Stanford undergraduates benefit directly from the extensive resources of a research-intensive university, yet the price for their education covers only about 60 percent of the actual cost. The university flourishes because each successive generation ensures that those who follow can obtain the benefits that come from the pursuit of knowledge. A private university, which does not directly receive state funding, must rely on donations from alumni, friends, students, trustees, faculty, and parents to help fill the gap between cost and price, and to make need-blind admissions possible. Tuition is an important, but not the primary, contributor to the educational enterprise at Stanford. About half of the university's annual operating revenue is restricted by law or by donors in how it may be used.
Unrestricted funds offer a vital flexibility in what the university can undertake.
Stanford promotes the public welfare by educating first-rate students who, having been engaged in the search to know, are better able to assume leadership roles in industry, business, government, and in universities themselves. This benefit to society is rarely mentioned in public discourse about the costs of higher education, which is increasingly viewed as a commodity with a purchase price, like a car or refrigerator. Legitimate concerns about access and affordability must not cause us to lose sight of the role universities play in society and their contributions to the great stream of blessings that have flowed to the United States and the world from our system of higher education. Addressing the public's questions How these facts affect Stanford's daily work of attracting the finest students, making it possible for them to attend, and keeping the institution financially sound often is not clear to those outside the university. With that in mind, I would like to answer as directly as possible questions frequently raised on these important issues.