<p>I have a question for those of you that received both merit and financial need money. Did the college/university subtract the EFC from the COA to determine your need award? If so, was the merit award then subtracted from the COA minus EFC amount?</p>
<p>COA minus EFC= Demonstrated need.</p>
<p>With the exception of schools that offer full tution/room board/ books etc. as merit, the EFC is always going to be on you . Even if you have a full tution scholarship, you will still need all of those other things.</p>
<p>The demonstrated need is then met through
Merit money
Scholarships
Grants
loans
Workstudy</p>
<p>Isn't the COA similar to the manufacture's suggested retail price as in purchasing a new vehicle? If so, then the merit award is a discount off of
the COA. Example... If one's EFC is more then the COA, the COA is reduced
by the amount of the merit award. Given that fact, it is only logical to assume that the merit award would come off of the EFC if the EFC is not
equal to or greater then the COA.</p>
<p>The COA as it relates to aid varies from school to school. You would have to ask the finaid reps at the specific colleges. For example, at some schools your merit aid would be subtracted from your need based aid. In other words, you would get less need based aid because you have merit aid. The COA would have no bearing whatsoever on this. At other schools, you can have a combination of merit aid and need based aid as long as it does not exceed the COA. At other schools the need based aid is awarded first and then any merit aid is added in, again not to exceed the cost of attendance. In these cases, for example, a student might be eligible and receive a merit award that pays full tuition. BUT if that same student has significant financial need, their need based award might be the primary award and thus reduce the merit scholarship. You would have to call the schools to find out.</p>
<p>The issue here is one of how the Federal government defines the assistance. I would disagree with thumper's post above (or shall I say add some clarification).</p>
<p>Outside aid is considered a resource and therefore must be taken into account when awarding other aid. Here is an example:</p>
<p>COA -- $20,000
EFC -- $10,000
Grant - $5,000
Loan - $5,000</p>
<p>If a student gets an award of $1000 in this example, something has to be removed to give the student need to receive the $1,000. You cannot simply replace part of the EFC with the $1,000 since then the student would be overawarded ($11,000 of aid with a $10,000 need).</p>
<p>This becomes more confusing with real world situations. If a school doesn't meet full need (in other words leaving $1000 out) then whatever the unmet need is could be filled with outside scholarship without penalty to the family. Many colleges who do not meet full need do not display the calculated EFC, since they do not want to advertise that they haven't met your full need, so you need to ask the college directly what the EFC is so you will know what the impact will be.</p>
<p>To add complexity, there are some programs which are considered "entitlements" and cannot be reduced by outside scholarships. Example: Pell Grants.</p>
<p>Assume a very low-cost school:</p>
<p>COA - $5000
EFC - $0
Pell - $3000</p>
<p>If this person got more than $2000 in outside awards, they could keep them since the Pell cannot be reduced. (By the way, my numbers may be a little off above, but assume they are right for the purpose of the illustration).</p>
<p>For a family with no need, it does seem that the scholarship comes off the EFC, as it should. There is no need to reduce. This is the same for a needy student once all need has been exhausted. Using the $20,000 case above, if the student gets a $15,000 scholarship, then they can be over need as long as there are no need based awards in their package.</p>
<p>Hope this helps...</p>
<p>The COA takes into condieration, Tution, room board, books, Student health (separate from you carrying them on your health insurance plan), travel, misc.</p>
<p>COA- EFC (parents & Students) = Demonstrated Need.</p>
<p>Example: COA=$40,000 -EFC ($10,000) =Need $30,000</p>
<p>As Thumper mentioned, Merit can be a component of your need based aid: </p>
<p>Joe and Willie school of widgets Scholarship (merit)$20,000</p>
<p>Remember even need based financial aid will usually have a self help component for the student in the form of workstudy and a stafford loan)
It would not be a big stretch if the remaining $10,000 could be broken down as follows:</p>
<p>Work Study $2,000
If Eligible Subsidized stafford loan $2,650
Perkins Loan $2,000
Plus Loan $2,000
General scholarship $1,350</p>
<p>Unfortunately it sounds as if a double standard exists relative
to merit aid and one's EFC. A student has no financial need and
the merit aid directly reduces the COA (also knwon as EFC).
