Stanford Law School is dipping into its rainy-day fund to cover its financial aid obligations to students — the first time it has had to do so.
According to the university’s 2012-13 budget plan, approved by the board of trustees in June, Stanford’s endowment has not produced sufficient returns to fulfill the school’s financial aid commitments. The Stanford Daily first reported matter this week.
Judith Romero, the law school’s associate director of media relations, said administrators plan to use approximately $500,000 from its so-called “unrestricted” fund this year for financial aid. The university is also kicking in to help cover the law school’s financial aid costs — a reallocation that Romero said is not unusual given the centralization of the law school’s budget within the larger university’s.
The financial aid shortfall is the result of a 25-percent decline in endowment returns as well as growing financial aid needs, according to the budget plan. The declining returns cost the school $2 million in expected financial aid funds.
The law school has not cut its financial aid program, which Romero characterized as “the most generous.” Stanford is one of just a handful of schools that only offer need-based financial aid, as opposed to merit scholarships. Students received an average $25,000 last year. (Tuition is $48,870).
The school spends $10.5 million on financial aid each year, about $2 million of which goes to its loan repayment assistance program for graduates in public interest jobs, Romero said.
The percentage of Stanford law students qualifying for need-based financial aid has grown in recent years from 50 percent to 60 percent, and the average award amount has increased by 20 percent, according to the budget plan.
Stanford has launched a $20 million fundraising campaign geared specifically toward financial aid. Administrators said they expected that financial aid needs would grow, and that they hope to bolster the endowment in preparation. The school has already raised $10 million toward that goal.
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