference between a grant and a scholarship is that a scholarship has far more restrictions placed upon it than a grant. Both grants and scholarships are non-repayable, that is, unlike a loan you don’t have to pay them back when you are done your schooling, which basically means you’re getting free money. So if at all possible, try to get a grant or a scholarship. Scholarships are for specific academic or athletic categories, whereas grants are awarded primarily on financial need only.
MORE >>>> http://globaleducationsearch.com/financial-aid/what-are-scholarships-and-grants/
Stung by the loss of their needed aid money, some UB students are preparing to fight.
Affected students, together with the assistance of SBI Legal Assistance, are looking into taking legal action against the university for a financial aid policy change the university adopted in June.
“I can say that SBI Legal is strongly considering bringing legal action to make the university undo their change and provide affected students with money as soon as possible,” said Brendan James Gilbert, director of SBI Legal Assistance.
Vice provost and dean of undergraduate education Michael Ryan told The Spectrum in its Oct. 9 issue that the shift was made due to a change in federal guidelines.
“We had to make the change in the financial aid policy in order to be in compliance with federal guidelines,” Ryan said. “The federal government has a set of standards for financial aid eligibility and we must follow them.”
Beginning June 13, UB changed its financial aid policy, leaving an estimated 2,000 students without the option of financial aid – meaning that more students than ever before are lacking a means to pay for school.
The new financial aid policy makes it harder for students to be eligible for federal aid. Students now need a 70 percent completion rate, as opposed to the previous rate of 65 percent, and must have within 150 percent of the institution’s required credits for graduation, which at UB is 180 hours.
Also, the calculated number of credits is now cumulative. Previously, only completed credits were taken into consideration for financial aid. Now incompletes, resignations, withdrawals and failures count against the student when calculations are made as to whether to award aid.
UB attributed the change in policy to federal law, stating that it wasn’t the university’s decision but rather something that needed to be done to stay within the guidelines of federal regulations.
However, it was later determined by SBI Legal that the parts of the policy that UB changed were not, in fact, part of the federal regulations.
“Federal guidelines only state general terms for [Satisfactory Academic Progress]. Students only need to be within 150 percent of the required credits to graduate and must comply with the institution’s set percentage of credit completion,” Gilbert said. “UB changed the financial aid policy on its own discretion. Nowhere in the federal guidelines are UB’s new guidelines outlined.”
Legal has received estimates that between $360,000 and $380,000 have been withheld from students because of the policy change.
Students are now looking for a way to make UB accountable for its actions.
“We want to do something about this injustice,” said Rashod Coston, a senior biomedical sciences and psychology major. “It’s not fair and it’s not right. We’re going to fight for the funds that we have a right to.”
If the students and SBI Legal decide to take legal action against UB, they would do so under New York State administrative law, article 78, which is part of the New York Civil Practice Law and Rules.
“Basically there is no broken law or rule. Article 78 just gives you the ability to challenge government officials’ actions in New York and get them in front of a court,” Gilbert said.
While UB hasn’t broken the law or stepped beyond its bounds, the law states that a state agency, such as UB, can be challenged about any decision.
“It’s important that everyone knows how much of a wrong this is,” Coston said.
According to Gilbert, the whole point of taking legal action is to give students a venue to voice their distaste with the university’s policy change in a neutral venue.
“When the court examines [the issue] they may look at [what article 78 states as] ‘whether a determination was arbitrary and capricious or an abuse of discretion.’ If [the court] finds it was, then they might declare that [the policy] should be revoked or changed,” Gilbert said.
SBI Legal is hopeful for a change in the decision, as are students, though they are still in the process of building a case and gathering information.
Affected students can e-mail sbilegal@buffalo.edu or visit their office to file a report.
Students today are getting an increasingly raw deal. The recession has affected young people across the board. Graduating students must contend with serious job shortages across almost all industries, while younger students are being shaken down for even more cash.
Yahoo news reports that the average cost of tuition at a public four year college has risen 6.5% this fall. Their findings are conveyed in the College Board’s “Trends in College Pricing” report, released on Tuesday. The cost of a year at a private college, already notoriously expensive, has risen 4.4% to $26,273.