In contrast, that student with financial need does not have the
fiscal support of merit aid directly reducing the EFC.</p>
<p>Why not?</p>
<p>Again, I would disagree. The merit aid reduces need first always, and then EFC. In a case where there is no need, there is no need to reduce, so EFC is the only thing that can be reduced...</p>
<p>O.K. Now I am lost. COA =$35,000, efc=$25,000, merit aid =$20,000.How much do I pay? Is this the same at all schools?</p>
<p>Outside aid is can be applied in different ways. If the student has already gotten COA minus the EFC covered through govt and school packages, most often the merit aid will reduce what the school has given in financial aid. Usually it will reduce the self help component of the package first, but there are schools that will reduce the need grants by the merit grants. There are also schools that will reduce only reduce fifty cents on the dollar. And there are also some schools that do not reduce at all (rare). As Thumper posted, you do need to discuss the procedures with the individual schools.</p>
<p>jamimom, I'm talking more about institutional in house merit awards.Not outside sources. Would that differ in analysis?</p>
<p>I think what the OP might want to know is ,if we find a school where D's efc is $25,000 on a $43k bill, can we get out of paying all of that $25,000 by getting a merit aid scholarship from the college for $20,000? Or does that $20k come straight off COA and now "need" is less than zero and the kid gets zippo extra for the merit aid scholarship so why waste the stamp? Figuratively speaking.</p>
<p>The answer is that it depends on the college. I have seen situations at colleges where the merit aid is NOT issued in tandem with the financial aid (bad planning, in my opinion), and adjustments have had to be made in the end leaving a bad taste in everyone's mouth. There have even been posts on this situation on CC. What USUALLY happens, in my experience, with a situation as you have described is that the school financial aid department will come up with a package for $18K with the remaining $25K having to come out of your pocket IF the school provides 100% of need. Then if a $20K merit award is given, it can be handled in any number of ways depending upon how that college chooses to do so. The most common way that I have seen at the top schools that provide 100% of need is that the $20K merit award will replace the $18K of financial aid, and your D now gets only $2K of merit money. The reason for this is that financial aid money at such a school is designated to go for NEED only. If the student gets ANY money from anywhere so that the need is reduced, the award is reduced correspondingly. That the money comes from some other part of the university makes no difference in such a case. This is one possible scenario.</p>
<p>Some other school will reduce the financial aid package 50 cents on the dollar by the merit award, thereby allowing the student to keep half the money, or some other formula can be used. Another college may be generous enough to let your D keep the entire merit and need awards. If the $18K need award included loans or workstudy, you could make the decision to now decline those awards, or such a decision may be made for you. It is truly up to the individual college.</p>
<p>In my day things were different. It was entirely possibly for a need student to "make money" on college. I did. I received a number of outside awards along with a generous financial aid package from my school and ended up with a tidy nest egg as a result. This can still happen for student who get merit awards exceeding COA, but rarely does it happen for financial aid kids. Yes, it is unfair that the rich get richer. We know a Rockefellow scion who got a nice merit package, and I assure the student did not need a dime of that money. My son who has not applied for any financial aid received a couple of merit offers as well. My daughter won a full ride last year. And we do not qualify for financial aid. Had we qualified and gotten any need packages, they would have been reduced the awards that have been mentioned. That is just the way the system works. Now, again, I do caveat all of this with a reminder, again, that it does depend on the college. But colleges that are hurting to give 100% of need are just not going to let a financial aid recipient make money off of a financial aid award. Merit is a whole other department. Many colleges do coordinate any merit awards through financial aid so that awards are not given and then reduced.</p>
<p>Several years ago, a friend of mine went through the mill with this. With 2 kids in college and some temporary financial issues, they were so tight on money and really wanted their D to go to the state U as she had received a very nice grant and a state award as well which would have reduced the cost to nearly nothing. Well, her favorite college which was a high cost private came up with a very generous financial aid package which with the outside scholarship would have come to just a bit over the cost of the state school. They turned down the state school, and made the commitment to Dream U, only to have the aid package reduced at a very late date which was when the financial aid office got wind of the outside money. Well, the school was within commuting distance, so the young lady decided she would live at home and again, though the cost increased somewhat, it was still doable. The college reduced the package even more when they found out she was not going to be residential. After a nasty fight with the school, she ended up at State U sans the state award that she had turned down, and that was that. Still a very sore subject for them. I have seen variations on this theme a number of times. </p>
<p>On the other hand, I do know someone who is getting money above and beyond COA at a school where they are very anxious to have him, a top student who wants a full ride, and is getting a full ride plus. It can happen, but it does depend upon the school. Also as Barkowitz indicated, those students who get the Pell grant do not get that reduced by other aid, and it is possible for those most needy kids to get more than their need in some circumstances. In some of those cases, however, the kid is working and by going away to school, the family income drops. </p>
