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<p>True, most publics don’t meet 100% of demonstrated need, but at the top schools it’s pretty close: According to Kiplinger’s data, the percentage of need met by the top 5 publics are:</p>
<p>UVA 100%
UNC Chapel Hill 100%
Michigan 90%
UC Berkeley 88%
UCLA 81%</p>
<p>Since Michigan in particular seems to give a fairly high percentage (42%) of OOS students non-need-based gift aid (i.e., merit scholarships in one form or another) on top of the 40% or so who receive need-based aid, I’d say it’s worth applying and seeing what the financial package looks like, instead of simply assuming you won’t get anything–or won’t get enough. To reiterate, the idea seems to be widespread on CC that OOS students get shut out on financial aid at the top publics. In fact, they’re putting millions of dollars on the table. If you don’t claim it, someone else will. Maybe you can do better at a private school. Maybe. But you won’t actually know unless you apply and see the numbers.</p>
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<p>As for the idea that all this financial aid is going to dry up—I seriously doubt it. I don’t know much about the finances of the other top publics as I know about Michigan, but there two factors that will continue to push strongly in the direction of continued financial aid. First, for OOS students in particular, financial aid is really just a form of tuition discounting. Michigan gets 35% of its students from OOS. The full sticker price of an OOS tuition is 3 times that of an in-state tuition. Do the math: that means if everyone paid full freight, the 35% of students who are OOS would produce 50% more tuition revenue than the 65% of students who are in-state. Bottom line, Michigan simply needs a large OOS representation to make its finances work. Of course, not everyone pays full sticker price. Roughly 40% of OOS students get a discount in the form of need-based aid worth an average of $20K; another 40% (probably some overlap) get another tuition discount in the form of non-need-based (“merit”) aid worth an average of $10K. That substantially cuts into the OOS revenue; but they’re also doing a lot of discounting for in-state students. So after all the discounting, when all is said and done they’re still bringing in a far larger net revenue on a per-capita basis and on a cumulative basis from the OOS than from in-state students. If they eliminate or drastically shrink the discounts, they’ll lose OOS students—either that, or be forced to go much further down in the applicant pool to find full-pays, thus weakening their entering class. They’re selling a service. It has to remain competitive in price, as well as remaining competitive in quality. The way they get there is through tuition discounts known as financial aid. They can’t discontinue the discounting policy just because times are tough, because if they did they’d be in even worse financial straits. They may need to increase the discounts to maintain market share—just as many private schools are doing, even though their budgets have also been hammered by drastically shrinking endowments and increased demand for financial aid. Schools don’t give away financial aid out of a sense of generosity when they’ve got scads of extra cash lying around. It’s just a hard-headed, but very straightforward, business proposition.</p>
<p>One other factor: at Michigan, a very large part of the endowment is tied up in special-purpose designated funds, much of it for financial aid. They simply can’t get at the payout from that part of the endowment for any other purpose. Thus endowment payout fuels the discounts that draw the OOS tuitions they need to balance their budget. That won’t be discontinued, because it can’t be.</p>