Vivian Ly ’16 was raised to make things work. Ly and her four-child family had always managed to get by largely on her father’s wages, until he was laid off in the 2008 recession. When she was accepted to Stanford, with its need-blind and need-based financial aid system, Ly thought the days of just making it work were behind her.

“I almost felt invincible freshman year,” she said.

But as her freshman year progressed, Ly began to feel alienated by her low-income status.  She described a sort of culture shock: she was distanced from a community that she felt tolerated her but did not value her experience or background. In some ways, money had become less of a financial struggle, and more of an emotional one.

“I guess it’s just more of a mental burden,” Ly said of her overall low-income experience at Stanford, looking back now as a fifth-year senior. “Not to devalue it or anything, but just being here — it’s a very alone feeling.”

By the end of her freshman year, Ly needed some relief from the “Stanford Bubble.” She went to Undergraduate Advising and Research (UAR) and to the Financial Aid Office, asking if there was any way for her to take time off. She encountered positive and encouraging rhetoric.

“I talked to them extensively because I was really worried,” Ly said. “It seemed like everything was set.”

Students are guaranteed 12 quarters, although not necessarily four years, of financial aid, so Ly was assured that if she took a quarter off there would be no financial repercussions on her Stanford bill. In fact, UAR encouraged her to take the time she needed.

But when preparing to return to Stanford at the end of her quarter off, she checked her student account on Axess and found a $1,200 outstanding charge for Cardinal Care, which she had been enrolled in as an alternative to Medicaid.

“Oh, shit” was Ly’s first thought. “Where am I going to get this money?” was her second.

Ly ultimately had to take out a loan to cover her insurance. Looking back, Ly feels as though greater accessibility to and presentation of information could have helped her avoid the bill completely.

Ly’s financial narrative at Stanford is not singular. She is just one of many who feel disillusioned with parts of the University’s experience for low-income students.

Bella Smith ’16, whose name has been changed to protect her financial privacy, enjoyed three years of education well-supported by Stanford financial aid.

Since her freshman year, Smith has worked part time out of necessity. This year, she has worked at least 20 hours a week — sometimes up to 30 hours, although this is rare. She enjoys working and is happy that she has been able to stay employed throughout her Stanford career.

However, last November, Smith took a closer look at her 2014 1098-T — the tax document needed to report tuition and scholarships  — and noticed a discrepancy between the amount received in scholarships and grants and the “amounts billed for qualified tuition and related expenses.”

She discovered that nearly $17,000 of her annual financial aid was considered taxable income, due to a scholarship tax on funds exceeding the cost of tuition.

“It was terrifying,” she said.

Smith hired a Certified Public Accountant (CPA) in Oregon, her home state. The CPA confirmed that the scholarships covering room and board were taxable income, but luckily agreed to fix Smith’s previous tax returns at a discounted rate. Smith paid about $400, a fee that may be substantial for many low-income students.

When a taxpayer has paid more money than what is owed to the government throughout the year, the taxpayer has up to three years to file and claim those returns without penalty. However, when a taxpayer owes taxes, fees and penalties begin accruing immediately after the filing deadline on April 18.

While Smith filed on time each year, she did not report her income correctly. She now faces failure to file, late filing and late payment fees in addition to the interest accrued on the outstanding payment.

“This has been a complete nightmare,” she said.

Like Ly, Smith felt her predicament could have been avoided if she had been better informed. Even after her revelations, the only mention of scholarship funds being taxable that she could find on the Financial Aid Office website was through a link to the IRS website.

The Financial Aid Office’s webpage states, “While the Financial Aid Office staff are not tax professionals and cannot provide tax advice, the resources below may provide information you need. We also encourage you to consult a professional tax adviser for your tax-related questions.”

The financial struggles of students at Stanford are just slivers in the woodwork of the nation’s struggle with the cost of higher education.

“We have to make college affordable for every American,” said President Barack Obama in his final State of the Union address in January. “No hardworking student should be stuck in the red.”

Similarly, Stanford’s current President John Hennessy has been a strong advocate for socioeconomic diversity at Stanford.

“From its earliest days, Stanford has had equal commitments to excellence and ensuring access to students from the widest variety of backgrounds and circumstances,” Hennessy told Stanford News in 2007.

At the time, Stanford had just amended its financial aid policy so that families earning less than $45,000 annually would not have to contribute to the cost of tuition, which in 2007 was $34,800.

“Having a student body from diverse economic backgrounds benefits not just the students who receive financial aid, but also the entire student body — enhancing their academic experience and broadening their worldview,” Hennessey said.

Since 2007, Stanford’s financial aid policy has been amended several times, most recently last spring when the University announced that families earning less than $125,000 annually would not have to pay tuition, while families earning less than $65,000 would have no “parent contribution” — no money expected from parents for tuition, room and board, although students were still required to contribute.

Estimated student expenses are $66,696 for the 2016-2017 school year. This includes $47,331 in tuition, plus room and board, books, fees and personal expenses. It excludes travel expenses because these vary by student.

To ASSU Senator Jasmin Espinosa ’18, who is pushing for the University to compensate low-income students for food over spring break when the dining halls close, the financial aid disbursed quarterly is not enough.

“The standard of living that Stanford gives low-income students is very different,” Espinosa said. “That was my biggest disappointment, or disillusionment, with the Stanford Financial Aid Office.”

While Espinosa was unable to receive University funds for her spring break food project, she was able to gain access to ASSU discretionary funds. These funds will at least cover this year’s spring break.

Espinosa is currently working with the Diversity and First-Gen Office to create an application system similar to that of the Opportunity Fund, which awards low-income applicants a stipend for specific events such as traveling for interviews or for covering the cost of medical emergencies. She hopes applications for meal cost compensation over spring break will be made available sometime this week.

By some accounts, compared to its peer institutions, Stanford excels at increasing accessibility to deserving low-income students. However, students like Espinosa believe that the quality of experience for those students wants for reform.

Espinosa maintains that the University is responsible for improving that quality of experience, reflecting on stories of students scavenging for meals from free events when the dining halls were closed.

“I don’t think that’s the way to live,” she said.

“I think the school has a responsibility to these students, and it’s not really coming through,” she continued. “So at this point I’m willing to put forth a short-term position with the hope and expectation that the school will be a little bit embarrassed and take the initiative to then rectify the solution themselves.”

Contact Katlyn Alapati at katlyn ‘at’ stanford.edu.

 

An earlier version of this article incorrectly stated that Bella Smith reexamined her 2015 1098-T, when in fact she revisited her 2014 1098-T. The original article also stated that Smith has worked at least 20 hours per week since freshman year; instead, these hours apply to the past year. The Daily regrets these errors.