Let’s say a school gives your student merit aid which gets you just below your family’s EFC. Will they also give financial aid? Or is that it? Just the merit.
Merit aid is financial aid, so I assume you are talking about need-based aid. Some schools might go below one’s EFC after providing merit, but most won’t…most colleges want to spread their limited financial aid dollars (whether merit/discount or need based) across a greater number of students. Students can always take the direct student loan each year (provided they file FAFSA) to further bring down the net COA offered by the school.
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The reason public universities have stopped offering affordable tuition is that states have stopped supporting public universities. Tuition was cheap when states subsidized it. But starting in the 1970s (more or less, depending on the state), state contributions to these universities have declined. Now, states might subsidize 25-30% of public universities’ budgets. These universities are basically quasi-private schools, with added pressures to keep costs down and no means to do it.
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College policies on how their own merit scholarships and need-based aid interact vary all over the place.
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Agree with your post but disagree that these universities face ANY pressure to keep costs down. When my state flagship floated a bond issue to build a state of the art athletic facility (ten years after they had already built a state of the art athletic facility) nobody said boo. When a branch of the university decided it needed more dorms (it had been a mostly commuter school), it didn’t build a basic, square building which maximized the number of rooms to serve the largest number of students. No. The first floor is a three story atrium type windowed space. You walk by it and there are what- four students drinking coffee in a space which holds 300 people easily. The building has state of the art facilities, lots of resident parking (in a space challenged city), and the amenities rival a luxury apartment complex.
The public hearing? not one person objected to the costs (this is a public university-- and a not terribly competitive branch facility, not the flagship). Not one. The concerns were all about congestion, traffic, and kids drinking on the sidewalks near a public library.
So I don’t see “added pressures to keep costs down”. I see a LOT of magical thinking about who pays for the bells and whistles, and every year, it gets more expensive and harder for low income families to afford a basic college education.
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I teach at a public university (not a flagship), and we face tremendous pressure from various constituencies – students and families, state politicians, etc. – to keep costs down, even as we are also expected to provide up-to-date facilities. We have the lowest tuition of any 4-year institution in the state and get 27% of our budget from state funding.
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Like the proposed Munger Hall at UCSB?
Keep in mind too that in many states, the new buildings and overall upkeep projects are directly funded by the state even if the overall funding formula that is based on per student numbers goes down. The per student formula can vary from year to year, depending on what the state legislature decides is important. Some years it’s overall enrollment, some years it’s based on graduation rate, some years they want to see more success with transfer or veteran students, etc. The building projects can be a completely separate process, though. Oftentimes, the projects are ranked by the state in order of priority and they may fund say, the top 10 projects in one year. Whether a university has their building project funded doesn’t mean they have any more or less control of their overall budget for other things. I’m sure this can vary from state to state, but in the states where I have worked, this was how it always worked.
It always puzzles me when I read about how state schools were cheap “back in the day.” For those of us who didn’t have any financial parental help, they were NOT affordable. Perhaps they were comparatively less than they are today, but I was not able to afford UMich or Michigan State in the late 70’s. My parents had four in college at the same time, and they couldn’t afford to pay for us (they did cover car insurance & let us live at home during breaks/if we went to commuter school). It wasn’t all sunshine and roses back then, either, for everyone.
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U Mass WAS affordable, even for low income families “back in the day”. It wasn’t called “Taxachusetts” for nothing- if you lived in metro Boston, the Boston campus (which opened in the early 1960’s) was commutable and cheap (and the T had discounted fares for students). If you wanted the flagship, yes, you needed a family contribution, and being so far west the campus wasn’t commutable from the heavy population centers. But I had plenty of HS classmates “working their way” through college- for a Bachelor’s, in four years, working in a car wash, diner, bar (if you were 18 which was the drinking age then), etc. Nobody had heard of internships- work meant figuring out the biggest paycheck. And because of good public transportation in Boston, you did not need a car to get from campus to job back home (obviously, some neighborhoods had better transit options than others. And the further out suburbs-- usually the fancier ones- had “less good” public transportation…)
I think it would take a LOT for a kid to work his/her way through U Mass Boston now with no family financial support. Maybe with a gap year or two to save money?
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University of California system was practically free. So was the University of Texas.
SUNY schools as well. And CUNY schools were basically free as well.
I guess I live in a state that has a history of under-supporting higher education. Maybe being a rust belt state, with a history of jobs that paid well but didn’t need a college degree - and companies that reimbursed employees for college classes - contributed to that. Neither is true anymore, and our colleges still struggle due to inadequate funding.
Merit versus need-based is what we’re going through right now with kids #4 and #5 (twins).
D1., a mediocre but motivated student, graduated from a local private college as an HEOP student through a wonderful state-funded program for low-income students. With 7 in our household, we qualified.
S1 and S2, super test-takers at the top of their classes, did Questbridge and graduated from an Ivy and a great LAC respectively. S1 had no parental contribution and no loans. S2 had loans but only the subsidized federal ones and it was a manageable parental contribution.
Fast forward 5 years and our household size shrunk while our income rose (I went back to work full time). Suddenly it’s doubtful that we will even get a Pell grant!?
It’s a rude awakening.
We’ve saved what we could over the years but it could all be wiped out in the first year.
Question for those with knowledge of this: It seems that schools that use CSS Profile tend to exclude retirement and health insurance premiums from available income. Other schools seem to fold those back into the total as available income. Do others see that?
Since this is a specific question, I think it should have its own separate thread instead of being part of a general discussion about merit vs need based aid.
Ok thanks
As far as I know retirement accounts are excluded as assets for all schools. Certainly from all schools we looked at. Health insurance premiums paid pre-tax from your paycheck won’t show up in your AGI so excluded from income calculations. Not sure what happens with insurance paid post-tax (e.g., if you purchase on your own, not through employer) , but an interesting question since my D is now on the college insurance.
I don’t know much about Michigan State, but Michigan essentially functions as a private university these days. I think their state funding is on the order of 7% or less.* I would imagine that they have been evolving in that direction for a long time due to declining state support. The rust belt explanation makes sense since those states were stressed even before the widespread anti-tax sentiment of the 80s.
- got curious and went to look this up. State funding is 12.9% of the “General Fund” which includes tuition and other direct revenues. But the “General Fund” is only 25% of total funding (Michigan’s huge research grants are in another category, as are athletics and medicine). So state funding is effectively 2.25% of the total budget. Helps to explain their priorities.
https://publicaffairs.vpcomm.umich.edu/key-issues/tuition/general-fund-budget-tutorial/
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Wow, interesting that is so low.
What % of University of Michigan students are from out of state? It is a shame if public universities do not serve those in their state because they need more tuition $ from out of state and foreign students.
At that low of a rate, almost makes sense to just be a private college.
I believe it is about 50% OOS at Michigan. For many prestigious research-focused state universities, they are quite similar to privates in how they operate. I think of it as a different kind of private. While a Princeton focuses on remaining small and elite and delivering an expensive experience (in terms of the resources spent on each student - their aid is generous), a Michigan focuses on giving high-quality education to larger numbers and makes large-scale high impact research available. Michigan State is maybe a better example to show that super-selectivity is not a necessary part of the formula. You can think about it as Fords vs. Ferraris - very different products, but which is better as a car company? Which model of university is better?
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