<p>I believe merit aid absolutely has “helped” the increase in tuition. It’s the same principle as car rebates and car pricing. There is the sticker price and then there is the “discount”. And now, people are “conditioned” to it, they know they don’t have to pay the full sticker price.</p>
<p>I believe merit aid absolutely has “helped” the increase in tuition. It’s the same principle as car rebates and car pricing. There is the sticker price and then there is the “discount”. And now, people are “conditioned” to it, they know they don’t have to pay the full sticker price.</p>
<p>I think that’s true at schools (some privates) that stick a $5k-10k merit scholarship in many/most acceptance letters. It’s just a trick. They think they’re flattering the recipient and therefore the student will accept…because many don’t want to turn down what seems like “free money”.</p>
<p>I think there are some less popular privates who struggle with enrollment numbers. So, they boost price and then give merit to many/most of their accepted students.</p>
<p>I’m reminded of a very pricey summer music program that a private univ offers for high school kids. My friend’s D was accepted. They were so flattered that a $1000 scholarship came with the acceptance and felt compelled to enroll…even tho the remaining cost was a LOT more than they could afford. When they dropped their D off at the college, they met other parents , and they soon realized that everyone was given that $1k award and that the program used to cost $1k less…so the award was really nothing. It was just a marketing strategy.</p>
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<p>Their numbers are contrived.</p>
<p>“State Median Income is established by the U.S. Department of Health
and Human Services. These guidelines are used to determine income
eligibility for various local, state, and federal programs.”</p>
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<p>I used younger kids but it wouldn’t matter. College kids would get the
American Opportunity Credit. It’s useful to use younger ages to see
how parents can save up for college before the college years start.</p>
<p>Please enumerate the taxes. I did. If you don’t like them, post what
you think that they should be. Not just that mine are off. That’s not
an argument. That’s hand-waving.</p>
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<p>My experience is that you can find something that you can afford in
most places. It may not be where you want to live but, at $102,000,
it’s a place where you can live.</p>
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<p>Lowell, MA actually has a pretty good tech high school in the western
part of the city. One of my coworkers lives in Lowell. Their household
income is around $170K (dual-income software engineers). Marty Meehan
(former Congressman) lives there too. He has about $125 million in his
campaign war chest when he decides to run for a Senate seat. There are
private options in Lowell, too and, of course, MA has public school
choice.</p>
<p>But you make my point.</p>
<p>At $102,000, you have options. You may not like the options but they are
there.</p>
<p>Edit: I just had a look at the median household income numbers by state from the Census Bureau. They look nothing like the HHS numbers.</p>
<p>All schools want to increase their rating and prestige factor.How do they do it? By getting more students with higher GPAs and better SAT/ACT scores. If you’re a student or a parent of such a student, why shouldn’t you get some advantage in the form of merit aid?</p>
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IMHO the use of “should” unnecessarily introduces a moral component into the equation. Is it right or wrong? I think it is neither. People on both sides of the issue seem to cloak their argument with moral trimmings, but I think this is a straightforward business decision that lies no further in the moral sphere than a discussion over rebates and discounts at the car dealer across town. </p>
<p>You’re looking at a business trying to change the pricing model of their product. When a few innovators starting offering a discount a few years ago it worked for them, but just as game theory might tell you others adopted the tactic since there were no barriers to entry. The good news (from the college point of view) is that now the public is accustomed to seeing what would have been staggering prices for a college education just a generation ago, and it is the belief of the college presidents that if they can prevent discounting then the average selling price will rise. Maybe they’re right, maybe not.</p>
<p>Personally I think that bright as the presidents might be, they would fail basic economics or business theory. This is all out of Econ 101 with cartels, collusion, and chiselers. Probably should throw in a bit of Marketing 101 since labeling discounts as “scholarships” was a genius move. But just as a few brave souls cracked the price barrier with “merit scholarships” there will be some enterprising schools that, should merit scholarships disappear thru sanctioned collusion, will find a way to start discounting again. All the same pressures that were there before discounts spread will still be there if the college group can prohibit this particular form of discounting. I’m curious what form it will take, actually. But inevitably whatever they pioneer will be adopted across the college system, just like “merit scholarships” today.</p>
<p>Funny… This Wall Street Journal article says there’s a move towards Merit scholarships
[Price</a> of Admission: Shift to Merit Scholarships Stirs Debate - WSJ.com](<a href=“Price of Admission: Shift to Merit Scholarships Stirs Debate - WSJ”>Price of Admission: Shift to Merit Scholarships Stirs Debate - WSJ)</p>
<p>jandjdad, not all schools feel the need to improve their rating - many of the schools my D applied to don’t offer merit aid because they are already highly ranked.</p>
<p>So poetgrl is BC lying on its website when it says its aid is all need-based and not merit based? In my mind, if it is not available to all applicants, it is not truly merit aid. I was under the impression that BU’s merit was somewhat need-based.</p>
<p>Mamabear,
I meant that the ones that offer merit scholarships often are trying to improve their reputation and lure students who might go elsewhere. Obviously some of those schools at the very top, don’t have to offer merit aid. It’s those just below the Ivys (and Ivy-level schools) that use the merit as a lure.
As for those other schools trying to improve their reputation, look no further than those schools that fudged their SAT scores (Claremont,Emory and GW(?)) Why would they do that, if not to look better…
As for the morality of it, you can debate the morality of athletic scholarships, merit scholarships, holistic admissions and almost every aspect of college admissions. It may be a cynical view but it’s just a great big game and we are all just trying to learn the rules when playing it.</p>
<p>mamabear, I think a lot of colleges do what is called on this site preferential packaging. So, they offer more aid to those they want more. You know, I could also have mixed up BU and BC, to be honest. (we weren’t going to be getting any need based aid, anyway). I just recall this from the financial aid forum last spring.</p>
<p>I know that BU does offer merit aid AND when it comes to Need-based financial aid, the packages for better students have a higher percentage of grants relative to loans and work study. I think this is pretty common though.</p>
<p>BU offers $12.5 million in merit scholarships while BC has a limited number (Presidential Scholars per their website).
