Colleges taking another look at value of merit-based aid

Parent Cafe
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<p>The latest installment in the USA Today series on higher education examines the value of merit-based aid:</p>

<p>
[quote]
...Recent decisions by Hamilton and others may be "a sign that people are starting to realize that there's this destructive competition going on," says Baum, co-author of a recent College Report that raises concerns about the role of institutional aid not based on need.</p>

<p>A fast 'merry-go-round'</p>

<p>David Laird, president of the 17-member Minnesota Private College Council, says many of his schools would like to reduce their merit aid but fear that in doing so, they would lose top students to their competitors.</p>

<p>"No one can take unilateral action," says Laird, who is exploring whether to seek an exemption from federal antitrust laws so member colleges can discuss how they could jointly reduce merit aid. "This is a merry-go-round that's going very fast, and none of the institutions believe they can sustain the risks of trying to break away by themselves."</p>

<p>A complicating factor, he and others note, is that merit aid has become so popular with middle-income families, who don't qualify for need-based aid, that many have come to depend on it. And, as tuitions continue to increase, the line between merit and need blurs.</p>

<p>That's one reason Allegheny College doesn't plan to drop merit aid entirely.</p>

<p>"We still believe in rewarding superior achievements and know that these top-notch students truly value the scholarship," says Scott Friedhoff, Allegheny's vice president for enrollment.</p>

<p>Emory University in Atlanta, which boasts a $4.7 billion endowment, meanwhile, is taking another tack. This year, it announced it would eliminate loans for needy students and cap them for middle-income families. At the same time, it said it would expand its 28-year-old merit program.</p>

<p>"Yeah, we're playing the merit game," acknowledges Tom Lancaster, senior associate dean for undergraduate education. But it has its strong points, too, he says.</p>

<p>"The fact of the matter is, it's not just about the lowest-income people. It is the average American middle-class family who is being priced out of the market."

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<p><a href="http://www.usatoday.com/news/education/2007-03-14-merit-aid_N.htm%5B/url%5D"&gt;http://www.usatoday.com/news/education/2007-03-14-merit-aid_N.htm&lt;/a&gt;&lt;/p>

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<p>Thank you for posting this....imo....there is a need for both merit and need based aid. To eliminate one in favor of the other would be a mistake. With even state universities raising their tuition by almost 10% in one year-and earnings not jumping by the same percentage-something needs to bridge the gap for all students.</p>

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<p>Excuse me, but I just snorted milk out my nose. I find it disingenuous, to use a kind word, when financial aid offices talk about "destructive competition". For some reason, I don't think they're talking about students. I just wonder if Hamilton found that the tippy-top students they were trying to buy with merit aid, in the end, matriculated instead at schools higher up the food chain. (There was discussion about this on the Hamilton board.) Hamilton used to state that they were need-blind for all but the last 10% of the class. Now they're eliminating merit aid (and looking a little sanctimonious about it) but they're not stretching themselves to say they'll be need-blind. </p>

<p>Didn't Trinity College (a possible competitor for the some of the same students) just announce they were starting merit aid? They've been need blind and guarantee to meet full demonstrated need for a while. It's curious that two schools operate in the same environment yet choose opposite tactics. </p>

<p>Anybody know how to get milk out of a keyboard?</p>

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<p>Maybe the dog to your right can lick the milk out of the keyboard.</p>

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<p>Capital (as in upper case) idea!</p>

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<p>I don't care what colleges call "the assistance." As long as COAs look like '$44,683 + travel expense' most students will (continue to) require a considerable amount of financial aid in order to attend.</p>

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<p>NewHope, exactly right. Even if a kid got a 1/3 tuition scholarship of 10,000, and COA was 44,000, then that middle class family is going to have to come up with 34,000 for freshman year alone (don't forget those annual increases for the next 3-4 years either).</p>

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<p>"Laird, who is exploring whether to seek an exemption from federal antitrust laws so member colleges can discuss how they could jointly reduce merit aid."</p>

<p>Yes and the oil companies, airlines, cell phone providers, auto companies, and realtors would also like to get an exemption from federal antitrust laws and their arguements for wanting to do so also suck.</p>

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<p>If anything, I would be in favor of options & incentives multiplying, not reducing.</p>

<p>Why just super-reach Military Academies as those where the student pays for the education after the fact, in the form of service? Why not extend the concept to any college, public or private, with repaid tuition in the form of a variety of governmental & government sponsored positions? </p>