These prices, while average, are variable. Some students attending schools in California, Florida and New York have seen increases that double the average. However, more positive effects of the recession have been felt; the University of Maryland has frozen their tuition costs and some students found they paid considerably less when factoring in financial aid. When including financial aid, the costs of an average year at college remain higher than last year, but lower than five years ago, proving that the recession may have scared some colleges into cheaper costs, encouraged more students to apply for financial aid or raised the financial aid available. A companion report shows that there were increases in financial aid from the government and after financial aid; community college is virtually free to the 40% of the college popular who attend.
MORE >>>> http://www.top-colleges.com/blog/2009/10/20/up-up-and-away-college-tuition-rising-to-unreachable-heights/
You have a $120,000 college degree and no job. That won’t stop your student loan bills from arriving.
The six-month grace period on student loans for the class of 2009 is about to expire, meaning this year’s graduates will soon start getting their monthly statements. It could be a problem for those who have yet to find full-time work. Others who graduated earlier may also be struggling.
One option for anyone in a financial squeeze is deferment or forbearance, which allow for the postponement of payment under select circumstances.
“These are really important options for people who are struggling,” said Edie Irons, a spokeswoman for the Project on Student Debt, an advocacy group based in Berkeley, Calif.
There will likely be repercussions, but none as damaging as if you consistently make late payments or let loans lapse into default. So if you need extra time to pay your loans, here’s what you need to know.
Who’s eligible?
A deferment or forbearance is a period when payments on a loan are not required, although interest generally continues accruing. The difference between the two is that the term “deferment” is used in specific situations with federal loans.
Most people know federal student loans can be deferred if you enroll in graduate school or the military. But you can also get a deferment for unemployment or economic hardship.
To qualify for the latter, you can’t earn more than $16,245 a year in the continental United States. You’re also automatically eligible if you get public assistance.
If you don’t qualify for a deferment, you might still be able to postpone payments if you’re dealing with health issues or other circumstances. The government calls this a forbearance; private lenders use the term for any type of postponement they grant.
With private loans, the lender has the discretion to grant forbearance.
Sallie Mae, the biggest issuer of private student loans, says its agents interview borrowers to assess whether forbearance is an appropriate solution.
It’s worth noting that Sallie Mae is granting forbearance less frequently than in the past. At the end of the second quarter, 6.5 percent of its private loans were in forbearance, compared to 13 percent the same time a year ago.
Patricia Christel, a Sallie Mae spokeswoman, said the company is trying harder work out payment arrangements rather than immediately using forbearance as a solution.
How long will it last?
Economic hardship deferments are granted one year at a time, while unemployment deferments are granted in six-month increments. You can reapply as needed for a total of three years each.
That means you could get an unemployment deferment for three years, then an economic hardship deferment for another three years. The deferments don’t have to be used continuously.
You could also reset the time limits on deferments if you consolidate a loan, since it’s essentially a new loan, said Irons of the Project on Student Debt.
The terms for federal loans are tailored to specific situations, so there are no set rules on how long they last. Expect less leniency on private loans. Sallie Mae grants them in one- to three-month increments, typically for no more than two years.
What are the drawbacks?
These measures should be used as a last resort, since interest generally continues accruing on the loan.
One way to minimize the financial impact is to pay the interest costs while your loan is in deferment or forbearance. Otherwise, it will be added to the loan amount and push up what you ultimately owe.
For example, let’s say your principal loan amount is $15,000 with a 9 percent interest rate.
Your monthly payments after a 12-month deferment would be $207 if you didn’t pay interest during the deferral, versus $190 a month if you did. That’s assuming you’re repaying the loan over 10 years.
The exception is if you have a subsidized federal loan, which is when the government picks up the cost of interest on the loan while you’re in school.
The government will also pick up the interest costs during a deferment on these loans, although it won’t for a forbearance.
Are there other options?
One alternative is picking a payment plan that reduces your monthly bill. Of course, this means it will take longer to pay off your loans, which in turn pushes up how much interest you pay.
Another relatively new option for federal loans is the Income-Based Repayment program. The program caps monthly payments at 15 percent of your earnings above a certain threshold, currently around $16,000. Those who earn less than that may not have to make any monthly payments.
