This is my first time going through the college acceptance process so I my sound naive, but why is it fair that Merit Scholarships reduce a students need based aid?
My S1 has been researching colleges for the last two years. Including running NPCs everywhere. We knew that, at his top choices, the ability to go to these schools would require some additional scholarships money and that nothing was guaranteed. Today we found out that he was accepted to his #1 choice (and accepted in the Honors program to top it off). We immediately went to the Scholarship letter and was very excite that he received a very nice Merit Scholarship. We thought that we could make his dream school a reality. It was only we reviewed his full financial package that we realized all the Scholarship was replace some of the need based Grant aid. All the school is doing is paying with the right hand instead of the left hand. Silly us, we thought that working hard and earning a Scholarship would make his education more affordable. How is this fair?
(Plus, as I read the fine print closer, if he were to apply for and win any other Scholarship, even a local $250 Elementary School PTO Scholarship, his grant aid would be reduced by the same amount! What’s the point?)
First…what is your family contriibution? Also, what college is this? Does the school guarantee to meet full need?
Merit awards actually reduce your financial need…and therefore, they reduce your need based aid awards. Some colleges will first reduce loans and work study…and then grant money.
Your family EFC is usually expected to be paid by your family…as is the student contribution.
And yes…you are required to report any outside scholarships to the colleges.
Could you explain a little more. Were you hoping that your son could use his financial aid to pay your family contribution? Did you think he would get need based aid without any consideration of the merit award?
Some will replace student loans, student work, and unmet need first before replacing need based grants. Others may be less generous. It can also depend on the specific scholarships.
Like I said, I may be naive, but yes, I would expect merit based Scholarship to supplement need aid and lower what we, as a family, have to pay.
I look at it this way, take two students with the same EFC of $30K and our accepted a $60K per year university. One is top 5% of his class, near 4.0 GPA, and high test scores. The other, good, but not great student, maybe top 10% of his class. Student 1 is awarded a $30K scholarship, obstanently for his high adacdemic work. The other, happy to be accepted to a competeive school. However, the university gives them both the the same aid, just labeled different. Why did student 1 work so hard for the merit aid?
For the record, the school is Northeastern. We had run the NPC and found the combined contribution was $35K. He received a $21K scholarship award, $5500 in loans and $7K in grant aid. Of course that grant aid would be reduced if he gets any outside Scholarships.
There are also some pluses to merit aid. It is not tied to income…so if yours goes up…your kids will still get the award.
What was your net cost on the NPC for Northeastern? It doesn’t sound like the net cost was far off from what your student received.
The school would not be giving you aid for your family contribution. You are expected to pay that amount.
Is this an early decision or early action acceptance?
Northeastern meets the full need of accepted students as NEU calculates that need to be. They can meet that need with any kind of aid they choose…scholarships, grants, loans, work study. It looks like the school met your sons need with scholarships, and small grant and loan.
College costs $60k per year. After looking at your family finances, the college determined that your family could afford to pay $20k and the school would provide $40k. Now your child got a $30k merit award. Your family can still afford to pay $20k, the scholarship is for $30k, so now your need is only $10k.
Why do they do it this way rather then just making it all need based? Because the student whose family need was determined to be $0 now gets a $30k discount off the COA. Why is the $250 PTA scholarship considered? Because that is money that wasn’t there when they were determining that the family could contribute $20k, so it’s extra money available to pay for college. Most schools do not meet full need, so even if they determine you can pay $20k and the cost is $60k, you are not awarded $40k in need. You might get $20k, and then have a $20k gap. You also might get $20k and then another $20k in loans, work study, etc. For those students, getting merit awards is helping to fill the gap or with the ‘self help’ of loans.
@thumper1 it was Early Action, so we don’t have to do anything until March/April. We understand now, but I still don’t think it is fair. I look at this way. My older son has a PT job, but my younger son is too young for a job. We will give them Christmas gifts of equal value. We it be fair to reduce my older son’s gifts because he earned his own money and can afford to buy more of his own items. To me, that is what schools are doing. If NEU had not awarded him a scholarship (supposedly for his excellent school work and test scores.), they would have just increased his grant aid. Why even call it a scholarship (which, to me means something that was earned through hard work, whether academics, sports, talents).
@twoinanddone I guess I will never understand how a school can reduce their committed contribution by what the student scholarships are earned outside the college. Why should my son even apply for outside scholarships? Scholarships should benefit him, not the school. But, if all it does is reduce the school aid by the same amount, he is effective earning the money for the college.
Since Northeastern’s list price is $64,720, that means that the net price is $36,720 after applying the scholarship and grants.
So Northeastern can be put in the “stingy” category when a student receiving need-based financial aid also receives merit scholarships. Some other schools replace student loan, student work, and (if applicable) unmet need first before replacing need based financial aid grants.