[Scholarships</a> & Merit Awards Undergraduate Admissions | Boston University](<a href=“http://www.bu.edu/admissions/apply/costs-aid-scholarships/scholarships/]Scholarships”>Scholarships & Financial Aid | Admissions)</p>
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<p>Yes and no. If they were only competing amongst themselves, maybe they could do this, and in fact this is why they want to have some sort of consortium about giving aid–so the private colleges in the group don’t have to have some sort of arms race with merit aid. </p>
<p>But then, the article also says they have to compete with the lower tuition of state schools. I know a few private liberal arts colleges are worried about this–and in fact, Sewanee cut its tuition 10% this year to compete better with state schools. </p>
<p>From a NYTimes article</p>
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<p>Of course, if state schools continue with their tuition increases, then maybe what you said would be the case.</p>
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The Ivies are a cartel that prohibits athletic scholarships. The NCAA sets the rules for a cartel that bans paying athletes beyond giving them scholarships. I would not rule out the ability of universities to collude.</p>
<p>What I find interesting is that the pricing model among privates is not tiered as much as one can find with other high ticket services and items. The pricing is really quite bunched considering in general, at least on this forum, people manage to find great distinction between the “quality” of colleges. I also find it interesting that room and board is not as variable as one might expect it is very expensive generally to “heat” buildings, yet the room and board in snow country is not all that different from room and board in parts of the country where they do not need to heat all the buildings. The reality is that any pricing is buyer driven and until people just start making moves with their wallet not much will change.</p>
<p>I think the Tier 1.5 and Tier 2 colleges are still offering generous merit scholarships to collar the upper-middle and high-income households’ students. Giving a $5,000 to $10,000 discount (which many merit scholarships serve as) to entice the otherwise full-pay students’ parents is an effective marketing ploy. While the parents shell out $40,000 to $50,000 towards COA, they can still say “my child received a scholarship” as a small consolation. We’re in that same boat, figuring out how to allocate the funds to make those four years’ of payments - DS received a smallish merit scholarship too.</p>
<p>higgins2013–what we have found is that most of the merit aid at the smaller LAC is more generous but is tiered. Yes, if your GPA is 3.3 and your ACT is 26, you are getting $10,000, maybe, but bump those up to 3.6 and 28 and you are looking at 20,000 at a lot of schools. $20,000 off $35,000 is significant (that is what DD got). That one award alone brought the cost of that private school down to WELL below our in-state options. Part of the award, I am sure, was geographic diversity. She will be the only student from our state (but it’s an automatic award for GPA/test scores too). Some of the smaller ones she got I’m sure were more geographic diversity–which is a goal of the school on their long range plan. Helps us tremendously :D. </p>
<p>I agree, a lot of people like to brag that their child got a scholarship, but when it brings the cost of the school down to $50,000, is it worth it :D. Most of the kids’ friends have gotten merit awards that cut the cost of their schooling in half, roughly, with the exception of those going to state schools–just not much given there–$2500 so far is the biggest award we’ve heard. Since most of their friends will be full-pay or close to it, those large awards are very welcome. I supposed we could brag that DS has gotten offers for over $1,000,000 in scholarships…but he applied to 10 schools too :D.</p>
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<p>It might look good on a resume for the first job too. But then you take them all off after getting hired.</p>
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<p>Yeah, but they, and their alums, arent going to sign off on their rating sinks as they lose the ability to complete for the best students.</p>
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<p>The economics are a bit more complicated than that. The vast majority of schools that give merit aid don’t give sufficient need-based aid to meet 100% of need for 100% of their students with need. So in a sense there’s redistribution going on, regardless of the ultimate source of the money. Every dollar in merit aid going to a student without need is a dollar that otherwise could have gone toward meeting another student’s need. To that extent, then, lower-income students are paying higher net COA so that higher-income, better-stats kids can get merit aid. Most of the most selective colleges decided years ago it was a higher priority to meet 100% of need for 100% of their students; many now give no merit aid, others only token amounts. It’s schools in the next tier that are using merit aid to “buy test scores” at the expense of meeting full need. Some of them don’t feel great about that and would like to stop, but they can’t afford to be first-movers or they’ll lose out in the competition for the best students. So they’re trying to persuade their peer institutions to collude with them to make the switch en masse.</p>
<p>I’m not saying one policy or the other is clearly preferable. If you’re the parent of a high-stats kid who stands to garner lots of merit aid over and above EFC, you probably like the system just fine the way it is. If you’re the lower-income parent of a middling-stats kid who may not be able to afford college at all, or who can attend college only by amassing huge debt, you might welcome the proposed change. </p>
<p>I’m in neither of those groups: we have high-stats kids who undoubtedly could qualify for merit aid at many schools but instead have elected to attend more selective, need-based-aid-only schools where we’re full-pay. And we have enough financial resources to make that work, however painfully. So for me, the merit-v.-need debate is a question of social policy, not self-interest. To my mind the only justification for the extremely generous tax benefits and other direct and indirect subsidies we lavish on higher education is that they’re operating as engines of prosperity and upward social mobility. They don’t perform that function effectively if all the benefits go to the already-well-to-do. So I tend to favor more need-based aid, even at the expense of merit aid. But basically that’s a decision for the colleges to make.</p>
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<p>Need-based financial aid punishes families for working and saving. Merit scholarships reward academic achievement. This is the argument for merit-based aid, which should be weighed against your argument for need-based aid.</p>