In a significant move, Stanford University has reaffirmed its commitment to legacy admissions for the fall 2026 intake. This decision is poised to impact the accessibility of one of Silicon Valley’s key talent sources. Additionally, the university is reinstating standardized testing requirements, mandating SAT or ACT scores for applicants for the first time since 2021.
As reported by local news sources, Stanford’s dedication to legacy preferences is so strong that it has opted out of California’s Cal Grant program. This means the university will forgo state financial aid rather than comply with new legislation that prohibits legacy admissions. Instead, Stanford plans to substitute this funding with its own resources.
The implications of this policy extend well beyond the university’s campus. Stanford has been a crucial launching pad for numerous tech innovators, including the founders of major companies like Google, Nvidia, Snap, and Netflix. By maintaining legacy admissions, children of Silicon Valley’s elite may continue to enjoy preferential access to a network that has fueled multiple tech revolutions.
The reintroduction of standardized testing adds another layer of complexity, potentially benefiting students who can afford test preparation resources. While proponents argue that this upholds academic standards, critics contend that these decisions contradict the meritocratic ideals often associated with the tech industry, as they reinforce existing inequalities.
Last year, Stanford announced its reversal of the 2021 decision to eliminate standardized testing as a requirement for applications. The continuation of legacy status considerations was disclosed recently in updated admissions criteria.
These policies are particularly significant given the financial reliance of universities on alumni contributions. Donations from former students are a vital source of funding for educational institutions, especially those in the Ivy League. For instance, Princeton University reported that nearly half of its donations—46.6%—came from alumni during the 2022-2023 academic year.
At Stanford, the majority of donations are allocated either to annual giving, which supports immediate operational costs, financial aid, and various programs, or as contributions to the university’s substantial endowment. This endowment, managed by a dedicated company, typically disburses around 5% of its value each year to support university operations, accounting for approximately 22% of the overall budget.
As universities face increasing financial pressures, the reliance on alumni donations becomes even more pronounced. Recent federal policies aimed at higher education have introduced unexpected budget challenges for institutions like Stanford.
Recently, Stanford confirmed plans to permanently lay off 363 employees, representing nearly 2% of its administrative and technical staff. This decision was attributed to ongoing economic uncertainties and anticipated changes in federal policy, including a significant increase in endowment taxes from 1.4% to 8%, as part of recent legislation.
This tax hike alone is projected to cost Stanford around $750 million annually.