Colleges using merit aid to reduce need-based aid

Paying for College
1

<p>D received a financial aid offer from University of Rochester. Did not receive as much need-based aid as Rochester's own financial aid calculator indicated. But she did receive 10K of merit aid.</p>

<p>There is a statement in the fine print (I am paraphrasing here) that basically says that receiving merit aid may affect how much need-based aid a student may receive.</p>

<p>WHAT!! Isn't merit aid something a student "earned" due to high academics, etc. Isn't need-based aid money that the student "needs" as a result of family finances?</p>

<p>Many schools, including Rochester, have been looking to downplay the role of merit aid, somehow because it isn't 'fair'. Rewarding students who worked hard in high school isn't fair? How about the athlete whose parents can afford to pay for college, but get a free ride because they can throw a ball? How fair is that?</p>

<p>Has anybody else had this experience, where receiving merit aid is used to reduce need-based aid?</p>

2

<p>I've never heard of it working any other way. Once you have the merit scholarship, that amount is no longer "needed", so the need-based aid is reduced. Why is that "unfair"? And that scholarship doesn't need to be paid back, whereas the same amount in "need-based" money could be given as loans.</p>

<p>The nice thing about renewable merit aid is that keeping it is in the student's control. As long as they meet the requirements (GPA, service hours, whatever), they get that amount for 4 years. Need-based aid, however, can change dramatically based on the vagaries of the institutional method and changes in the family's financial status.</p>

3

<p>the amount of merit aid reduces the need -- that is how it works.</p>

<p>for example -- Cost of Attendance at School X is $30,000. Expected Family Contribution is $10,000. Demonstrated need in this case is $20,000 (COA - EFC= Demonstrated Need).</p>

<p>If the student earns a merit scholarship in the amount of $10,000, this is what happens:</p>

<p>COA = $30,000 minus the merit aid means the COA is now $20,000. EFC is still $10,000 so the demonstrated need is now $10,000.</p>

<p>so -- merit scholarships are good because they usually decrease the amount of loans and work-study -- plus, since many school gap (don't meet 100% of demonstrated need) they pay for that gapped amount if you have one. but -- the EFC (what the parents are supposed to pay) will remain the same unless the scholarship is a full ride (tuition, room and board and books).</p>

<p>That is just how the game is played.</p>

4

<p>other way of looking is that your EFC is constant - you have to pay that amount. Merit & Need aids are not comulative.</p>

5

<p>Well, each school has a different approach. I spoke with the fin aid staff at Rochester,last Friday, and while I was not estatic with their answers, they seemed interested and anxious to do what they can within the boundaries to which they must adhere.
I imagine its not much different anywhere else. Although my daughter did get larger fin aid offers from other schools.</p>

6

<p>In our experience Rochester was one school that would not negotiate aid and is also not very nice about it. It is frustrating because some schools do and some don't and you don't know. We went to the finaid office and I held out the packet of offers my d had from comparable schools and the guy actually backed away saying "we don't do that here."
But then a friend of mine whose son was in the same situation was told to write a letter appealing the aid decision. So I called the office and got a very nice lady who confirmed that we could write a letter. So we did. They never responded. Even several days before May 1 when the decisions were due I called and asked if they got the letter and what was their response. They said they would get back to us within a week. Never heard from them.</p>

7

<p>If that's the case, then why differentiate between merit-based and need-based? As I stated initially, merit implies 'earned', and need means, well, 'needed'. </p>

<p>You folks are telling me that nothing lowers the EFC. Then merit is just need-based aid in disguise.</p>

<p>How do some kids get full rides? Aren't those merit scholarships?</p>

8

<p>merit based awards can be given regardless of whether the student shows any need. The parents can be making a million dollars a year and still get a big merit award. Need awards require that the student's family demonstrate financial need to go to school. That is the difference.</p>

<p>and no -- merit based awards are not need based awards in disguise. The student does not have to do anything besides get admitted to be awarded need based aid. Merit aid will usually be based on stats and activities. Need based aid frequently includes work-study and loans, merit based aid is entirely grants. </p>

<p>also -- as far as merit aid reducing the EFC -- it all depends on your EFC. if your EFC is $50,000 and the school costs $50,000, then a merit aid of $25,000 will reduce your EFC by 50%. </p>

<p>But if you have a high cost school with a lower EFC, then you are going to have to pay it.</p>

9

<p>They're not "need in disguise" because of course one can get the merit scholarships even if the family's financial aid calculations show no need (which as we all know may not be true in real life, just in FA speak).</p>

<p>The full rides are in fact merit scholarships. And that's what happens if the amount of the merit scholarship exceeds the family's calculated need, reducing their "need" to 0. </p>

<p>But if it didn't reduce need? Let's say that a kid has a calculated need of $30K. School costs $30K. Kid gets a full ride. If the merit scholarship - the full ride- didn't reduce the need, would you then expect that the kid would also get $30K worth of need-based aid? Of course not. It works the same way for smaller amounts - the merit scholarship itself meets part of the calculated need.</p>

10

<p>Wow--very confusing. Let's see if I get this. Hypothetically:</p>

<p>Assuming school meets 100% of need---</p>

<p>Student A has an EFC of 15K. College costs 45K. Student gets 30K need aid, and pays 15K.</p>

<p>Student B also has EFC of 15K. College also costs 45K. But this student gets a merit scholarship of 5K. Does this student pay 10K, or does the need get reduced by the amount of the merit scholarship (5K) and this student still pays 15K?</p>

<p>In my mind, merit should reduce the EFC because the student is being 'rewarded' with a merit scholarship. Maybe it doesn't work that way.</p>

<p>This is why I referred to merit as need-based in disguise, if it simply replaces need-based aid.</p>

