<p>Does the awarding merit-based aid actually result in a net financial gain for working class parents who have a moderate EFC? Let's assume a school meets 100% of "need", as many are said to do by the various rating guides....</p>
<p>In this example, the parents' costs do not change. The need-based Aid simply goes down. And even if, as some schools are now stipulating, any type of merit aid is applied first to offset student loans, the student may benefit but parents' costs still do not change. </p>
<p>Need-based Aid is reduced proportionally to the increase in merit-based Aid. </p>
<p>Plus, if merit aid has a GPA requirement...it adds pressure to the student, while need aid simply depends on good ole Mom and Pops' EFC.</p>
<p>I’m not sure I understand your point with this statement. If a student earns merit aid there SHOULD be a GPA requirement in my opinion…After all, this aid is predicated on the fact that they are stronger students than many or most at the school. </p>
<p>Also in your example…please note that very very few colleges meet the full need of students. Most schools would not award a student $20,000 in grants as need based aid (the schools not meeting full need). Therefore, the student would be faced with a GAP..meaning that there would be a difference between the finaid offered, and that students need.</p>
<p>P.S. your EFC is your EFC…it is your expected family contribution and it might not change based on need based aid awards. BUT in the case of merit aid (based on academic records), the family could end up paying less than their EFC for college.</p>
<p>My S’s school meets full need but does not give merit aid. however, he does bet a Byrd scholarship, and though they did reduce his aid by 1500, it came off the loan and workstudy, so he ended up with 1500 more actual aid than if he hadn’t gotten the scholarship–so it was a net gain for him.</p>
<p>The only case in which the merit aid would not benefit the student’s family would be the rare occasion when 100% of the need is met with 100% grant money. Athletic scholarships reguire the studnet to continue playing the sport. Merit scholarships reguire maintaining a certain GPA. Need based aid reguires that your income remains in the range neccessary to be eligible for it. There is a certain symetry here.</p>
<p>But, you know what’s nice about merit aid? - you KNOW you have it for all 4 years. It’s not contingent on anything you, as parents do, (like make more money, win the lottery, get a bonus - lol) but only on what your kid does (keep up his/her grades). And, not all schools require much in the way of grades…(RPI has no GPA requirement at all - and I’m sure there are others).</p>
<p>My Daughters merit aid certainly saves both her and us money. She has a low EFC, her full need was met but this included a fair amount of loans - when her merit aid was factored in the loans were drastically reduced.</p>
<p>Very often colleges that offer merit aid will use it to replace loans or work-study. For example, my d. was admitted to UC Santa Cruz and given a specific need based award that included $4400 in loans and $2200 in work study, and a $9200 grant. Soon after receiving her initial award, she received notice that she had been awarded a Dean’s scholarship of $2000, and that her work study amount was reduced by a corresponding amount. Since work study money isn’t paid out until earned, that was essentially cash in hand as opposed to a job offer. Since I consider work study and loans to be money the student pays (one way or another) as opposed to a gift from the school, that extra $2K a year would have meant a lot – though my d. chose to attend a different school.</p>
<p>So it is far more likely that in the example you gave, the bottom line for the merit aid situation would be:</p>
<p>Also, many private schools use the CSS Profile define meeting “full need” under their own methodology-- but with merit aid they might be willing to go up to the level of the EFC. That’s what happened with my son’s first college – he had been accepted with a need-based award, and then later learned that he had a $2000 National Merit Scholarship. The financial aid office told me that would not change his aid in any way because even with the $2K the FAFSA still showed need, even though the college would not have given us any more via a need-based grant. So in his case, it really was $2K more than we had before.</p>
<p>I think that you understand how this works. One thing to keep in mind is % of need met (and what % are grants, and % are in the form of loans). There are many private schools that meet, on average, 65% (just an example) of financial need. They might offer a large merit aid award, but if the student does not meet the gpa requirement, either the student has to leave the school, or the parent needs to pay more. If the parents are not wealthy there might be a huge gap between financial need and what the college offers in financial aid. This is a pitfall that I would definitely want to avoid as a parent. If the parents have such a high efc that there is not going to be any financial need, one might as well try to get merit aid. If parents have some financial need, then % of need met becomes more important.</p>
<p>Actually, I would be willing to bet that most merit aid is used by middle income students. Consider the following example: two students one wealthy, one middle class are both admitted to Harvard and Duke and both are offered the Robertson scholarship to Duke. The middle class student is far more likely than the wealthy sudent to pass up Harvard for Duke because the money matters more to hiim and his family.</p>
<p>While I think it would be a waste of time for our family to apply for need based ( i.e. 200k gross which is still paying student loans more than 20 years after the fact and supports a “middle class lifestyle in Cal”; try some rough figures on an EFC calculator), the application is required for at least one school DD is applying to for merit aid. I don’t think it’s ever a waste of time to apply for merit aid to a school your child really wants to attend. At the very least it means they become more invested in the financial aspects of her current and near future choices. For my DD would prefer a private that’s a slight academic reach and a greater (but doable) financial stretch, to a public that’s not a reach. She is clearly more invested in her current EC’s than the application provess, but she is going to have to put her “money where her mouth is” ( work on some essays). Does that make sense? I’m not sure it does unless you share similar circumstances.</p>
<p>Thanks shrink. I can relate. My wife and I am somewhat fortunate; We can swing either private or state school for my S. I think he will likely end up at one of his private choices. Cost about 45K to 50K a year; financial aid seems out of the question. Some merit schol. $$ would be nice. He has decent stats, e.g. 1450 / 2230, 4.7(w), etc.. so maybe a few $$ will be forthcoming. If not, that’s life, I guess.</p>
<p>I always recommend folks complete the FAFSA and if needed the Profile at some point. You never know when an unforeseen circumstance (loss of parent income, illness, etc) will put a strain on your finances and ability to pay for college. If that happens, it is better to already have the finaid forms on file so that the school can reevaluate your situation. The last thing you will want to do if there is an issue is complete the FAFSA or Profile. We all hope we won’t have a family crisis, but sadly many students do have these situations each year. Unless you are independently wealthy with trusts set up for your college students, complete the finaid forms (my humble opinion).</p>