<p>As to "why waste the stamp?", the answer is that sometimes, yes, you do waste the stamp. But in your particular case, the way I look at it, you do gain at least $2000, which though far less than the $20K, is not chump change. Also if the $18K need package includes loans and other self help components, the grant money may replace that part of the package. Until you know exactly how that particular school treats a merit award, you really do not know how much of the merit aid will go towards COA. And upon the onset of the entire process, it is impossible to figure out how it will all play out. By applying to merit possibilities, you get more options. It does not necessarily mean the bottom line will be less. The question has come up a number of times by those who are applying to scholarships who are also in line for substancial financial aid--why bother if those scholarships are just going to reduce the financial aid of the college. But if a dream school does not give 100% of EFC, and much of the package is self help, those scholarships just might come in handy to make up the gap, a choice that would not be there without the awards.</p>
<p>Thank you Jamimom. Your post says what I was trying to say. Bark...to clarify...I'll use my own child as an example. At one school, the school allowed a combination of merit and need based aid as long as it did not exceed the COA. At another school, the merit aid was reduced by need based aid that was awarded. In other words, need based aid came first and that could reduce the merit award offered. I will say that I know there are students who DO receive a combination of need based aid and merit aid that exceeds tuition/room/board/fees, but that money is in theory for incidental expenses.</p>
<p>I'll gove my 2¢ worth to this discussion:</p>
<p>My S was accepted to two public Big 10 schools, two smaller private midwest schools and one major LAC. As the method of applying merit aid was the same at all five, I'll use one example for all with a twist or two.</p>
<p>Say total tuition was $25k. EFC is $15k The schools came up with a need package to cover $10k. 1st Big 10 gave no merit and came up with a need package for $10k. The other Big 10 school gave merit aid in the amount of $6.5k. It reduced the tuition before any need aid was applied. Need aid was $3.5k, leaving $15k. The LAC and one private gave $8.5k in merit. Merit reduced tution the same as the first, need was awarded at $1.5k. Last private gave $10k in merit. It reduced tuition, which left no need. In all of the above, we were still left with $15k for our EFC.</p>
<p>I actually got into quite a discussion with an admissions officer from one of the schools. My point was that there really wasn't any merit being awarded, as we would have received need based aid to cover the difference. I commented that it wasn't much of a reward for being an excellant student as the average student admitted would pay the saem amount given the same EFC. The admissions officer pretty much said yes that was true, but if we won the lottery our cost would be the same but the other student would pay the full cost.</p>
<p>My D received her first financial aid award letter yesterday.
Private university with COA = $41,500
grant money = $14,000
loan = $2,000
work study - $900</p>
<p>I am impressed with the self-help $$$$$$$ (low loan amount and work study numbers)</p>
<p>Is this a good package? BTW, there is a gap between EFC and award.</p>
<p>It depends, if your EFC is $24,600 then the school has meet 100% of her need. You really have not given enough information.</p>
<p>In this scenario</p>
<p>COA ($41,500) minus EFC ($ 24,600) =Demonstrated need ($16,900)</p>
<p>That $16,900 was met with the following package </p>
<p>grant money = $14,000
loan = $2,000
work study - $900</p>
<p>In this scenario, there is no GAP.</p>
<p>If your scenario was as follows:</p>
<p>COA ($41,500) minus EFC ($ 14,600) =Demonstrated need ($26,900)</p>
<p>That $26,900 was met with the following package </p>
<p>grant money = $14,000
loan = $2,000
work study - $900</p>
<p>In this scenario, you would have a $10,000 GAP.</p>
<p>Remember not all schools meet 100% of your demonstrated need. If there is a GAP, then you have to come up with the $$ (outside scholarships, additional loans, writing a bigger check)</p>
<p>Macattack, in your son's situation, the merit awards did not make a difference, except for the possible composition of the financial aid package. Usually those packages have a self help component, and so with merit money, you can have fewer loans and work study obligations. You can take out your own loans and your student can find his own job on campus on top of the awards. Also, the more your student's package is made up of renewable merit awards, the less it will fluctuate if you should get some windfall, or if your kid earns and accumulates money for the next school year. All of that has to be reported to financial aid, and they do take a nice piece out of it. So, in that sense, you did make out. Them more you get in grants, the better as your (and your son's) future liabilities are decreased, and he has more flexibility in jobs and in future loans. </p>
<p>Also, it appears that all of the school picked gave 100% of need. That does not always happen. If your son applied to schools that did not do this, the merit awards sometimes could take over some of the gap that the school generally has for its students. But, yes, it is true, that few kids who have demonstrated financial need are going to come out with extra money in the deal. That is because of the definition of financial need which includes all income including that from scholarships and gifts to be counted, before the awared is given, and adjustments are made for ANY windfalls.</p>
<p>Proud2bherdad, the package is good if it works for your family and you think it is good. One may think a $40K package is good, but if the total COA is close to $50K and there is no money there and the kid is an integral part of your earnings for your family (say, works a lot in the family business) so you are going to have that gap to fill as well, it may not be a good deal. So it depends on the EFC, but even more importantly on how easily or how painfully the family can make up the gap between COA and awards; forget the EFC. Cuz all that really counts when it comes down to it, is can you get the money without hurting other family members and the future so much. So it is really your call if it is a good package or not.</p>
<p>Thanks to all the posters ... this has been a very helpful thread!</p>