Merit vs. Need-blind marketing

<p>Has anybody else noticed the difference in marketing once the acceptances have been received? We have received many warm letters and publications from the schools that offered my D merit aid. Makes you feel wanted. The highly selective schools accepted her, but she has only received the welcome letters and some letters from the multi-cultural reps. I guess the merit schools have to charm students to go to more rural locations, harder academics, etc. The selective schools just seem to be "take it or leave it." I guess they are so desirable they don't have to give the hard sell. I am warming up to the others though, and it's not just the money.</p>

<p>The answer daughter of my friend received when she asked at a selective school about merit aid: "Well, all of our students would earn it." They don't offer it because they don't need to, but then my friend's daughter interpreted this answer as arrogant and chose another college.</p>

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<p>Honest inquiry: What should the school have said instead? The bluntest truth, which would have been, "Most admitted students think we're worth $100,000 more than the schools that do give merit aid," would surely have seemed even more arrogant.</p>

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They don't offer it because they don't need to.

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<p>Actually, I only know of about five schools that don't need to offer merit aid discounting to attract the students they really want. There are a couple dozen schools that need to offer it, but don't. </p>

<p>In this case, the reason really is the principle of the thing. There are only "x" number of dollars and every dollar that is used for merit aid is a dollar that is NOT available for need-based aid to lower income students. </p>

<p>I don't know how much longer the few remaining need-based aid schools can hold on to their principle. They lose a LOT of students who would be perfect for them.</p>

<p>BTW, technically even these need-based aid schools are offering merit-discounts to their students. Swarthmore, for example, spends $66,000 per student per year on undergrad education. So even a "full-fare" customer is not really paying the full cost of goods solds.</p>

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The selective schools just seem to be "take it or leave it."

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<p>I can't speak for all schools, but there is a very strong hesitation against the hard-sell at Swarthmore. They really do take the approach that, if it is the right school for you, then they would love to have you. But, if it's not the right school, then that's OK, too. The admissions Dean would like to be more aggressive, but it's just not in the school's culture. </p>

<p>I mean, at last year's Ride the Tide, one of Swat's favorite professors talked to the specs about reasons why Swat might not be the right school for some of them! Not flippant stuff, but detailed specific examples of students who would be better served by a different kind of school. I'm sure the Admissions Dean wanted to shoot him, but that's just the way the place is.</p>

<p>"What should the school have said instead?"
I think the answer was given in a subsequent post:
"In this case, the reason really is the principle of the thing. There are only "x" number of dollars and every dollar that is used for merit aid is a dollar that is NOT available for need-based aid to lower income students."</p>

<p>Often it is not what is said but how it is said. Mark Twain's wife once repeated back to him word for word the line of expletives he had uttered after cutting himself shaving. Twain responded, "You've go the words right, my dear, but you don't quite have the melody."</p>

<p>"
I can't speak for all schools, but there is a very strong hesitation against the hard-sell at Swarthmore. They really do take the approach that, if it is the right school for you, then they would love to have you. But, if it's not the right school, then that's OK, too. The admissions Dean would like to be more aggressive, but it's just not in the school's culture."</p>

<p>Same yadda-yadda at Williams, and Princeton, and virtually every other top college we looked at. If they act like they don't care, it is because, honestly, they don't. They know, down to science, that they will get the class they want in any case.</p>

<p>I guess my point is that somewhere in all that hard sell that they do PRIOR to acceptance they should emphasize that you should not apply if you don't qualify for need-based aid and don't have the wherewithal to pay full freight. They gloss over that to get more applicants. As soon as they realize you are one of those unfortunates, they lose interest fast.</p>

<p>With all due respect, Princeton provides a calculator so you can figure your "discount" ahead of time and decide whether its to your liking. I would assume you could use it for Harvard and Yale too, although few other schools are as well endowed and it might not prove accurate. </p>

<p>A lot of parents have acheived some of [if not far beyond] what some people believe they are earining with an elite degree. Perhaps they don't think its worth it to them......which is their perogative. Meeting full need is a question of values.</p>

<p>Mini:</p>

<p>I agree on a macro level. However, I don't view the personal letters D received from the President of a merit-aid college any less cynically.</p>

<p>On a micro level, the adcoms, especially at the smaller schools, are not acting that cynically. They do develop an atttachment to "their kids" and don't like to lose them, especially a URM kid. The motivation may be statistically driven, but if it were just that, the Dean of Students wouldn't be able to rattle off application essays.</p>

<p>Pattyk:</p>

<p>I understand your frustration. That's why I view the whole process as a game of strategy, or a car buying exercise. The merit-aid versus need-aid strategy is so fundamental that it is probably best made up-front, i.e. once I decided on a price range for a car, I didn't even look at pricier stuff. </p>

<p>The good news is that you have nothing but fantastic choices. You've already won the game big-time, no matter what decision you guys make! I mean, think about it. You have every base covered and are in the enviable position of weighing a number of great schools, each offering something of real value: a terrific merit-aid package, terrific locations, terrific campus cultures, and so and so forth. The beauty is that you guys get to decide how to prioritize the various strong points. Lots of families are not in as enviable position. Your choices are so fantastic, I can't even recommend one over the others because personal issues would have to be the deciding factor.</p>

