Help with Understanding NPC, EFC, Need-Based Aid, and Merit Aid

Paying for College
1

Hi all - I’ve been following recent threads on merit aid at LACs and running NPCs as well. Very helpful. Just want to make sure I understand the way this fits together.

In looking at need-based and non-need based aid (I am equating “non-need based aid” with “merit aid” - please correct me if that is wrong) at a couple of LACs plucked as examples:

Bates: Says about $38K in average need-based aid, and that 0% of undergrads receive non-need based aid

Mount Holyoke: Says about $30K in average need-based aid, and that about 40% of undergrads also receive non-need based aid in an average amount of about $17K

When I run the NPCs for both schools, they spit out an (essentially identical) calculated family contribution. Both Bates and Mount Holyoke then identify the estimated total cost of attendance, which in both instances is higher than the calculated family contribution. Both schools estimate a “Grant/Gift Aid” amount that is equivalent to the gap between the estimated total cost and the calculated family contribution.

Put another way, in both instances the estimated total cost of attendance is covered by the full EFC amount plus the school’s estimated Grant/Gift Aid (somewhat oversimplified as Bates includes somewhat less Grant/Gift Aid and covers that difference with an expected student loan/work amount, but that distinction is not material to my question).

So I take it based on doing that, I have a rough, simplified estimate of:

Total Cost of Attendance
EFC
Need-based aid typically offered by each school to a family with our EFC (the grant/gift amounts that fill the gap between the estimated total cost and the EFC)

If that’s right, what I am assuming from then folding in the info about Bates not providing any merit aid to anybody and Mount Holyoke providing 41% of their undergrads with an average of $17K in non-need based aid is that:

Bates: End of story. Absent outside scholarships, etc., I’ve got the estimated cost and how much they’ll help with it. No additional non-need based (a/k/a merit) aid forthcoming.

Mount Holyoke: Further digging would be required as to how “easy” to get, but there is a chance that my D could be in the 41% who receive some non-need based (a/k/a merit) aid in addition to the need based aid that fills the gap between estimated cost and EFC.

Is that right?

Bonus question: if I am right about Mount Holyoke, I’ve read on other threads that “merit aid gets applied against need first.” Does that mean that the merit aid would first replace the need aid, so that effectively there would be a net financial gain to our family only if my D received a higher merit aid amount than the need-based amount that fills the gap between EFC and estimated cost of attendance?

Thanks so much all!

2

Yes, but remember there are some students who have no need, so those students may ‘do better’ at a school like MHC which would give them some merit aid. The EFC would be close to the cost of attending, let’s say $65k, and if they get no need based aid, getting $15k in merit is pretty nice.

As you said at Bates, if you get outside merit aid, it might just reduce the need based grant, not your EFC, so you may do no better unless the outside scholarship is substantial.

3

You’ve pretty much got it. In most cases any merit aid will just replace need based aid dollar for dollar. If the merit aid is a higher dollar amount than the projected need, you would see a benefit.

If a student receives OUTSIDE merit aid, the school may have a different policy & it will usually be posted on their website.

Sometimes the merit aid might reduce work-study and loans before reducing grant aid. This is often true for outside merit aid, not sure about in-house merit awards.

Keep in mind that non-need aid listed in CDS’s or wherever, may include very specialized scholarships such as athletes, musicians, etc.

4

Terrific, thanks much twoinanddone and alooknac!!!

5

Merit usually does not change based on income (unless it is need based), but it often has a certain GPA requirement to keep it.

6

Also we ran into one school where the merit award specifically could not be used for study abroad, which my D has her heart set on. Not sure if that was knowable ahead of time, but it was noted in the award. D is attending elsewhere.

7

http://talk.collegeconfidential.com/financial-aid-scholarships/1909977-several-questions-from-parent-just-getting-started-p2.html

Go back and read again the responses in your other thread. They will better help you piece together the responses you are getting here.

Re: the net price calculators…are you self employed, or do you own a business? Do you own real estate other than your primary residence? Are the father and mother of this student divorced?

Both Bates and Mt. Holyoke use the CSS Profile for awarding of need based aid. The FAFSA number is not used by them for awarding of need based aid.