11

<p>No you still don't get it. Both students A&B have loan, work study and self help portion. Merit aid will reduce that portion first....in effect reducing money from your pocket.</p>

12

<p>"Student A has an EFC of 15K. College costs 45K. Student gets 30K need aid, and pays 15K."</p>

<p>"Student B also has EFC of 15K. College also costs 45K. But this student gets a merit scholarship of 5K. Does this student pay 10K, or does the need get reduced by the amount of the merit scholarship (5K) and this student still pays 15K?"</p>

<p>Both student's aid packages will include grants, loans and perhaps work study. The outside scholarship will generally be used to reduce the loans or work study portion of the package (the self-help portion), while the EFC remains the same.</p>

<p>The EFC is calculated by formula, and doesn't change from school to school, or when an outside scholarship enters the picture. Different schools will meet different % of need, but the EFC is a number that remains the same, and may (or may not) approximate the out-of-pocket expense your family will spend for a year of college.</p>

13

<p>EFC based on FAFSA is fixed. But schools who use the CSS/Profile look at different data and may come up with different EFC's. Schools have the ability to add questions to the CSS to mine whatever info they are looking for.</p>

<p>There are many stories out there of kids getting very different financial aid offers froms schools who all received the same financial info. How can that be, unless each decides for themselves what the EFC will be?</p>

<p>Like buying a car--never exactly sure what the 'real' price is.</p>

14

<p>Kinda like buying a car, yes. Different prices for different people.</p>

<p>The FAFSA EFC remains the same. Schools that use Profile schools are free to adopt their own adjustments to the Institutional Methodology.</p>

<p>Schools can adjust their aid package for students they want, considering GPA or other factors, and adjusting the ratio of grants to loans accordingly. EFC remains the same, but the package is sweeter for the more desirable student.</p>

15

<p>
[quote]
You folks are telling me that nothing lowers the EFC.

[/quote]
</p>

<p>Keep in mind that the EFC is your expected family contribution based on the the iparent's ncome and assets along with the student student's income and assets.</p>

<p>YOur EFC will be lowered if:</p>

<p>You have a financial change in circumstances where you now make have/less money (loss of salary, huge medical bills that are not covered by insurance, etc). </p>

<p>You have a second child attending college.</p>

<p>
[quote]
There are many stories out there of kids getting very different financial aid offers froms schools who all received the same financial info. How can that be, unless each decides for themselves what the EFC will be?

[/quote]
</p>

<p>This is exactly what happens, each school decides how they are going to use your financial aid information. remember even in schools that meed 100% demonstrated need all financial aid packaging is not created equal. Some schools have more money and give more grant aid, some schools fill your package with more loans (a school can essentially offer you a PLUS loan for the full cost of attendance and they will have still met your need).</p>

<p>Some colleges have a lot latitude based on the sizes or their endowments and often use their own institutional methodology in determining your EFC where the FAFSA, is pretty more straight forward and uses a federal methodology.</p>

<p>Also different schools calculate or don't factor different things in awarding financial aid and determining your EFC. </p>

<p>Duribg my D's application cycle she got accepted to 7 schools, had 7 different EFCs and none was equal to the EFC on the FAFSA Williams, Bryn Mawr and Tufts were approximately 2,000 to 3,000 LOWER than the FAFSA EFC Barnard, Amherst, Dartmouth, Mount Holyoke were HIGHER than the FAFSA EFC.</p>

<p>What I also saw was $12,256 range in the financial aid packaging from the "best offer" to the offer that she ultimately took. (We used the Williams offer to ask for a financial review more more aid from Dartmouth where D is now attending. However, the williams package was not the overall best package, we were just getting comparing financial aid between 2 comprable schools). </p>

<p>Originally Williams gave more grant money,less loans, a less student contribution, less parent contribution than Dartmouth. </p>

<p>Dartmouth met Williams' EFC, lowered the loans, and met the grant aid.</p>

<p>EFC 2221 lower than barnard
student contribution 585 higher than barnard)
Grant money 7720 higher than barnard
loans 2600 less than barnard
work study 300 less than barnar
total 12,256</p>

<p>difference between Williams and Amherst</p>

<p>parent contrib 2251 higher at amherst
student contribution 975 higher at amherst
grant money 4906 lower at amherst
loans 3500 higher at amherst
Workstudy 100 higher at amherst
11,732</p>

16

<p>Be happy about merit aid. It is usually automatically renewable for 4 years. Need based aid is not. You have to reapply for it, and they can pull it anytime.</p>

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<p>Thanks for all your opinions and insights.</p>

<p>I guess we'll wait for ALL the offers to come n and hope one stands out.</p>

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<p>What it comes down to - is that it all depends on the school. At some schools being awarded a merit scholarship may effect your need based calculation. Other schools treat need and merit as two separate items. This is also true in the case of outside scholarships. Some schools will reduce their contribution by the amount of outside scholarships while others treat outside scholarships as a completely separate entity and will not reduce the school award. Same as grants and scholarships. You always should question are they automatically renewable for 4 years, do they have minimum requirements, are they for the same amount (especially grants) or can they be adjusted up or down. Remember tuition goes up almost evry year - making a tuition (half or full tuition) scholarship more valuable than a dollar amount scholarship. That is why it is important to know the rules at every school.</p>

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<p>I know exactly how you feel. I went to the University of Rochester for my first semester of college. I graduated salutatorian of my high school class with a 1300 CR/Math SAT score and they did not give me a scholarship. I filed an appeal with their office and then they changed their mind and gave me $8,000/year but they reduced my grant money. Essentially, the scholarship only made about a $1,000 difference in total aid. I was stunned that they would take away my need based aid. Needless to say, I transferred after my 1st semester because I couldnt afford the school.</p>

20

<p>Why did you even go for one semester if you knew going in that you couldn't afford it??</p>