I initially assumed YES DEFINITELY, but apparently that’s not always the case.
If a student is offered a certain amount of need-based institutional grant from a college as part of a financial aid package, will colleges guarantee that amount for all four years, even if the family’s income increases?
Here’s our family’s situation:
DS is a rising senior. We’ve run the NPCs for many schools. Based on our 2019 family income, it looks like we would qualify for institutional grants averaging about $30k, bringing the COA for private colleges down to around $40k. However, our income will increase for 2020, and likely continue to increase for the next few years. Additionally, DS will likely do co-ops or internships, adding even more to our family’s income(and since it would be his income, not ours, this would be a larger impact on financial aid).
My question is - will the additional income in future years(while DS is in college) reduce the financial need-based institutional grant that we would receive?
My initial thought was YES - I thought that colleges would recalculate need-based grants each year, based on updated FAFSA and CSS Profile, which could potentially reduce our need-based grant substantially. But I was very surprised to find out that both Northeastern and Drexel guarantee that the student will receive the same grant each year, regardless of increase in income. Is this common? Is there a way to find this information out, without emailing each school individually ?
ETA…please do those NPCs again in early September…as right now they are set for students enrolling fall 2020. By September 2020, these should be updated. Financial aid awarding calculations can and do sometimes change from year to year.
As you have noted, there are a very small number of schools that will guarantee your need based aid for all four years. In addition, there are some where you can pay up front for all four years at the current rate (Skidmore used to do this…don’t know if that is still the case).
However, in the vast majority of cases, need based aid is applied for annually and if your income increases, your aid is likely to go down because you have less need.
But…your kid will be in college for these years using incomes as noted:
2021-2022 academic year uses 2019 (you know that)
2022-2023 academic year uses 2020 (can you project that one?)
2023-2024 academic year will use 2021
2024-2025 academic year will use 2022.
But here is the question…if your income increases, can you dedicate some of that increased income to pay for college costs? That would help.
Check the financial aid page on the school’s website first. I would think that a school that guarantees to maintain at least the institutional need-based aid that was provided in the student’s first year would not be making this information hard to find. If there’s no mention on the website and you want to be sure of the school’s policy, you will be left with calling, emailing or a face-to-face conversation.
If I were you I’d call Northeastern to clarify if it applies even if. your income/assets increase. It wasn’t at all clear to me from reading their description of the Northeastern Promise. It did NOT say, “even if your income and assets increase.” It was kind of fuzzy about that.
I guessed that the vast majority of schools don’t guarantee this aid for all four years, but Northwestern & Drexel were the first two schools I asked, and since they both said that they do, I was hoping it was more common!
I can’t predict what will be happening in 2022, but we have to make decisions based on the information we have right now, which all points to higher income year over year. We have two younger children who will be starting college 3 & 4 years after this DS, as well. As is the case for many, our current EFC is completely impossible for us to pay out of pocket with our current income, so any increase in salary would edge us towards being able to afford it, but if it’s a moving target, then there is no chance.
Right now, DS has 24 schools on his list, which we are trying to whittle down. They fall into the following categories:
4 State schools, with merit, COA should be <$20k. definitely worth applying to.
3 T20 schools, with incredible financial aid, COA $17-$30k (super long-shots, would be well worth the $$). definitely worth applying to
10 T20 schools, with moderate financial aid, COA $30-$45k (still super long-shots, maybe worth the $$)
7 Mid-tier schools, wide financial aid & merit ranges, COA based on financial need $30-$50k. This is the category we’re struggling with. If, with financial aid, the COA is guaranteed to be $30k/year (like Northeastern), then they are worth keeping on the list, and possibly worth the extra $$ over a state school. But, if COA would go up to $45k within a year or two, that is a huge difference, and it might not even be worth applying.
I’m also trying to look into merit scholarships available for these mid-tier schools, but since merit aid would likely cancel out need-based aid for us, it is so hard to figure out. DS has 1540 SAT, 4.0 GPA, so merit is possible, but certainly not guaranteed. Major is Engineering.
Looking into this question(whether need-based aid could go down) is just one part of the puzzle I’m trying to figure out.
The mid-tier schools we’re currently considering are:
Lehigh
Stevens
WPI
Northeastern
Drexel
RIT
RPI
And of course I know all this could drastically change due to COVID-19. But I feel like we still need to make some progress on narrowing down the list!!
I asked specifically about if parent income increases, or student earns a substantial amount of money from co-op or internship, and their response was: "Through the Northeastern Promise, students are guaranteed the same level of need-based grant funding for 8 semesters (4 years) of in-class study. "
But I agree - it almost seems too good to be true.
There are merit grants within financial aid packages that can stay in place regardless of income changes. A school can do what it pleases with its own money. State, federal and other parts of the aid package will have to vary. PELL, for example is very specific about eligibility.
