My daughter received almost $39k in university need-based grant aid in her financial aid package. I work for a different university that has a tuition aid program for children of staff/faculty. D is eligible for a $10,810 tuition payment from my employer to the university she will attend. However, any money my employer pays for this “benefit” will equal a dollar for dollar reduction in her grant aid from her university. In essence, my employer will be paying out almost $11k/yr for something that will not benefit us at all.
This totally annoys me and I had originally decided that I wouldn’t even apply for the funds this year since it’s a wash to our bottom line, but I feel like a jerk to the university who is giving us so much gift aid. I do understand that if my daughter has access to other sources of funding, then she has less need, thus less need-based aid. I would feel much more in charity towards the school D will attend if even a small portion of her loans could be reduced if I brought this money from my employer (even just $2k so D doesn’t have to take any unsubsidized loan).
Has anyone ever experienced this? Do you think it’s worth petitioning the school? I’m afraid that if they start re-writing her aid package she could end up losing her best loans (perkins and Stafford Sub).
Well she could never lose entitlements like the Stafford loan. I think your attitude really lacks gratitude that the school would step up and meet that level of need for you if necessary. In light of them giving so much other aid I don’t see why you begrudge them something that is an employee benefit and no skin off your nose. I guess since this payment is a benefit of work and not an outside scholarship I don’t see why it should be applied to loans first. But if they have a loans first policy for outside grants, I suppose you could ask. But then you will look really like you are the one using them if you have resources you decide to withhold and want them to make up the difference.
Okay, BrownParent, guess you told me. Does it change your opinion at all to know that the university I work for is Brown and that my consideration for not taking the money is Brown’s $10 million annual budget deficit and my attempt not to exasperate the problem for nothing.
Does the other school have a budget deficit too? You might be helping Brown but hurting OtherU.
I’d look at the tax consequences to your daughter. There may not be a difference, but much of the $39k may be taxable (not the loans) while the tuition reduction through tuition exchange may not be (I don’t know how they actually do the credit/exchange).
You need to find out in greater detail how this staff tuition plan works. It could be that there is no exchange of dollars, but rather a you-take-our-kid-and-we-take-one-of-yours going on here.
There is no tax consequence. The TAP benefit is not taxable income. I guess I will have my employer send the money with a clear conscience - like most people tell me, why do you care about your EMPLOYER having to pay a benefit they offer. For my other kids, I always looked at it as a way to “donate” to their universities since I couldn’t do it otherwise (though my son’s loans were also reduced a little before his grant aid was reduced).
I’m probably going to be in the same boat next year as you @3rdXsTheCharm and it is pretty frustrating.
One of the reasons I took this job a number of years ago was for the sizable tuition benefit. Now it looks like my kid will be going to a school where outside scholarships reduce grants, dollar-for-dollar. The only break is that some schools allow you to use the tuition remission to buy out your kid’s contribution and/or loans. Unfortunately, when I took my job almost 10 years ago, I was not well-versed in college FA policy - after all, my son was only 8 then! So I do lament the lower salary I accepted, thinking I would make it back on the tuition benefit.
It’s such a perverse disincentive to seek any kind of outside assistance, like scholarships. I would love it if colleges would even reduce your dollar-for-dollar grant only 75 or 80% so that you at least get to keep some of the benefit. But I guess when you’re that highly selective, you get to make your own rules.
For what it’s worth, most schools are nowhere near as generous as the school that the OP describes. Most schools do not provide much aid beyond the Pell grant and subsidized loans. This is a frustrating situation but it really only comes up for students who are attending universities with very generous financial aid programs. For the majority who aren’t in that boat, the tuition assistance is a very useful benefit.
Each school’s policy is different. Our benefit is full tuition, but ONLY to other schools that are member schools and then ONLY so many students are accepted for the benefit by the host institution. Each one that accepted one of my d’s sent a letter explaining how aid would be coordinated. All different. Honestly, the benefits work best for families who aren’t going to be getting a lot of need based aid.
Your daughters school is awarding her almost $40,000 in grants, and you are complaining that she will have small subsidized loans?
My experience with full need met schools is that they do not offer aid below FAFSA EFC.
If your daughters school kept the $40,000 grant, and allowed her to combine it with the $11,000 employee dependent benefit, would it bring your costs below EFC?