<p>I guess the only thing that could be better would be if you could mix and match, taking the merit aid package from one school and combining it with the best features of another. But, hey, what fun would that be? If all the schools offered exactly the same strong points and had all their seats on the plane sold, none of them would need too offer a merit-aid discount! As Mini would tell us, they aren't doing it just to be nice. It's a discount fare to get you to buy an empty seat on the plane.</p>

<p>Interesteddad notes,"
I don't know how much longer the few remaining need-based aid schools can hold on to their principle. They lose a LOT of students who would be perfect for them."</p>

<p>Actually you make a good point. If a school offers a lot of merit based aid, which CMU and Wash U did in the past, they raise the average SAT scores of the entering class and beef up the competition for good grades in the school. Merit based aid really does help a lot of schools play the SAT score game. Need based aid may or may not help depending on the scores of the needy applicant. It may help, however, in achieving diversity goals. </p>

<p>If some schools were really smart, they would certainly want to boost up their merit aid and thus boost up their reputation among applicants. This is one marketing play that has been shown to work historically.</p>

<p>
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A lot of parents have acheived some of [if not far beyond] what some people believe they are earining with an elite degree. Perhaps they don't think its worth it to them......which is their perogative. Meeting full need is a question of values.

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</p>

<p>Well, maybe it is a question of values, but in our case it feels more like a question of financial necessity. Do we "value" our d's education more than our, um, lifestyle? Yes, but not more than her sisters' educations or our responsibility to provide for our own retirement. Knowing these kids as I do, they'd trade a shot at Harvard in a heartbeat for the guarantee that mom or dad won't have to move in with them or depend on them to cover the costs of their senior housing in 25 years or so :).</p>

<p>In terms of value, is the education at Harvard or Williams really so far superior to top merit-aid based schools? Probably yes, if you've got the money. If your financial situation is such that you can borrow, get all your kids through school, and still retire with some security, the answer again is probably yes. I'm one parent who is grateful that my kids have had the opportunity to be "bought" by the kinds of school we otherwise just could not afford.</p>

<p>interesteddad: Thanks for the encouraging words. You are right about my D being in a good position. I thank my stars that I found CC and learned about merit aid and the selective schools before she made her list. If I had not persuaded her to add Chicago, Grinnell, and Kenyon to the mix, she would have been staring at acceptances to six fabulous schools and no money. I question the wisdom of the agreement the elite schools signed regarding need-based aid. I still think that there is room in their system for both need and merit based aid. The fact that they abused it and collaborated too much in the past in unfortunate, but I think they threw the baby out with the bath when they made the new agreement.
Right now, D is planning to visit Grinnell this week. The decision then will be among Swarthmore and heavy debt, Chicago with some debt, and Grinnell with no debt. I think Kenyon has fallen out of the equation because the academics are stronger at the other schools.
frazzled1: Hear! Hear!</p>

<p>"I agree on a macro level. However, I don't view the personal letters D received from the President of a merit-aid college any less cynically.</p>

<p>On a micro level, the adcoms, especially at the smaller schools, are not acting that cynically. They do develop an atttachment to "their kids" and don't like to lose them, especially a URM kid. The motivation may be statistically driven, but if it were just that, the Dean of Students wouldn't be able to rattle off application essays."</p>

<p>I don't know why you would consider this cynical. Swarthmore, like every other school, may like its yield to go up in the long run - they think it makes them look better. But in the short-term, increase in yield results in inadequate housing, classes being overfull, some students being shut out of desired courses, and, perhaps, too much money being spent in the financial aid department. There's nothing cynical about the school doing its very best for those students who end up attending - including not over-encouraging more students to accept when doing so might be dangerous to the quality of education offered.</p>

<p>Pattykk - Other than in art history (and maybe math and astronomy), I don't think you'll find one whit of difference between the education offered at Williams and that at Grinnell (which, by the way, has an endowment every bit as large.) The "whit" may as often be in Grinnell's favor as in Williams'. (You will find a less well-heeled student body, definitely fewer student-athletes, maybe fewer student musicians, and assuredly more interest in foreign languages.)</p>

<p>Pattyk:</p>

<p>I've been reading some of "Morty's Boys" economist papers on college finanicial models at Williams. The profs in the Economics department there are do a lot of modelling of colleges as businesses.</p>

<p>Grinnell and Swarthmore make a very interesting comparison because they are so similar:</p>

<p>"Marty's Boys" Universal Rule #1: per student endowment is the whole ball of wax for private schools. The size of the endowment determines the size of the subsidy each student receives above and beyond net tuition and fees and the size of that subsidy determines the quality of the product.</p>

<p>"Marty's Boys" Corollary: Increasing enrollment is always a bad financial decision for a private school because the incremental income from tuition is such a small fraction of the cost per student. It is literally like losing money on every widget sold and trying to make it up on volume! Enrollment increases without a corresponding rise in per student endowment will always mean lower quality through reduced per student spending or jeopardizing the future health of the school by spending endowment revenues at a higher rate.</p>

