For students with need greater than the merit scholarships they won, what's the point?

Paying for College
1

What I mean: If I understand correctly, most schools put need-based aid on top of merit aid, rather than the other way around. So, for a school “meeting all need”, a student who they determine to have $7,000 EFC a year will get the same package whether or not they won a merit package. A student determined to have an EFC a greater than the cost of attendance, however, will have a much larger package with their merit aid.

This strikes me as grossly unfair. I understand that many higher-income families have need greater than what the numbers may make it seem, but the same is also true of lower-income students. I don’t really get why they do this and would appreciate any insight or references to colleges that refuse to participate in this type of financial aid.

2

At most schools, that merit award actually reduces your financial need…and therefore your need based aid is reduced.

Need based aid cannot be given to you to reduce your family contribution. The family contribution is supposed to be paid by your family.

I’m not sure I see this as unfair. The school computes the amount they feel your family can pay. Your aid is usually for amounts not covered by the family contribution.

3

The way I think of it is that the merit scholarship is considered to be like an asset that you’re expected to contribute to your education. Like-

Say, that a COA is $40,000, and your EFC is $7,000. You then receive a $10,000 year scholarship. Now the college expects you to pay your EFC and the value of your scholarship. So, $40,000 - $10,000 = $30,000. $30,000 - $7,000 = $23,000 left over, which would be met with need based aid. Likewise, if one’s EFC was, say, $50,000, it’d be $40,000 - $10,000 = $30,000, which would be covered by the EFC, with no financial aid. In the end, you’re being given free money for most of your COA. I don’t see why you’d expect to be able to just pocket your merit scholarship instead of contributing it towards your education.

4

One benefit to receiving a merit scholarship is that the amount will not be decreased if one’s financial situation changes/improves. My freshman D has a full tuition scholarship with a small amount of need based aid added to it. Our need based aid will likely decrease in subsequent years as our income and assets grow, but as long as D keeps up her grades, we will not have to pay for tuition. So while for this year there wouldn’t have been much difference in what we paid had our package been only need based aid, we know we don’t have to worry about affording the next three years.

And private schools really don’t have to be “fair”, do they? If they wanted, they could only admit students who were full pay. I am very grateful for schools that offer need based/merit aid, and don’t feel entitled to what is really someone else’s money.

5

^^^
Good answer, @Belle315‌.

6

I think the issue the OP was having is that sometimes obtaining a merit scholarship does take quite a bit of effort and what ends up happening is that all it does is offset a need-based scholarship, which can feel kind of like you are on a treadmill. I have seen posts from students and families who are struggling to cover their EFC using merit scholarships but can’t.

That being said, I agree with Belle315 that it’s not a big problem in the scheme of things. Ultimately, financial aid of any kind is a gift and it’s hard to complain about a gift being too small.

7

@irlandaise‌ I don’t expect it to be pocketed, but it makes more sense to give the $7,000 EFC student $7,000 on top of whatever need-based aid they’re getting. Otherwise, the only way it might help the student is that it’s consistent and maybe less loans/work. After all, full pay students are in a sense getting merit aid gifts on top of their financial aid gifts (which is zero) while other students are simply getting the financial aid gifts.

I do expect schools to at least be somewhat fair. I think criticism still ought to be made even if a school can do otherwise, legally speaking. If, say, my parents consistently gave my sister tons of presents on Christmas and I got much less despite being otherwise equal, I would complain.

8

Like I said, there is nothing unfair about expecting the family to pay their family contribution.

9

@thumper1 Then why not give students with EFCs higher than cost of attendance no merit money? Say they won the award but give them nothing more than they would have gotten otherwise, as that is what they’re doing with the less privledged students.

10

So are saying that if your efc is $7,000 and my efc is $40,000, coa is $40,000 and we both work hard and EARN a merit award of $10,000 that it’s not fair that you still have to pay your efc of $7,000 while I now am paying $30,000?

11

Scholarships would reduce your need, however, it would still reduce you loan and workstudy that are still your out of pocket contribution. If you have no loan/workstudy but just grant like my D, then scholarships less than the grant amount would not help you at all.

12

@Mark1965‌ yes that sums it up well

13

I understand the frustration. My D1 got a merit award (from the school) at a meets need/no loan school so it effectively made no difference. BUT I am very grateful for all that she received so she could attend this terrific school!

She also received a NMS scholarship that wiped out her summer contribution and outside scholarships that wiped out her work study and student work contribution. The school really tried to use all the merit she brought to the table but around $8-10k over the years could not be “used” by the student budget (as we had to pay the EFC) so the school “got” that extra $$. I figured they could then use it for other students and I definitely had no problem with that.

In our case I think the merit was a way to attract her (a huge compliment) and entice her to come to the school as the announcement for the merit was prior to the April 1 acceptance date. They flew her out to campus for the merit interview which allowed her another chance to visit. All around worked out perfectly.