Any debt remaining after 25 years is forgiven. Eligibility is determined by weighing your debt level against your income. A calculator at www.ibrinfo.org can help assess whether you qualify.
You can also change payment plans with private loans. Or your lender may be willing to rework the terms of your loan, perhaps with a lower interest rate.
What if i ignore bills?
The benefit of getting a deferment or forbearance is that your loan remains in good standing, and there is no impact on your credit report.
Otherwise, federal loans usually go into default if you don’t make payments for nine months. Sallie Mae says its private loans typically go into default after seven months.
Either way, a default sets off a chain of repercussions. It’s a black mark on your credit report, meaning it will be difficult for you to get a credit card, mortgage, or any other type of loan.
In default the entire balance of your loan becomes due. Your loan might be turned over to a collection agency, and you’ll be liable for the costs of collection.
Your wages could also be garnished, and your tax refunds could be intercepted. Student loans typically aren’t discharged with a bankruptcy, either. And once the loan is in default, you can’t get a deferment or forbearance. So don’t let it reach that point.
source: http://www.chron.com/disp/story.mpl/business/6673798.html
Here’s the deal that states, which rolled out these 529 prepaid college savings plans, generally offered parents and grandparents: They could lock in tuition at public universities for the current rates even if their children were still in diapers. So if a couple bought a semester’s worth of tuition for their toddler, it would still cover a semester’s tuition years later when the child was finishing his college applications.
But what’s happening lately to these sure-thing 529 college plans is ugly. Almost all of them are now experiencing serious financial trouble. The college prepaid plans are being smacked around by a double whammy: rising tuition at state schools and sinking stock prices.
When tuition at state institutions was rising slowly and the financial markets were prospering, the states could turn a high enough profit to meet the tuition obligations. But today, according to a story in The New York Times, 16 of the 18 state 529 college prepaid plans are underwater.
The South Carolina and Alabama plans appear to be in the worst shape; the two states only have enough assets to cover 66% of their tuition obligations. Many other states have shortfalls ranging from 10% to 20%. Florida, which operates the nation’s largest state prepaid college plan with 850,000 participating families, is also a ticking time bomb. The Florida Legislature is allowing its state universities to hike tuition by up to 15% annually for the next five years. It’s hard to imagine how the state will meet its tuition obligations to all those families when nearly all its 592 money is invested in bonds.
And here’s more bad news: While many parents assumed that these education funds were a sure thing, it turns out that only five states offer a tuition guarantee to all those nervous parents.
While all the troubled 529 plans are state programs, there is also a private prepaid college program called Independent 529 Plan, which has 275 private schools participating including Princeton, Notre Dame and Stanford. According to Thomas Kepple, who is president of Juniata College (my daughter’s school) and one of the creators of the independent plan, the private schools are assuming the investment risk so families don’t need to worry. “In a good investment period a college would get more than current tuition so over time the theory is that it will all even out and our parents will get a tax wise way to save for college with a guarantee,” Kepple observes.
Considering the grim news regarding the state programs, what should parents do? I asked Mark Kantrowitz, who heads up FinAid.org, for his take. Here are his recommendations:
If a child will be enrolling in college within a few years, parents should probably continue investing in their prepaid 529 plans since there should be enough money in the state coffers for these teenagers. For younger children, Kantrowitz recommends investing in a regular 529 college savings plan. If you’ve already got cash in a prepaid 529 for little ones, he suggests that you could be better off moving the money into the more popular 529 college savings plan.
source: http://moneywatch.bnet.com/saving-money/blog/college-solution/a-college-savings-account-disaster/892/
For parents who think they are doing the right thing, financially, to prepare for their children’s college years, there is a troubling article in today’s Times by Sean D. Hamill.
It points out that most of the nation’s prepaid college investment funds, offered by 18 states, are in trouble. Those funds pledged to cover the cost of attending their state’s public colleges and universities, regardless of how much tuition increased.
The funds — not to be confused with 529 college savings plans that do not promise a specific return —are facing two problems: their investments in the stock market have declined sharply in value and the tuition at most public colleges has been rising much faster than in the past.