<p>Grinnell and Swarthmore are twins: They both have huge endowments and among the highest per student endowments in the United States. Grinnel is actually a little higher -- the 6th largest per student endowment in the country, Swat is hovering somwhere around #10. And, both have refused the false tempation to grow, with almost identical student bodies of 1500 students.</p>

<p>Based on this, "Marty's Boys" would put both Grinnell and Swarthmore at the top of heap -- in fact, when Marty's Boys did a financial comparison of Williams, Amherst, Swarthmore, and Wellesley a few years back, Swarthmore had highest per student spending and the strongest financial performance of the four. Grinnell and Swarthmore are two unbelievable strong colleges from an economic standpoint (which "Marty's Boy" maintain is what we really should be looking at, i.e. follow the money).</p>

<p>Looking at the budgets of the two schools, two somewhat intuitive things jump out:</p>

<p>Swarthmore charges more:</p>

<p>Their net per student revenue from tuition and fees (non inc. room and board) is $17,200. Grinnell's per student revenue is $12,500. Swarthmore actually "gives" slightly more financial aid discounts, but their sticker price is $6,000 a year higher.</p>

<p>Swarthmore spends more:</p>

<p>Their per student operating budget is $56,300 versus $42,700 at Grinnell.</p>

<p>In both cases, students are receiving a huge subsidy thanks to the monster endowments and small enrollments. Swarthmore can charge more because of location and prestige, and more of what high-end shoppers look for in a luxury car (higher SAT scores, more diversity, country club campus, etc.). I mean, I'd expect to pay more for a granite house with a slate roof surrounded by gardens. I would guess that the difference in spending largely reflects the cost of doing business in Philadelphia versus Iowa and a difference in class size. Swat has 389 class sections versus 307 at Grinnell.</p>

<p>Classes from 2-9: Swat 38% Grinnell 13%
Classes from 10-19: Swat 37% Grinnell 49%
Classes from 20-29: Swat 20% Grinnell 32%
Classes from 30-39: Swat 6% Grinnell 3%
Classes above 40: Swat 3% Grinnell 1%</p>

<p>Quite honestly, you are going to get your money's worth and then a whole bunch more at either Swarthmore or Grinnell. Purely from a economic/academic spending standpoint, Chicago wouldn't even be in the running, due to its larger size (although that discounts things about a larger school that may be attractive). I do think a case can be made that Swarthmore should cost more since it are spends $13,000+ more per year on each and every student, but that ignores the reality that any college will charge as much as it can and still get the student body it feels it needs.</p>

<p>You have to compare your net difference in cost and determine if the things it buys are worth it or not. It's no different than deciding to get the leather seat package in the new car or not. Of course, you want the leather seats, but that doesn't mean they are worth the cost of the luxury option package, particularly if the package includes the power moonroof that you don't care about. </p>

<p>I envy your decision because you have great choices. On the other hand, I'm glad I don't have to make it! I can say this: a whole lot more people should be applying to Grinnell.</p>

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<p>Unless your daughter has very strong negative feelings about Grinnell, I wouldn't go deeply into debt for Swarthmore, even though it's my personal favorite among the LAC's. They are similar enough academically and in terms of grad school admissions that if she likes them both after visiting, IMHO go where you won't have to borrow.</p>

<p>Interesteddad: Once again, you come through with great information and analysis. I am very grateful that you are on this board. Katie once had her heart set on Swarthmore, and, all things being equal, I am pretty sure it would still be her first choice. She says she clicked with the students there. Fortunately, she also clicked with some kids at Chicago, and we'll see what happens at Grinnell. We'll be sitting down soon to line up costs, academic programs, social life, and other QOL factors. It will be a difficult decision, but I think she will do well at any of the schools.
Hanna: Good point. We'll see what she says when she gets home from Grinnell.</p>

<p>Mini: Thanks for the info on Williams vs. Grinnell. I wish I could go on this trip to Grinnell. I am really curious to see it after all the good things we have heard. By the way, I just bought your book and am about half-way through. You have lived a life I admire. I wish I had had the courage to homeschool my son longer than I did and the get-up-and-go to get out and see the world the way you have. H and I are mulling over downsizing and job changing. We might take the plunge yet. Ever the late developers.</p>

<p>You will find more music and theatre, and likely more art and dance at Grinnell than at Swarthmore, and probably deeper language departments as well. (Swarthmore, of course, has very renowned faculty in the social sciences. And Swat's location (to me) is better, though nowhere close to $120,000 better. (If you were to spend even a fraction of that on her education above and beyond what Grinnell costs -- round the world trips, two years saving the world in Africa, a year studying modern dance in Paris, a visit to Siberia to do ecological research on yaks, etc., etc. there really would be no reasonable comparison in the quality of HER education. That's what counts - not the school - but the education she gets out of it.)</p>

<p>strong points, because she was disappointed in the arts programs at Chicago and Swarthmore, and she wants to continue her art. I have told her that many students study abroad when the cornfields get to them. I think your point about what the extra $$ can fund is VERY strong.</p>