Some endowment funds are restricted-- i.e. named chairs for professors. Those funds are not available to be used for financial aid whether merit or need based. So absolute size of an endowment isn’t always a fair representation of actual monies available for student needs.
Songman- what point are you trying to make here??? Don’t go to a college with a small endowment, don’t expect good aid from a college with a small endowment, don’t be mad when Harvard (huge endowment) gives you zero dollars because you don’t qualify for need based aid???
“It seems to me with a little more digging they could have avoided that issue.”
true!! but it sometimes takes a LOT more digging…
THAT is the reason so many CC posters strongly advise students to #1 - have the $$ talk with their parents early, on , long before they begin to research colleges, AND that all families who will need financial aid run the NPC’s, and ask LOTS of questions about the kind of aid colleges offer.
thats why we are here- .
OP, we are also very unhappy when students apply to schools which they can’t afford. The endowment MAY be one way to help measure that. But the schools that have the best endowments are also the hardest to get in (all reaches). On that basis using the endowment is not necessarily the best way to wrangle scholarship $. That’s one reason many people recommend the Yolasite with assured merit aid and NMF aid. http://automaticfulltuition.yolasite.com/ http://nmfscholarships.yolasite.com/
Some schools may offer merit aid – by which I would mean aid/grants tied strictly to academic performance and not to financial need. The Ivies do not, although I would not go so far as to assert that a given applicant’s academic performance would never enter into an award.
You (OP) may have gotten confused by the terminology a given school used in awarding aid. Dartmouth, for example, characterized D’s need-based financial aid as a “name” scholarship, which made it look as though it was endowed from a specific source and might confuse a casual observer, but it was just an award of X amount from the entire pot of dollars. (That is not meant to seem unthankful to the couple who contributed a chunk of dollars to the college’s endowment for financial aid purposes.)
Whether need based or based on academic merit the college must have the money at the outset. I am not talking about state and federal grants or scholarships that are not funded by the college yet the college dispenses the funds based on the discretion given to the college by the trustees of the scholarship fund. I am talking about actual moneies given to the student from the college out of the college’s funds/resreves…
It seems like simple math to me-. Low money/ endowment = lower grants. But apparently I am wrong.
Need-based aid—> based on demonstrated financial need
Merit aid and need-based aid can both be qualified as “grants” in that (for the most part- federal loans excluded) they do not have to be paid back.
Merit aid and need-based aid can both be termed “scholarships,” depending on how the school wants to do things. Many schools have pots of money that have been consolidated under one need-based financial aid budget. Typically, a wealthy donor will have contributed a sum of money (one of many “pots”) to be used for need-based aid, and a particular student or students will benefit, with the aid designated as coming from the “Joe Smith Scholarship Fund,” or something similar.
I think where OP stirred things up is when he wrote “I always preach that a merit award is somewhat in direct proportion to the size of the college endowment,” because as has been pointed out, many of the schools with the biggest endowments award zero merit aid, and yet those same schools use their huge endowments to award tens of millions of dollars annually in need-based aid.
I’m not sure you’re wrong. You may not have made clear what you were suggesting as a theory, since it got mucked up in the confusion about what type of aid was in question. High endowment = more financial [need-based] aid. Low endowment = less financial [need-based] aid. Fact of life. Harvard = generous with aid. Reed College = not so much (although they’ve worked hard over the years since I graduated to build up the endowment for exactly that purpose.) I would assume the same would hold true for schools that do award merit aid. It would not be a sound practice financially, obviously, to award more in aid than the school’s endowment would yield (and you’d want a safety cushion for bad years). Are we talking anything more complicated than that?
"Low endowment = less financial [need-based] aid. "
correction- lower endowment= FEWER grants[ financial aid that does not need to be paid back ] and MORE loans- money that DOES need to be paid back.
the term “Financial Aid” means BOTH loans AND grants - wealthier colleges can afford to offer more grants and fewer loans to accepted students who qualify for need based financial aid .
Many knowledgeable posters on CC advise newbys to research college financial aid pages carefully so they dont make the assumption that “qualifying for lots of FA” means they wont have to take out loans.
Menloparkmom- I worked with Sally Rubenstone in the past and hired a CC coach- and paid them a fee. That is what I meant by an approved CC coach. I should have asked "are you a CC approved coach or an experienced volunteer/ poster? "
I think a wee bit more spin in necessary in this discussion. Many good points above I will not repeat.
Let’s just do math.
If a school charges 50K a year in tuition and gives an average of 30K in aid (however you define it) the net cost is still 20K.
Another, lesser endowed school, charges 25K in tuition and gives an average of 10K in aid, the net cost is only 15K.
The first school can show it gave 3X the amount of aid per student, but the second school is still 25% cheaper.
Do not confuse lots of dollars with a good deal. This is a shell game played by some schools to inflate their perceived aid. Ultimately, it really costs next to nothing for a school to add some additional students to classes. Space is not entirely fixed at a university. The class size is fungible. Harvard, for example, could offer 100 students (above their class of about 1000) a completely free ride based upon merit. The incremental cost would be food, electricity and a few supplies. Since the class was only going to be 1000 there is no lost income. The original 1000 are treated exactly the same. Very little if any endowment would be required, but Harvard could show it ‘lost’ or ‘donated’ 5MM in aid.
"Ultimately, it really costs next to nothing for a school to add some additional students to classes. "
Not true- If a college does not have the rooms/ beds for 100 + more students they often will have to pay $$ to put them up somewhere. And in places where real estate is really expensive it can cost a lot. NYU is having to put students in a $300/ day hotel this year because they did not have room for them in dorms. . Stanford had do to that couple of years ago - putting students in an expensive apartment complex across from the campus- when more students said “yes” than they anticipated.
My general observation is that schools with very large endowments tend to be generous with NEED-based grant aid, but offer little to no merit aid.
Whereas schools with small endowments tend to offer very little need-based grants but often DO offer some merit grants to entice high-stats students to attend (and pay a discounted tuition as it’s better than none).
In both cases they offer grants, but the schools that can afford it and have a high achieving pool of applicants tend to spend it on applicants who have financial need, not to attract high-stats kids away from other schools.