The frustration is that if we had been “full pay” we would have paid far less than the EFC and would have been credited all the scholarships she had obtained. I am not frustrated myself - just explaining how one could see it that way.

14

Ibenheim…you might want to consider stopping the counting of other people’s money. Every situation is different…but really, you should concentrate on your own only. If your EFC is $7000 and your family can not afford to pay that, then you need to attend a college you can afford to attend using only the Direct Loan plus whatever aid the school gives you.

Really, that is no different than a wealthier family who also can’t afford their family contribution due to their living expenses, maybe another kid in college, or whatever.

You make it sound like someone with a $30,000 family contribution will have an easier time coming up with that money than a family with a $7000 family contribution. Your logic is faulty. Both will be difficult if the family doesn’t have that money either in savings, current earnings and/or loan potential.

15

So by that logic there should be no merit aid at all, because what would motivate middle class kids to go to college A that’s $40,000 vs college b that’s $25,000, everything else being relatively equal?

EFC is EFC regardless if it’s $0, $7,000 or $68,000. The same formula is applied to every family by FAFSA, and then schools that choose to use the CSS profile to obtain more information to calculate their EFC.

And I agree with thumper1. Families have to make choices about what they can afford to, or are willing to pay. Our EFC for my Ds dream school is $68k. That would require us to remortgage our house, suspend retirement savings, and make other cuts in our lives. We have instead chosen to send our D with a lower COA. She didn’t even apply to schools that offered no merit aid, if the two of you had the exact same stats, you could go to Harvard for $7,000, she would have to pay full price. We are not rich, we have always lived well below our means, saved enough to send each of our children to our state’s flagship public school, paid off over half our mortgage in 10 years but because we’ve spent much less than we’ve made for the past twenty years, have little debt, saved for our retirement, and our kids college funds we are shut out of private schools unless our kids get merit scholarships. I do not begrudge any student their financial aid, but to say it’s not fair that you have to pay $7,000 to go to a school that my kid would have to pay $68,000 to go to is B.S.

16

@ibenheim,
What’s really unfair is charging for a product SOLELY on the basis of income. When u & warren buffet walk into starbucks, starbucks doesn’t charge warren buffet 20X more for a frappucino.

17

Not sure I see how a frappucino can be compared to a college education, on any level. Unless you’re being sarcastic, in which case it went completely over my head.

18

Yes, I was being sarcastic. Yes, I get it that lower income students are resentful of upper income students getting merit scholarships. But just like they tell upper income students who are resentful of Ivy schools not giving merit money, if u don’t like it then don’t apply there.

19

@thumper1‌ "If your EFC is $7000 and your family can not afford to pay that, then you need to attend a college you can afford to attend using only the Direct Loan plus whatever aid the school gives you.

Really, that is no different than a wealthier family who also can’t afford their family contribution due to their living expenses, maybe another kid in college, or whatever."

Of families whose EFCs and other financial calculations are over what the family is able or willing to pay, merit aid helps the wealthy significantly more. Low EFC students may need close to full tuition merit to start getting fin aid packages below the EFC, while high EFC students need significantly lower merit aid to get below the EFC. In other words, it is much easier for a high EFC student to use merit aid to close the gap between EFC/what the family can pay than it is for low EFC students.

“You make it sound like someone with a $30,000 family contribution will have an easier time coming up with that money than a family with a $7000 family contribution. Your logic is faulty. Both will be difficult if the family doesn’t have that money either in savings, current earnings and/or loan potential.”

Yes, a family with a $40,000 EFC paying $30,000 will generally have an easier time than a family with $7,000 EFC paying $7,000. Where is the fault in that logic? Obviously some students have circumstances not accounted for in the calculations, but that’s as true for higher-income students as for a lower-income student. A wealthy family with two students will have as hard a time as a poor family with two students.

20

Look, clearly, you are upset that you didn’t get enough aid to cover your EFC…and any gap the school may have left you paying. You are also upset that merit aid, at least in your case, can’t be used to pay for the family contribution.

You know,it is what it is. You could have applied to schools that allow stacking of merit and need based aid (although this would not have been allowed to cover your EFC).

You could have applied to colleges where you would have gotten Merit aid that, along with the $5500 Direct Loan, would cover your full cost of attendance. If you get a HUGE merit award, that pays for all of your coats, then in that case, your merit could cover your EFC.

But really…do you think it’s easy for a family who has a $120,000 income to pay $40,000 or more lit of pocket? Do you really think that is easier than the $50,000 family who has to pay $7000?

Neither is easy for THAT family in most cases.

And lastly, colleges exoect that EFC to be paid out of savings (past income), current income, and loans (future income).

No one is saying it’s easy to pay the EFC, regardless of income. It is not easy.

But it is what it is.

And as noted above…if you went to a school that meets full need…you would be paying all but $7000 or so to attend in some cases…less actually if Harvard or Yale. If a kid with an EFc that exceeds the cost of attendance gets accepted to these schools…they pay the $60,000 cost of attendance.

That scenerio is as “unfair” as the one you posed.