8

Thanks mom, alook, and thumper! All helpful info. We are not yet at the granular level on merit aid or particular schools (D is still working on a first list of schools that interest her, rising junior, no SAT/ACT score(s) yet, etc.) and am working on getting some foundations in place for understanding the finance/merit aid angle. In some part for my dear wife and I to be ready to sit down to discuss what we are comfortable with as an approach with our D, and then to be ready for us to sit down with our D fairly early on (as many have helpfully advised), after she has focused on some schools that interest her on paper, to talk about the financial pieces of the puzzle before she gets too far along.

Thumper - Bates and Holyoke don’t have particular import to us at the moment, but your CSS point prompts this questions:

When I use the NPCs for various schools, does the info they have chosen to ask for in the NPC reflect their “CSS” approach for need-based aid? So when they spit out a “Grant/Gift” number (which I am equating to institutional “need based aid”), are you saying that they spit that number out using a CSS approach in the way they programmed their own NPC? Or are you saying, “be careful about the NPC numbers, they are based on a FAFSA approach and Bates and Holyoke really use a CSS approach for determining need-based aid?”

As is so often the case, I may be mixing apples and oranges, and, like my earlier thread, I apologize for the confused nature of the questions!

9

Reports of average aid awarded means nothing.


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Absent outside scholarships

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Outside scholarships can cause your school’s aid pkg to be reduced. Most schools will not let you apply outside scholarships to pay for your EFC.

Outside scholarships can be most useful if the aid from the school is purely merit and the school doesn’t have a “max scholarship” award policy.

10

Thanks mom2!!! Would it be fair to say reports of average (non-need) aid awarded means something when a school reports that 0% of undergrads receive institutional, non-need aid (e.g. Bates)? It seems like if a school reports 0% (so $0 average non-need aid awarded), that means something about the (non-existent) chances of receiving non-need aid (“merit aid”) from that institution. Or are you saying even if a school reports 0%, there actually may be some institutional, non-need, merit aid available?

As to schools, like Holyoke that report undergrads receiving non-need based aid with an average amount, are you saying it’s just the average amount that means nothing, or are you saying looking at the percentage of undergrads/average amount for non-need based aid reported by institutions means nothing in trying to make a rough cut assessment of whether a school awards merit aid and, if so, a rough cut of how widely and “generously”?

Or are you saying none of that and I’m, as usual I’m afraid, off the mark entirely?

THANKS!

11

If a school reports that 0% receive merit, believe it.

12

<<<<
As to schools, like Holyoke that report undergrads receiving non-need based aid with an average amount, are you saying it’s just the average amount that means nothing, or are you saying looking at the percentage of undergrads/average amount for non-need based aid reported by institutions means nothing in trying to make a rough cut assessment of whether a school awards merit aid and, if so, a rough cut of how widely and "generously


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Reports of “average amounts” often mislead people into thinking that they’ll get more than they will.

If a school reports that the average merit award amount is - say - $15k…what is that telling you? What if the school only awards 10 awards? Furthermore…what if the awards range from $2k - $50k. How can anyone guess/assume that their child will even get an award, much less get the “average amount”?

We’ll see people post that X school reports that the average aid pkg is $35k…so they think that means that THEY will get $35k in free money. But what if they don’t qualify for much/any aid? And they forget that often about $7k of any aid pkg consists of loans and work study. So, if they end up only having about $10k of need, not only will they not be getting “the average aid” pkg, but they may only get $3k in free money.

13

Excellent, thanks mom2 for the helpful replies!

My methodology, if it can be called that, at this stage is to be prepared to take my D’s list of schools that interest her and make some initial assessment of “do they award merit aid” and, if so, how widely/generously.

So, as to 0% schools, it is helpful to know that 0% (or other very low percentages) mean what they say, and we could go to our D and say: it may turns out you really like that school as you dig deeper, but we’ve made a rough initial assessment and they don’t give merit aid, so as to that school merit aid is not an option to help supplement what we can afford to pay. Let’s talk about what that means as to whether/how that school should be considered as an option. It won’t be the end of the conversation, but it’s a great piece of the puzzle to have roughed in.

As to schools with non-zero or non-negligible non-need aid percentages and averages, the replies are helpful cautions about jumping to conclusions about whether any student in particular will get merit aid and, if so, how much. As to our D, we of course won’t really know any specifics as to any particular school until the process is much further along - maybe most likely not even until actual admissions decision are made and financial “packages” (if any) offered. But at least the info can help us frame the dialogue as to schools on my D’s list that do give non-need based aid, so we can say hey, it looks like that school does give merit aid to a non-negligible number of students. As you dig deeper on that school, let’s find out what we can about how available merit aid really is, under what circumstances, and in what amounts.