Even with stock market gains since March, the losses have forced some programs, like Pennsylvania’s and Washington’s, to impose new and higher fees that could amount to thousands of dollars a year in additional costs to parents.
Others, like South Carolina’s, have developed doomsday scenarios, capping how much a family would get if the program shut down completely. West Virginia had to pump $8 million into its prepaid program to help restore its financial health because its fund lost 25 percent of its value in the last year. And Alabama closed its program to new enrollees because the fund lost almost half of its assets — more than $300 million — in the stock market in the last year, and the state might have to put its own money in to keep it solvent.
“I think ultimately more and more of these plans are going to close down to new investments,” said Mark Kantrowitz, the founder and publisher of FinAid.org, a financial aid Web site.
The article points out that no investor has lost money in the plans, but that some states may have to kick in state funds in order to meet their obligation to achieve a set return on investments.
Mr. Hamill spoke with a family dealing with what has happened to such funds:
Ganesh Seshadri has invested $200,000 in Pennsylvania’s fund, which has lost about 25 percent of its value. He is philosophical about the fund’s losses, which have not affected his investment, though he has stopped investing in it because of the increased fees and costs imposed recently.
“If I get back the return they promised, it will be a good investment, because all of my other investments tanked,” said Mr. Seshadri, 55, a hospital computer analyst in Murrysville, Pa. He has children at Northwestern University and Carnegie Mellon, and one in high school.
Source: http://thechoice.blogs.nytimes.com/2009/10/05/troubling-news-about-some-prepaid-college-tuition-savings-plans/
Legislation is moving through Congress that would entirely reorganize the student loans market, and Stanford’s financial aid offices are reacting.
The loan reform legislation, entitled the Student Aid and Fiscal Responsibility Act (SAFRA), passed the House of Representatives on Sept. 17 by a 253-171 margin. While the bill must now move through the Senate, SAFRA appears likely to become law in the near future.
SAFRA would, in addition to other educational initiatives, transform the landscape for student lending. The bill would do away with the current system of private, though subsidized student lenders, by ending loans originated through the Federal Family Education Loan Program (FFELP). All loans would subsequently be originated through the U.S. Department of Education, known as “direct lending,” removing bankers and other non-governmental lending institutions from the student loan equation. Direct lending exists currently, but previously has not been the sole lending process.
Director of Financial Aid Karen Cooper said the effects of the legislation would be more significant for Stanford’s graduate population because the financial aid office no longer expects that students will take on loans as part of their financial aid package as of 2008-09.
“It’s particularly for the graduate students that we’re involved with the loan programs,” Cooper said, “although undergraduates absolutely do borrow and take advantage of the federal programs as well.”
“[Many] graduate students, especially at the masters’ level, are using the federal programs to borrow their entire cost of attendance,” she added.
While the bill would increase funding for college students, there would also be a significant reduction in choice, with the Department of Education serving as the sole lender. This would eliminate Stanford students’ ability to find their own deals and lower rates than the one provided by the government.
Cooper noted that Stanford students had, in the past, been desirable customers for lending institutions, due to perceived responsibility and an expectation of steady employment. Jack Edwards, director of financial aid at the Graduate School of Business, said the lack of choice could be a potential long-term drawback for business students, who had often negotiated rates lower than the government’s in the years before the current economic downturn.
“Our MBA students are willing to take on more risk in search of lower rates,” Edwards said.
Cooper also had concerns about the loss of choice. “I’d hate to see the program entirely go away because I think that it did do great things for our students for a long time, and really forced both our lenders and the direct loan program to provide a better level of customer service for students,” Cooper said. “Competition is healthy.”
Cooper nonetheless said the reform was, on balance, a promising step.
“Their hearts are in the right places,” she said. “We need simplification of the loan programs. Having four major loan programs to choose from is confusing to people when they’re in repayment, and, in a way, centralizing everything in the Department of Education is good.”
A switch, even without legislation?
Whether or not SAFRA passes—and the exact timeframe for its implementation—is still unclear. However, despite the outcome, Cooper said she and the University’s other financial aid administrators were likely to make the transition to direct lending regardless of the legislation’s passage.