<p>A student needing less (but some)gap aid would have a shorter term of service. The payment during the service year(s) would not be zero, but would be low. The idea would be not new taxation, but a replacement of otherwise tax-paid positions with those whose tuition was advanced for 4 yrs.</p>

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<p>Hamilton announced today that it will, indeed, drop its merit scholarship program, effective with the freshman class entering in 2008.
<a href="http://collegehunt.blogspot.com/2007/03/hamilton-college-ends-merit.html%5B/url%5D"&gt;http://collegehunt.blogspot.com/2007/03/hamilton-college-ends-merit.html&lt;/a&gt;&lt;/p>

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<p>Hmmmm.....not boding well for Jr. S who has Hamilton on his short list for his applications next year.</p>

<p>CSS/FAFSA in their great and all-knowing wisdom have decreed us as "having little to no financial need" according to how they calculate things(nope, we don't need to eat, and our tent is just fine). I'm pretty certain most CC'ers fall into that category as well. </p>

<p>So I'm wondering if I should even encourage him for Hamilton, if he's unlikely to get little to no need aid (except for factoring in that we will have 2 in college by then) and now, it appears, no merit aid? Yeah, it's a good school and all, but why bother if we're most likely to be paying full freight? Think we should concentrate on those that do offer the merit.</p>

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<p>Erin's Mom, that's a decision every family has to make for themselves.
If money will be a factor, it's always a good idea to include financial safeties as well as admissions safeties. But, the same principle applies to both: don't add a safety to your list if you wouldn't want to attend. It's not a safety in that case. Make sure you love your safeties, be they admissions safeties or financial ones.</p>

<p>Regarding Hamilton, according to their own figures, they were only giving out merit scholarships to 3% of each class. So, they weren't exactly generous with merit money to begin with. If you're going after merit money, look for the schools that give awards to a significant (at least 10 to 15%) percentage, and pay attention to the "average" award.</p>

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<p>"David Laird, president of the 17-member Minnesota Private College Council, says many of his schools would like to reduce their merit aid but fear that in doing so, they would lose top students to their competitors."</p>

<p>True, but it's even worse than that. The battle for the top colleges, among strong students, is also waged because that's where the bucks are-- even not for the neediest of students. The fewer financial options that are offered by colleges other than the "elites", the more that the elites will be flooded with applications. This is very bad for admissions in general. So if you want to attract top students, let alone ensure a strong yield, it seems to me that you need to have a variety of financing options for a variety of EFC's.</p>

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<p>
[quote]
So I'm wondering if I should even encourage him for Hamilton, if he's unlikely to get little to no need aid (except for factoring in that we will have 2 in college by then) and now, it appears, no merit aid?

[/quote]
If there's just no way you can afford to send him to Hamilton, I suggest telling him now, so that he can take it off his list and look for more affordable options. IMO, it's best to tell your child how much you can afford to spend for college each year, and let that be a major factor (I would even say the major factor) in the college search.</p>

<p>Like so many parents, we couldn't cover the full cost of attendance at a private school, though the FAFSA and Profile results indicated that we could. Fortunately, that left our kids many options - in-state publics, oos publics, and schools that offered merit aid. One child chose an oos public, one a partial merit scholarship; both were very happy with their decisions. We'll give child #3 the same guidelines: "we can put X dollars toward college for you every year."</p>

<p>I never want to have the discussion that starts with "But why did you let me apply to Harvard if you knew you couldn't afford to send me?"</p>

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<p>I wonder how long the colleges will continue to decrease merit aid after the # of students applying to college decreases starting around 2011.</p>

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<p>Re: Carolyn's post that only 3% were receiving merit aid - I'd like to know how many they offered it to. It could be that they aren't getting enough takers to make it worth their while to continue to run the program and have an opportunity to make an announcement that will garner them some positive press. </p>

<p>College admissions has me very cynical. I just don't believe these decisions are made altruistically. And I have the same question as NSM. After 2011, the admissions world shifts and if we can say anything with certainty, it's that colleges change - look at Harvard and Princeton dropping EA, Yale going to SCEA, and on down the line. They're constantly fine tuning and when the population of students decreases, someone's got to pay (at least something) for all those climbing walls, relics of the early 21st century building boom.</p>