I believe the only way you can reduce your out of pocket costs below FAFSA EFC, is to either select a school with lower COA, or for the student to receive enough merit aid, to make need based aid moot.
Is there a GPA requirement for your D to keep the 39K package (all or some?)
I’d think about that first… the money from Brown will go to your D’s college as long as she’s in good standing. There may be nuances you haven’t considered.
Does taking the package allow your D first crack at work study jobs on campus? These can be highly desirable.
Have you had a phone call with a financial aid officer at your D’s school to find out how other kids with tuition benefits have handled this? There may be pros and cons you might want to know about.
Just want to say that we were surprised about how the employee tuition benefit worked too. Interestingly, it would have been a wash even if my child had gone to the university where my husband works. Apparently, at most schools, the benefit only benefits people who didn’t get other financial aid or get very little f.a. .
emeraldkity4: I would never expect the full $11k to be applied to D’s account. It would definitely exceed the EFC threshold. I was just hoping for a slight reduction in her loans (which are listed in her package as $3.5k, but will end up being $5.5 because she’ll need to tack on an addition $2k in unsub stafford loan).
blossom: The $39k is all need based aid, no GPA requirement (except that she remain in good standing). Her student loans will be $5.5k and she’s been awarded $2.4k in Work Study (which she’ll have to earn in order to cover her living expenses while she’s at school - social life, books, laundry, etc). I’ll be the first one to admit that it’s an exceptionally generous package and we are grateful!
Also, in defense of D’s chosen school, they do reduce a portion of student loans for scholarships that “are earned.” Unfortunately, tuition benefits are not considered “earned.”
“All students are encouraged to seek out outside scholarships to help with the cost of their education. To ensure the outside scholarship will benefit the student as much as possible, it is our policy to first replace the loan and work study portion of the student’s financial aid package; however, total grant funding (including outside scholarships) cannot exceed the student’s total demonstrated institutional need. If the amount of outside scholarship received exceeds the amount of loan and work study, then the student’s BC grant funds are reduced to meet their demonstrated institutional need. Unearned funding such as tuition benefits and state grants reduce [school name] grant funds dollar for dollar within the financial aid package”.
Thanks for all the input. I really don’t mean to complain about our good situation. I know we are blessed. I was just feeling that it was wasteful for my employer to put out so much money for nothing.
The $10,000 plus from your employer actually reduces your financial need. This is why the college is reducing your daughter’s need based grant money.
It sounds like you were hoping to use the tuition allowance from your employer to reduce your family contribution. Is that correct? If so, colleges do not award need based aid to pay the family contribution. Your family contribution would remain the same,and you would be expected to pay that.
I don’t think that is what she is saying. What she is saying is that she hoped that this tuition reimbursement would have been treated as if it was an outside scholarship. That they would reduce the subsidized loan and work study with grant aid. I personally think that would be fair.
I can’t speak for the school your D’s is attending but it sounds like that is the rule. I wonder if there is a wink wink nod nod and no money is actually exchanged.
If it were me, I’d ask for a meeting with a financial aid officer at Brown as my first step. Have your colleague explain how the tuition remission program works.
Armed with that knowledge, you can either decide that a 40k package is a great deal, and help your D budget carefully to pay off her loans as quickly as possible, or you can decide to take things further with your D’s university.
I think your D will be graduating with a modest loan burden-- but there’s a way to reduce that a bit maybe hearing from a colleague how it works will help you.
“I was just feeling that it was wasteful for my employer to put out so much money for nothing.”
Your employer isn’t putting out anything for nothing. It is honoring a commitment to you as an employee, and it is playing nice with a presumably peer institution. Truly, in this case everyone wins.
Professors generally have advanced degrees and are notoriously underpaid compared to similarly qualified employees outside of academia. Tuition remission benefits are often touted as a valuable perk which will help offset the lower salary. My husband was a professor for 10 years and we always felt as though the tuition benefit at his workplace would help offset his lower salary, since we have 3 children to put through college. His contract was not renewed due to delays in some of his grant funding literally the year our eldest was applying to colleges. We thought we had really missed out financially, but it turns we did not. Frankly, tuition remission should not be touted as a benefit to the employee if cannot be used to reduce the loan component or the EFC.
With grant funding becoming increasingly harder to get and lack of tenured positions and career advancement, it is a wonder anyone pursues teaching and research positions at a college or university at all.
