Stanford University has confirmed its admissions policies for fall 2026 will continue considering legacy status, a decision that could influence access to one of Silicon Valley’s most important talent pipelines. Stanford is also ending its test-optional policy, requiring SAT or ACT scores for the first time since 2021.
The university is so committed to keeping legacy preferences that it is withdrawing from California’s Cal Grant program, forgoing state financial aid rather than comply with legislation signed by California Governor Gavin Newsom last fall. The law bans legacy admissions at private universities. Stanford has promised to replace the lost funding with its own resources.
This decision has implications far beyond Palo Alto. Stanford has been the launching pad for countless tech leaders, from the founders of Google, Nvidia, Snap, and Netflix to other renowned CEOs and venture capitalists. With legacy admissions intact, children of Silicon Valley’s elite may maintain an advantage in accessing the influential network that has powered numerous tech booms.
The return of standardized testing adds another layer of complexity, potentially favoring students with resources for test preparation. Supporters argue that testing maintains academic standards, while critics contend that for an industry built on meritocracy, Stanford’s policies represent a step backward—reinstating barriers that may perpetuate inequality.
Stanford had previously announced its decision to reverse its 2021 policy of making standardized tests optional. The confirmation that legacy status will still be considered was revealed this past week in newly released admissions criteria.
These policies take on added significance given universities’ reliance on alumni donations. Alumni contributions are a major financial lifeline for elite institutions. Princeton University, for example, received nearly half its donations—46.6%—from alumni in the 2022-2023 academic year.
At Stanford, most donations go toward annual giving through The Stanford Fund, which supports immediate needs like financial aid and university programs. Larger gifts often flow into Stanford’s massive endowment, managed by Stanford Management Company. The endowment spends about 5% annually on operations, accounting for roughly 22% of the university’s budget.
Universities depend even more heavily on alumni donations when facing financial pressures. Recent federal policy changes have created unprecedented budget challenges for institutions like Stanford.
Stanford confirmed last week that it will permanently lay off 363 employees, nearly 2% of its administrative and technical workforce. Officials cited “ongoing economic uncertainty” and “anticipated changes in federal policy” as reasons. Among these changes is a significant increase in endowment taxes, rising from 1.4% to 8%, included in a recent federal bill.
This tax increase alone is expected to cost Stanford an estimated $750 million annually.