Starting in the fall of 2020, the University of Southern California will begin phasing in a policy that would make tuition free for students enrolling whose family makes less than $80,000 a year. According to the new policy, homeownership would not figure into the school’s policy, which is very good news for many families. In a news release, USC’s President Carol L. Folt is quoted as saying, “This significant step we are taking today is by no means the end of our affordability journey. We are committed to increasing USC’s population of innovators, leaders and creators regardless of their financial circumstances.”
The new expansion of the aid to the student body will mean an increase in USC’s financial aid budget of “more than $30 million annually,” and will service more than 4,000 students. According to the news release, the school believes the rollout of this new tuition plan will impact one-third of the fall 2020 and and one-third of the spring 2021 entering classes. Folt told the Los Angeles Times that she hopes to expand USC’s financial aid packages even more, and hopes to establish goals like loan-free financial aid packages.
The move is impressive in that USC’s endowment does not come close to the powerhouse endowments of schools like Stanford and Harvard, both schools that offer larger financial aid packages. Top universities like Harvard has been considering loosening up, and even getting rid of, undergraduate tuition costs for years now—especially for schools that really bring in their revenues from real estate and other investments outside of tuition. The LA Times reports that while Harvard’s endowment is $40.9 billion, USC’s is $5.7 billion. USC’s share of low-income students last decade was 21%, which was lower than UCLA’s 30%, but higher than Harvard’s 16%.
One of driving factors for USC is the cost of living in and around Los Angeles has gone up so drastically in recent years that students need financial aid just to rent tiny places with roommates. Folt became USC president after last year’s rich kid bribery scandal rocked the school. Offering up more opportunities to students based on merit is a good look for one of the country’s well-regarded higher learning institutes.