Your replies and those of the other posters helps me figure out if these basic approaches make some sense, and I appreciate the thoughts and helps very much!!!

14

Colleges that claim to meet full need: it is the need as determined by the college. Often it is more than the family is willing to pay or able to pay.

Merit aid works best for “donut hole” families: too affluent to qualify for need based aid, not affluent enough to afford full cost of attendance.

15

Thanks Tom, I think this description is likely to fit us essentially: “Merit aid works best for “donut hole” families: too affluent to qualify for need based aid, not affluent enough to afford full cost of attendance.”

From some limited use of the NPCs, what seems to happen is the schools expect us to pay the EFC (which makes sense) and then provide “need based” aid to fill the gap between the estimated cost of attendance and the EFC to the extent the expected cost of attendance exceeds our EFC (which for these expensive LACs it does). So in that way, I guess the LACs would be considered “full need.”

But the EFC amount is one we need to grapple with. So might qualify the “donut hole” formulation:

“We will look at whether a school offers merit aid, because we are affluent enough to “earn” a high (for us) EFC, and although the school will give need-based aid to fill the gap between our EFC and the full cost of attendance, we’d want to explore whether there is any institutional merit aid available that might reduce the amount we’d be expected to pay notwithstanding our EFC.”

Is that an accurate formulation in terms of whether it is worthwhile for us to at least rough in whether an institution offers merit aid (subject to all the qualifiers in the other helpful post sin this thread)?

16

Even if a school gives merit aid, it may not reduce the EFC, and therefore it will cost you the same amount.

If Bates calculates your EFC @ $35k, and Bates COA is $65k, you will be expected to pay $30k.

If MHC calculates your EFC @ $30k, and the COA is 60k, awards you $15k in merit aid $15k in need, you still need to pay $30k.

Where the merit helps the most is when it is more than the EFC, or when the family would receive little or no need based aid. If MHC is $60k and your EFC is $50k, then receiving a $20k merit award is going to help more than the $10k need based aid.

17

Cool, thanks twoinanddone! Hopefully those that find me too dense or my follow-ups too finely put have stopped reading long ago, but since you seem to be sticking with me…

You wrote:

“If Bates calculates your EFC @ $35k, and Bates COA is $65k, you will be expected to pay $30k.”

Did you means expected to pay $35K (the EFC)?

You wrote:

"If MHC calculates your EFC @ $30k, and the COA is 60k, awards you $15k in merit aid $15k in need, you still need to pay $30k.

Where the merit helps the most is when it is more than the EFC, or when the family would receive little or no need based aid. If MHC is $60k and your EFC is $50k, then receiving a $20k merit award is going to help more than the $10k need based aid."

Makes sense.

As I see it then, Bates’ 0% merit aid means we can say to our daughter, there is no way institutional merit aid is going to reduce what we’ll have to pay to a number below our EFC. The next sentence for our family in a situation like that (“cross it off!” or “let’s keep talking!”) is tbd.

As to Holyoke (as representative of a non-negligible merit aid environment), we can say to our daughter, Holyoke may require us, just like Bates, to come up with our full EFC. But they do give merit aid - let’s dig deeper and see under what circumstances to see whether there is a possibility (and how great a possibility) that merit aid might be awarded in an amount high enough to eat into the EFC.

I realize that we are not going to decode the merit aid mystery as to any particular school with any reliability until much further along and pending much more information about how our D fits or not into admissions decisions of the schools she decides on paper she is interested in. At bottom, I am trying to follow all the good advice on CC about discussing early on with our D the realistic financial considerations that will inform the college decision, and having certainty that schools like Bates won’t give merit aid, and knowing that schools like Holyoke at least might, will help us take the first steps in assessing realistic financial considerations - and maybe dropping some schools off the list for financial reasons BEFORE she falls in love with them. :slight_smile:

Thanks!!!

18

Yes, sorry for the math error.

At schools that don’t give merit aid but do meet full need, you’ll be expected to pay the EFC that that school calculates. EFC’s can vary by schools.

At schools that give merit and meet full need, you may have to pay your EFC, but it depends on how much the merit aid is.

At schools that don’t meet full need, you might pay the EFC, you might pay the full COA, you might get merit aid that allows you to pay less than the EFC. Hard to know unless it is automatic merit aid for stats.

19

Perfect, thanks twoinanddone!

20

If Bates determines your family contribution is $35,000, bates will expect you to pay…$35,000.