<p>Our son has been accepted to several different LACs with seemingly similar aid packages, and we're trying to sort through the details now. They are all very good options, and he's keeping an open mind while we figure out the finances. </p>
<p>We're also fortunate that my employer (I'm in higher ed) provides a tuition benefit that we can use at any college or university. However, I was really surprised when I checked with two of the colleges this week. </p>
<p>One will reduce his loan and federal work-study on a dollar-for-dollar basis, which is really nice, since that will reduce his debt on graduation. The other college, however, will reduce his grant on a dollar-for-dollar basis but keep the loan and work-study the same, so we will see no financial advantage to the tuition benefit. </p>
<p>I realize that financial aid packages must be adjusted if there are outside scholarships or awards, but does anyone know if it's more common for these to reduce the grant or the loan part of a package? </p>
<p>Thanks, and this has been a great resource throughout this process.</p>
<p>*I realize that financial aid packages must be adjusted if there are outside scholarships or awards, but does anyone know if it’s more common for these to reduce the grant or the loan part of a package? *</p>
<p>It isn’t unusual for a school to reduce grants. And, it isn’t unusual for a school to reduce loans. It just depends on the school, how financial strong the school is, and the policy that it chooses to have.</p>
<p>Schools that are less financially strong sometimes will reduce institutional aid in such cases so that they’ll have more aid for others. Perhaps their policy is that every student with need must have a loan and work-study, and if there is still need (after loans and outside scholarships) a grant will be issued. But, a loan and W/S must be in there. </p>
<p>Think about it, such a policy saves a school a lot of money over a student’s 4 years. In your child’s case, it saves them about $40k. That’s $40k for another child. That’s just the way they look at it. </p>
<p>Other schools will do things in a more favorable way…reduce loans and W/S first. It just depends on the school.</p>
<p>You’re lucky that at least one of your child’s school does reduce loans first. :)</p>
<p>Along these lines…my sons school said they will reduce his Perkins Loan first…bummer, I wanted the low interest rate for him! However, I understand why they will do that, sort of…as we still have a 10K gap over our EFC (I know, they don’t promise to meet full need). My question is, our HS school awards scholarships in late May. This is after we will have accepted our FA package. When and how do you report the scholarships? Also, some of these do not go to the student until after they register for 2nd semester classes, or after they complete a full year and register for 2nd year classes. So when would you report those? I honestly do NOT remember even reporting them for my older 2 kids…maybe I did, but my aging brain is having a memory block on this one!</p>
<p>I completely understand why it would be advantageous for the college to reduce grant first, but this is really a disincentive for us to look for outside funding. In fact, I would decline the tuition benefit if our son attends this school since they are considerably more wealthy than my institution, and there is no reason for my employer to provide funds that do not benefit us financially. </p>
<p>Both colleges are great options, and our son is really excited about both. I think the better aid package might be the determining factor in his decision. It will be a difference of about $20K in his loans (not $40K, unfortunately), which makes a lot of difference to an 18 year old. We’ll be taking some loans to meet the EFC, so we can’t cover the difference in aid packages, especially since his sister will be in college in three years. </p>
<p>It’s been really interesting to me how our perception of colleges ebbs and flows depending on the small signals they send. I know he can get a wonderful education at any of the schools where he was accepted (not just these two), but we also want to feel good about dealing with the bureaucracy of an institution where we’ll be sending tens of thousands of dollars.</p>
<p>Policies vary from school to school. You would have to consult with the individual school. Some schools will allow you to use outside scholarships to fill the gap in the FA package. Since you are talking about a tuition remission plan the school will most likely only cover the tuition part of the package. </p>
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<p>You are benefitted no matter what package you take due to the fact that you will not have to pay tuition. </p>
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<p>Testing for understanding; you are willing not to use your benefit, which cost you nothing because the the college that offered your son a packag is richer than the school where you work, so let them use their money (which they could allocate to another student who needs aid)? </p>
<p>That is a move that is extremly selfish perspective and and IMHO, the school is absolutely correct that they should apply your tuition benefit to your bill before giving out their institutional aid. You do realize that it is not hard for the university to contact your school, or look up your employee benefit and then adjust your package accordingly?</p>