“We have pretty much decided, regardless of what happens with the law, that we’re going to make the transition to direct lending,” Cooper said. “And we’re going to aim for next summer whether we’re required to or not, though if we weren’t required to, it would give us more flexibility to do it when we’re ready.
“We may still change our minds,” she added, “but we’re investigating that, and we’re very interested in that.”
Cooper said a prime motivation came from a growing decline in the quality of the current student loans market. “The lenders are backing out, making changes to their processing, and at this point I think the level of customer service that we’re able to offer students is suffering,” she said. “What we have to work with, the direct loan program is a better option for students.”
Administrative Transition
For financial aid offices, the shifts involved in SAFRA would require Stanford to make a significant transition.
“Stanford has been a FFELP school,” Cooper said. “So, for our Stafford loans, PLUS loans— both parent and graduate PLUS loans—students when they take those programs use a lender to fund their loan. So they’re choosing between several different, any, lending institution who participates in the program, to get their funding.”
On the administrative end, Stanford has one significant advantage over many other American universities. Cooper pointed to management resources already in place across all facets of Stanford financial aid that are already equipped for the change.
“We’re not in bad shape to do that because, as a large institution, we already have a robust student administration system in place,” she said.
Edwards added that Stanford’s software put the University in a better position than smaller private universities facing the same transition. Cooper said that while the process will be a handful for staff, she is confident the transition would be managed effectively.
“We’ve been seeing this coming and we’ve been planning for it, so I’m not concerned that we won’t able to get it done,” she said.
The context for SAFRA and the desired transition to direct lending, however, is heavily affected by the economic downturn. Edwards said the current environment marked a low point for private lending, and expressed worry about a loss of potential opportunities in future years.
Cooper echoed this worry. “In five years from now, if things have changed in the economy, if the banks are in a healthier position, might we want to make a switch back? Maybe.”
Professional Schools
The legislation will also have particular impacts on student populations at Stanford’s three professional schools—the Schools of Business, Law and Medicine—in addition to diminishing choice for loans, which Edwards pointed to as a particular issue for business school students.
Judith Romero, associate director of media relations at the Law School, raised concerns about whether removing the core business of prior student lenders will impact funding availability when the government will not step in to provide. She cited the example of loans for law students during their time studying for the bar exam, which can be as high as $15,000.
“Will private lenders continue to offer this loan if they are to discontinue the bulk of their student lending programs?” Romero wrote in an email to The Daily. “If not, some mechanism will have to be put in place for students who need financial support during bar exam study.”
Martha Trujillo, director of financial aid at the School of Medicine, said the legislation would be a net positive for students, and would eliminate a barrier to a medical school education by strengthening financial support for students.
Perkins Loans
According to Cooper, the effect of SAFRA remains unclear on Perkins Loans, a cornerstone of financial aid.
Currently, the Perkins loan is the first-choice loan for low-income students.
“It’s the simplest loan,” Cooper explained. “Stanford acts as the lender. They are federal funds, it’s a revolving loan fund, so that students who are in repayment—we loan their money back out to new students.”
Depending on the bill’s final language, Perkins loans could become less friendly in their provisions, and may also begin charging students interest while they are in school.
“That would definitely impact students,” Cooper noted.
Pell Grants
According to Cooper, about 13 to 14 percent of the Stanford undergraduate population is typically eligible for Pell Grants—funding intended for low-income students. The amount Stanford receives is normally $5 million a year. In its current form, SAFRA would provide approximately $40 billion in additional funding for Pell Grants, and Stanford would see an increase in available funds.
Cooper said she expects that Pell Grant funding would increase by a number in the hundreds of thousands of dollars. “The increased Pell Grant funding will help. It’s just a question of how much of an impact it will have,” she said.
Cooper added that the effect on students would be minor.
“To the student, whether the money comes from Pell or the money comes from the University, it doesn’t make much of a difference; they’re still going to be fully-funded whether they’re eligible for a Pell Grant or not,” Cooper said. “That’s $5 million that we don’t have to give with institutional funds, so we can spread that out to other students.”
source: http://www.stanforddaily.com/cgi-bin/?p=1033582