USC Waives Tuition For Families Earning Less Than $80K

LOS ANGELES, CA — The University of Southern California will eliminate tuition for families earning less than $80,000 annually while also taking home equity out of its financial aid calculations, a move that will open up free tuition to countless California families. The private university announced the new policy Thursday as part of its effort to widen access for more middle- and low-income students.

Tuition at USC is nearly $60,000 annually, making the school largely inaccessible to middle-class families without financial aid until now.

The new policies were announced by USC President Carol Folt and first reported by the Los Angeles Times. They bring the university in line with the public University of California, long known as a national leader in generous financial aid policies and high numbers of low-income students.

"We're opening the door wider to make a USC education possible for talented students from all walks of life," said Folt, who has made access and affordability a key priority since her inauguration in the fall. "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. Investing in the talent and diversity of our student body is essential to our educational mission.

"We really want this to be an institution where great students can attend regardless of their financial background," Folt added. "Education should be the great bridge across income that really is the equalizer and makes our talented, hardworking students able to make real contributions."

With the announcement, USC is following in the footsteps of other elite private universities such as Harvard and Stanford. They provide tuition-free educations to families earning as much as $150,000 annually. But their endowments are far larger. Harvard's endowment is $40.9 billion, and Stanford's is $27.7 billion, compared with USC's $5.7 billion.

The decision to eliminate home equity as a factor in financial aid decisions is a major boon for middle-class California families enduring the affordable-housing crisis. With skyrocketing real estate values, their homes may be very valuable on paper. However, for many families, wages have not kept up with the increases in real estate values, and a family can be barely scraping by despite owning a valuable home.

Folt said she is concerned about access to USC for such families.

She said families work hard to own a home and then find out in the financial aid process that their "home might be the piece inhibiting their ability to put their kids through school."

"That just felt wrong," she said.

Stanford also removed the home equity calculation for the current academic year.

The new policies will be phased in with first-year students enrolling in fall 2020 and spring 2021. USC estimates that about one-third of each entering class of about 3,000 students will benefit from increased annual aid of about $30 million overall and up to $45,000 for each eligible recipient over the course of their undergraduate studies. Transfer students are not eligible for the new initiative but may still receive financial aid under previous policies.

The cost of a private college education has reached staggering heights for many families, The Times noted. At USC, the total cost of attendance for 2019-20 — including housing, food, books and materials — is $77,459, with tuition alone at $57,256. By comparison, annual costs at the University of California total about $36,100, with resident tuition at $12,570.

Currently, USC calculates financial aid packages on a case-by-case basis. About 32 percent of new first-year students receive need-based grants averaging $39,500, and 24 percent receive merit-based awards averaging $20,000.

"A great education should not be limited by the ability to pay," Folt told The Times.

City News Service and Patch Staffer Paige Austin contributed to this report.