As posted above, financial aid packages generally lag two years behind real time in assessing need. I can see next year, families who did quite well financially in 2019-god income levels that Will tank in 2020. One of my neighbors is almost certainly going to shut down his small but lucrative business that has brought in zero income for the last month and a half, and summer pickings for not look good. The public pool and beach scene here is not happening here. I think an appeal for aid is going to be in order for many families in such circumstances. A number of companies are cutting pay, many families are having to help our family members who may be hit with financial issues… I see a lot of new circumstances developing in real time right now.
I see this for those who are planning to start school this fall too. Income which is the biggest driver of financial aid for 2020 is likely to be much lower than the 2018 pay levels reported to and used by FaFSA. I know a half dozen folks right off hand appealing their packages. I think the SUNYs may be getting a high yield this year if some private schools don’t pony up some extra money.
It comes down to the individual school as to how financial aid is handled each year. Some schools have a policy where a family is told that certain real time changes in income ( say a parent takes on a second job, a certain amount of increase in pay, is supposed to be reported to financial aid with adjustments to fin aid resulting, at least for increased. Other schools just wait it out. A lot of PROFILE schools only ask for FAFSA for years subsequent to freshman year, for returning students aid. I’ve seen that work to an an advantage.
Thank you for the suggestions - I should look into those schools more, but I am hoping he will stay a bit closer to home - we are in NJ.
We have fingers crossed that he will be a NMF - NJ cutoff was 223 last year. He got a 221. Compass Prep is predicting 221, but who knows. He is a getting a College Board Recognition Program award for small/rural towns.
And I know that the pandemic may very well change everything when it comes to merit & financial aid, and so much is uncertain about the future.
I’ve seen a number of schools (including Yale, where my son recently graduated) that promised to maintain or increase the level of funding for the full four years assuming that family finances remain stable or decline.
I’ve never seen a school that promises to maintain need based funding in the face of substantial improvement to a family’s finances.
I would be very leery of taking Northeastern’s assurances at face value. I tried pinning them down through a chat exchange this afternoon, and they kept dodging a direct yes or no answer. All they would do is quote the “Northeastern Promise” which seems to have enough wiggle room to allow them to cut funding in the face of increased income a) as long as they still meet “demonstrated need” or b) cut funding entirely if the student or family no longer qualify for “federal” aid - which could imply that the promise (such as it is) only applies to Pell eligible students.
Yeah, I find this “qualify for federal aid” thing troubling. How does Northeastern define “federal aid”? I consider federal direct student loans, subsidized or not, to be federal aid, and pretty much every U.S. citizen and legal resident qualifies for those.
Oh thank you tdy123! This is exactly what I am worried about. And I feel like it’s not the best idea for us to press the admissions people on questions like these when DS hasn’t even applied or been accepted - the last thing I would want to do is get a black mark against his application for us asking too many questions about money! But it really could make a big difference.
If your student is a NMF, he would qualify for the Benequisto scholarship (I know I didn’t spell that right) which is a full free ride at the Florida public universities.
@twoinanddone can you explain…and put the right spelling!
Agree. The answer they gave you over the phone does not provide additional clarification. I am hard pressed to believe that any college could guarantee the exact same financial aid all four years based upon one year of income. It would be too easy to beat the system. A one-income household bringing in $65k could become a two-income household bringing in $125k the following year.
I’d be nervous about querying admissions very aggressively, but trying to pin down fin aid shouldn’t be a problem. I tried doing that by chat, as I was intrigued by the issue you raised, but were it my child, I’d call directly.
There are two asterisks if you scroll to bottom. “Demonstrated financial need” seems to be key issue. I agree with your original view - if your household income goes up, your “demonstrated financial need” is likely to go down.
See that on campus housing is required for two years. “Demonstrated financial need” is based on Cost of Attendance (COA) of paying for on campus housing. It appears some students seek to reduce COA by living off campus, yet hope to keep same need based grant. From the Northeastern website:
"Northeastern University need-based grant funds are considered tentative until all required financial aid application materials, including any supplemental documents requested by our office, have been received and reviewed.
Eligibility for Northeastern University need-based grant funds is determined in part by the Cost of Attendance, which includes room and board. Incoming, Undergraduate Day students are required to live on campus during their first and second year at Northeastern. If a student’s request to waive this requirement is approved through the Office of Housing and Residential Life and a student will be commuting during their first and/or second year, a review and recalculation of need-based Northeastern University grant funds will occur."
Look into Michigan State Honors. Miami of Ohio, for merit. NC State does a good job also. Iowa State gives a good amount also. I know you don’t want to be in these regions but just to see how some schools do it. University of South Carolina also honors program.
Would increasing contributions to a tax advantaged account be a possible solution? I’m having a similar internal debate about my D21 application process this fall. It seems as if that would keep the additional income off of the FAFSA?
Colleges add it back to your income for the purpose of determining FA eligibility. LOL. They know that trick. They consider ALL contributions to retirements accounts voluntary during college years.