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<p>lefthand, Your thoughts were exactly the same as mine as I was reading through this thread. I wonder if many of the most highly accomplished kids that were offered the merit awards headed to an Ivy for example. I don't even think that half tuition for a couple of dozen kids was that great of an offer anyway. What would half tuition be, maybe 15,000 off a 44,000+ bill. 29-30000 is a lot of money to pay. Perhaps many of their top students got free rides elsewhere. Frankly if they were giving these scholarships to 20-25 people, I don't see much money in the pot to disperse as financial aid anyway (350-400,000 more) for an entire school's population is not exactly a huge sum of money. I arrived at that estimate by mulitplying 25 by 15,000.</p>

<p>I do remember reading that the rationale that merit aid at many insitutions is that it is awarded as opposed to financial aid b/c it makes the applicant "feel good" about their accomplishments. I guess they should no longer "feel good", LOL. I always thought it was awarded in part as a lure, b/c the schools have an idea about what % of students on average can keep it, and many will not make the grade to hold onto it. After one is at the school, and loses a merit award, the school can then meet some of financial need with loans rather than merit aid grant money. JMO.</p>

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<p>But folks, there may be more to the story. Somebody needs to check.;) </p>

<p>Hamilton had 3 basic scholarships. One was for recipients from several states (Ok, Tx, one of the Carolinas, and a few counties in New York). It was a pure merit scholarship. The second was also a named scholarship but was available without the geographic limitations. It was also a pure merit scholarship. The third scholarship was the Hans W. Schambach which my daughter received. </p>

<p>While it was considered as a 1/2 tuition "merit within need" scholarship it in fact came to be much more for our family with some "found" need. (The merit portion would continue to exist, even if the student no longer qualified for aid.) Like several scholarships I have spoken of before (see preferential packaging), this scholarship ended up having a "no self help" feature which added several thousand dollars to the effective need based grant . It gave us the no loans and "merit $ even if no need in the future" protection. They also were very generous with their determination of our need. (I can't remember their device. They either raised COA to raise the grant by loading everything they could think. Gave her special research money. Or gave her a travel award in cash. I think it was all of the above.) The amount our family would have had to come up with after our "need" award was $10k/year less than Yale and Amherst. </p>

<p>If your kid is very interested in Hamilton and is likely to be one of those kids for whom Hamilton will be dangling bait, I'd do some checking around. Especially for someone with little to no found need. It wouldn't take much found need to be a big help. IMHO, that "named" money is still going to be there somwhere in some guise. ;) </p>

<p>Hamilton is an exceptional school and would be a great choice. </p>

<p>Edit: Before someone asks ;) , D did not attend Hamilton as it was still five figures a year more than Rhodes. D felt that was too much for the differences in the schools.</p>

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<p>to echo NewHope & northeastmom, I find it revealing that this article about merit aid vs. need-based aid fails to even mention skyrocketing costs. Perhaps that's why merit aid has been growing so fast. Studies and statistics aside, Hamilton's merit aid decision apparently came down to, "discounting the price for families that don't need financial aid doesn't feel right anymore." Hamilton, to their credit, has met 100% of demonstrated need to their students. The same is pretty much true for the ivies and a number of other elite and well-endowed LACs: 100% of need met.</p>

<p>I am a free-market higher education advocate, in terms of academic freedom, admissions, and aid. Schools should be allowed to pursue directions they think are beneficial to the mission of their institution. I have no doubt Hamilton is acting in what they feel is the best interest of their institution. Other schools offering merit aid are doing the same. The statement by Laird, "No one can take unilateral action", is simply untrue. (Isn't that what Hamilton just did?) He might as well be saying, "Damn, I wish reality were different." It is no different than Best Buy, a Minnesota-based company, saying, "I wish we didn't have to use discounted prices to attract customers", but that's the reality. Competition is a good thing in my book, and I'm not exactly sure to whom merit aid competition is "destructive". To those advocating elimination of merit aid I would say, tell me you goals before you tell me it's destructive. It may be your goals, rather than your characterization of the awarding of merit aid that I disagree with. Merit aid provides motivation to excel athletically, musically, academically, etc., in order be rewarded with merit aid. That too is a good thing.</p>

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<p>Being fairly new to this process, it is safe to expect that "grant" monies would be approx the same every year? I ask because one school did not give merit but a huge grant, and if it is not available after the 1st year, we would really be scrambling for our child to remain there.</p>