<p>Is there a cap on how much your employer will pay? </p>
<p>No matter where your child attends school, you and he will be responsible for any all cost over the cost of tuition as your tuition benefit is not going to cover fees, room books etc. If your benefit covers full tuition at a private school, then the only thing on the table is tuition room, board, books etc. If your son will have about 20k in loans over the course of 4 years, that is not an exhorborant amount of $$ (in fact it is lower than the the average recommended debt for a college student).</p>
<p>School # 2 is just reducing the money that they gave you, which theoretically is not guaranteed to you especially since the school does not meet 100% demonstrated need.</p>
<p>It sounds like your package in scenario 1 was less than the cost of tuition.</p>
<p>It sounds like scenario 2, covered the tuition and the work study/loans would have covered room/board/fees or incidental items.</p>
<p>* but this is really a disincentive for us to look for outside funding. In fact, I would decline the tuition benefit if our son attends this school since they are considerably more wealthy than my institution, and there is no reason for my employer to provide funds that do not benefit us financially. *</p>
<p>I totally understand how you feel. And I totally understand the motive to not give that tuition benefit to that school. Maybe that creates room for negotiation with the school.</p>
<p>If you were to tell the school that if they’re going to remove “dollar for dollar” of grant money for this tuition benefit, then you have no incentive to give it to them. So, if the school wants to save money, propose “to meet in the middle” and only reduce 50 cents for every dollar of the tuition benefit. If they see that they’re not going to get ANY money if they hold firm, they may fold. Of course, this must be done politely. And, if they agree, get it in writing that it will hold for all four years.</p>
<p>How much is the tuition benefit? If it’s at least $10k, then a 50 cent reduction for every dollar still would reduce loans by $5k every year.</p>
<p>After 10+ years of dealing with financial aid at a variety of schools my kiddos came to the conclusion that how financial aid is implemented was a telling sign how the money would play out for the next four years.</p>
<p>If the policies and implementation was flexible and done with the student in mind (obvious if they reduce loans vs. grants) then they would place that school higher on their list. As each year progressed, they received MORE in aid (not loans) than they had the previous year. This was true for the student’s summer contribution (waived after matriculation), more for travel, more for research, more for summer school, more for books…</p>
<p>You deal with admissions once, student and you have to interact with financial aid for the next four years.</p>
<p>There is really no such thing as a free lunch (you end up paying one way or the other.</p>
<p>While school A will reduce his loan and federal work-study on a dollar-for-dollar basis, which is really nice, since that will reduce his debt on graduation. Keep in mind that any grant aid that is given to the student over the cost of tuition and books is taxable income to the student and must be filed ont he tax return and calculated on the FAFSA which can reduce the amount of need based aid that your child receives the next year. You may end up receiving less aid because of the higher EFC.</p>
<p>The other college, however, will reduce his grant on a dollar-for-dollar basis but keep the loan and work-study the same, so we will see no financial advantage to the tuition benefit. </p>
<p>You have to decide if it is better to have work study in on yoru FAFSA or the excess grant/scholarship $4</p>
<p>Both schools promise to meet full financial need, and our need is MUCH more than the tuition benefit we get ($5K per year). In both cases, the aid packages consisted of institutional grants of more than $5K, loans and work-study. In neither case would we be paying back the institutional grant, but at one college our son would have an additional $20K in debt at graduation. </p>
<p>I did ask the college that would be reduce his grant if it were an option to reduce his loans, and they said that it was their policy to reduce the grant. Just to be clear, I’m not upset with this college in any way since this seems to be their policy that they apply consistently. I realize that different institutions have different financial constraints, just as different families have different financial constraints. </p>
<p>We’re very fortunate that our son has wonderful opportunities that he’s equally excited about, including one that will result in lower debt for him upon graduation. </p>
<p>As far as declining the benefit, the fastest growing part of the budget at my institution is financial aid. Unfortunately, we cannot promise to meet the stated financial aid for all of our students, so it is likely that the money I declined would be applied to a student at my institution to help fill the gap between their aid and their stated need.</p>