Are you sure the $7k grant would be removed dollar for dollar? The NPCs are not always accurate for how the schools mix and match scholarships. Would Northeastern have awarded $29.5k in need based aid if no scholarship was earned? It’s difficult to know without having seen a FA award (not NPC).
Even if the entire $7k would be taken away if you get outside scholarships, he may get more than $7k and then you are in a better position than if he didn’t apply at all. Some do feel it is not worth it to apply to outside scholarships if the school is going to provide the full amount of need; it’s up to you to decide if it is worth it. My daughters did go for the outside money as their schools don’t meet full need, but I have heard others who, like you, don’t think it is worth it to spend the time applying if there is no net gain.
i do appreciate the feedback from everyone. I am certainly not trying to be argumentative.
I will state part of my frustration is that NEU was one my son’s very top choices. We didn’t go in to his application process completely blind. We knew that NEU would be nearly impossible to afford, if he didn’t get additional aid (which we assumed merit scholarship were for). Finding out he was admitted today, with Honors no less, was a thrill for him. If he had been admitted, but not received a scholarship, it would be different.
But, finding out that his $21K scholarship was really just part of the same aid package we were expecting, has made this school, most likely, unaffordable. That is a shame. And has put a big damper on what should be a proud achievement for him.
@tribruin As another family that can in no way come close to paying their familial contribution, I am sorry that you did not understand this going in to application season. I give college application talks locally and it is one of the topics ai make sure to emphasize bc it is so often misunderstood. If misery likes company, you will unfortunately have a lot of people joining you in the next few months.
It really takes going down in selectivity to find generous merit scholarships that surpass expected contribution. Does your son have applications in at schools where guaranteed merit will make them affordable?
It is what the college kicks in to help the student attend after all other resources are considered.
Most colleges that award merit money combined with need based aid will reduce the student’s expected loan and work study burden, if the college meets full need, and that creates a net benefit to the student, who still has the option to borrow money and work for pay even if not required by the college.
But need based grant aid from the college is only intended to meet need.
I think your perception of things as being “unfair” is looking at things backwards – as if the need based money comes first and then merit money should be added on. But that would mean that some students got grant money that exceeded their actual need. And that simply is not what the need-based aid is intended for.
Need-based grant aid is essentially charity, not an entitlement.
Merit money does not depend on financial need. While it does not seem fair, it does make sense in a way that schools would reduce need-based aid by the merit amount as your need is reduced because your costs go down. The real problem is that the formula schools use to determine need is flawed and suggests families should be able to pay more than they feel comfortable paying. Not because they live a lavish lifestyle, but simply because life is expensive and they want to retire some day.
Finding this out made me less willing to support local scholarships that are needed-based as that money would essentially reduce the need-based money the student with financial need would get. It may reduce loans in some cases, but seems like my contribution is not really helping the student.
@Mom2aphysicsgeek Fortunately we do have some other options, as a NMSF (and assuming a NMF) he has already been accepted at several schools with either Full Tuition (ASU w/ Honors) or Full Ride (UCF) scholarships. We visited ASU and really like the school, so we know we have some good options. They were just not his first choice.
@calmom You are definitely right, I was thinking about this the wrong way. It has, unfortunately, been a slap in the face for our family. I will always have a huge regret in my life that we were not able to put away almost $300K to pay for my two sons education. But, I still feel that scholarships (specific merit/talent/athletic, where the student had to earn it) should be used to reduced the students/family cost of attendance FRIST.
@mom2and – your rationale about not supporting local scholarships is misplaced because the majority of colleges and universities do not meet 100% need. So many of the students applying for local scholarships are attending colleges that aren’t offering them any college grant money at all – just loans and federal aid like Pell grants-- and those students are helped tremendously by any extra source of funds. This is true for the vast majority of students, most of whom are likely to attend public institutions and could definitely use the extra support.
@tribruin As trite as it sounds, most kids end up blooming where they are planted. CC is a huge bubble. Come spring the number of kids who can’t go to their first choice school due to finances is significant. The FA forum will be full of posts similar to your own bc people are trying to process how merit aid really didn’t change anything or their FA package has left them unable to affor the school. Your confusion is shared by many, but it is the way most top schools do treat merit.
I am glad he has good financial options. It might not seem like it now, but they are a huge blessing. My current college student attends Bama on full scholarship. When he first started applying to colleges, no way did he see himself attending Bama. But, you know what, he visited multiple times, met with the dept, sat in on classes, and by March, he ignored the rest of his schools and knew that was where he was going to attend bc the rest were going to require our paying room and board at minimum. He has never looked back. He loves it there. He jumped in with enthusiasm and has grabbed every opportunity it has to offer. He has made wonderful friends and he has great mentors in his professors.
2nd, 3rd, even a 6th choice school can end up being the place that they are glad they landed.
As noted above, some colleges do apply merit scholarships against the expected student contribution (i.e. student loans and student work expectation) first. However, they still tend to apply them against expected family contribution last.