USC announces free tuition for low- and middle-income students

The University of Southern California (USC) has announced that, starting with this fall’s class of first-year students, it will waive undergraduate tuition for students from families with an annual household income of $80,000 or less. In addition, the school will drop home equity from its financial aid calculations.

USC is one of the largest private universities in the United States, with more than 48,0000 students. Students come from a wide range of socioeconomic backgrounds, and “31 percent of [USC’s] undergraduate students come from families in the bottom 60 percent of income earners nationwide.” This academic year, USC tuition costs $57,000, with a total cost of attendance of almost $77,500.

The school will increase aid—primarily through philanthropyㅡby more than $30 million annually to give more financial assistance to 4,000 undergraduate students each year. USC says that tuition waivers and increased aid will benefit approximately one-third of incoming students. “This will be a focus of our fund-raising efforts going forward,” said USC spokesperson Eric Abelev.

Substantive aid with branding benefits

Expanding aid for low- and middle-income families has become increasingly popular among institutions seeking to counteract high sticker prices and prevent undermatching, when students choose a school below their potential. In USC’s case, analysts say the policy will help make the institution more competitive with other institutions. “The move comes as the school is attempting to draw students with more socio-economic diversity, competing with both the University of California system and prestigious private universities that offer generous financial aid programs,” writes The New York Times.

Related: UVA to go tuition-free for Virginia families earning less than $80K >

“More students who want to come to U.S.C. will be able to choose that,” said USC President Carol L. Folt, who was hired last year, after increasing the percentage of low-income students at University of North Carolina-Chapel Hill.

Some skeptics, however, have suggested that free-tuition policies may merely be new branding for existing financial aid programs. These programs “basically make clear what the colleges were more or less already doing,” Robert Kelchen, a higher education professor at Seton Hall University, told Education Dive last year. 

Eliminating homeownership for a more accurate wealth calculation

USC followed Stanford University in removing home ownership as a consideration for need-based aid, a change that reflects the skyrocketing cost of living in Southern California. High real estate prices, university officials said, can exaggerate the wealth of low- and middle-income families forced to dedicate much of their income to mortgage payments. “People work so hard to have a house,” says Folt, “and we didn’t want that to count against their chances of having their kids going to the school.”

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