Should merit award impact "need based" aid?

Parents Forum
21

<p>a few thoughts after having been there/done that with various combos of need/merit at supposedly need blind schools:</p>

<p>although merit should reduce/eliminate loans, it may not always. ask.</p>

<p>a merit award may be quaranteed; FA is a yearly open question</p>

<p>if you accept merit rather than a need based award, your kid is usually able to stack awards</p>

<p>for example: School A offers a need based award of $32,000, which will essentially cover tuition and leave you responsible for room and board. You will always have the amount over the need based award to pay and it may vary year to year. School B offers a merit full tuition scholarship, guaranteed for four years. Your kid then gets several local scholarships which can go towards room and board. An RA position will cover room and board and the outside scholarships can go to spending money.</p>

<p>If you find yourself in this position, please clarify and confirm with the school regarding stacking merit awards. I don’t want to give out any incorrect information. And I agree that none of it is <em>fair</em></p>

<p>Good Luck!</p>

22

<p>Would a school withdraw a merit scholarship from a kid if they learned his/her parents were multi-millionaires and could pay for a full ride… I doubt it. </p>

<p>“Well, sort of. Some merit scholarships require submission of the FAFSA or CSS profile. Obviously, some of the “merit” aid is a relabelling of need-based aid.”</p>

<p>My S has at least three merit scholarships he was given prior to the submission of any financial documents. Now if those schools found out I bought Microsoft at $10 will they pull back those scholarships… I think not.</p>

23

<p>*Is this also the case with public schools? *</p>

<p>Yes. </p>

<p>But…some public schools are so inexpensive that a merit scholarship can be so big (comparitively) that after eliminating all “need,” it can reduce your EFC.</p>

<p>BTW…I don’t understand the complaint here. I could understand IF the merit took away “free money,” but in most/many cases, the merit reduces loans and gaps.</p>

<p>Why is that bad? At that point, a student can still take out a Stafford if the EFC is unaffordable.</p>

<p>Again, if the FA package was all free money (which rarely it is at merit schools), then I would understand the big concern.</p>

24

<p>I just know that if my boss told me I was getting a raise based on the MERIT of my performance I would expect something more than I’d been getting prior to the award. I would not expect a portion of my original salary to simply be referred to as merit with no pay increase what-so-ever. That is essentially what happens when an EFC is cut in half and the merit aid goes to meet the new amonut of need. It is either merit or need… it should not be both. IMHO</p>

25

<p>How about this equally tortured analogy: </p>

<p>If a low-income worker gets a raise that boosts their income above the poverty level, they may lose their eligibility for food stamps. Doesn’t seem fair, but like need-based FA, federal nutritional assistance is based on need, which is a dollars-and-cents formula. </p>

<p>Congratulations to your S on receiving non-need merit aid, and best wishes.</p>

26

<p>"Obviously, if their calculation of your need is inadequate then you need to move on to another college which is affordable. But if you can attend with their definition of need and they’ve met that need- where’s the quarrel? "</p>

<p>My understanding is that need is defined the FAFSA and or CSS Profile not by the individual institution. The institution chooses to meet (or not) a percentage of that predetermined need. I don’t feel merit aid should be termed merit if it fills the dual purpose of meeting need. Call it a tuition discount, call it need based aid with a GPA attached, but don’t tell me that it is merit aid one year and FA the next. If you want to call it FA vs. a merit scholarship, then drop the GPA requirement. That way the bright kids don’t have to bust their humps to get a high GPA while the not so bright ones get their need met by a grant with no GPA attached. Seems like that’s the way it’s being done now.</p>

27

<p>“BTW…I don’t understand the complaint here. I could understand IF the merit took away “free money,” but in most/many cases, the merit reduces loans and gaps.”</p>

<p>If you receive a merit scholarship in place of a need based grant (assuming you qualify) and then fail to get the GPA needed to maintain the merit scholarship you lose the scholarship. Doesn’t that constitute taking away free money?</p>

28

<p>

The flaw in this analogy is that your salary is something you’ve earned and are entitled to. Not so with need-based aid–it’s a gift. </p>

<p>I think what confuses the issue is thinking of the need-based FA as coming first, and the merit aid subtracting from that. Think of it the other way. Say the university costs $50K a year. Then you get a merit scholarship of $15K. Now the university costs $35K a year. Your need-based aid will be calculated based on a cost of $35K, because that <em>is</em> your cost.</p>

29

<p>To me it makes sense that if you get merit, you have more money so less “need” for financial aid. Regardless of how one ‘earns’ income, if your income goes up, your financial aid should go down. I know it doesn’t seem fair, especially when its tough to make ends meet, but it makes sense to me. </p>

<p>Just like when I have won prizes for my research or contributions to my field, when the prize includes money, it is seen by everyone as “income”. And, sigh, I pay taxes on it.</p>

30

<p>It’s a toughie. I remember the first time down the path I thought my son’s piddly HS scholarship would “reduce” the size of the check I had to write. Silly me. Nightchef has probably the simplest solution for how to “view” this. By the way, some grants and even some Federal grants do have a GPA level that must be maintained.</p>

31

<p>Agree with post #19</p>

<p>Doesn’t giving merit aid in place of a need based grant create a disincentive for the individual to seek merit aid? Merit is harder to keep as pointed out in #19 then a need based grant because there is a GPA attached. Not unlike YOUR tortured analogy wherein a worker earns more and boosts his income beyond the poverty level …the end result being a decline in his standard of living because he has lost eligibility for food stamps. There you have eliminated an incentive rather than having engendered one. If a student knows he’ll get a grant vs. merit aid why opt for the merit aid… being lazy pays better. Not the way it should work. IMHO</p>

32

<p>Merit aid isn’t given as an incentive for needy students to find a way to lower their loan obligations. It’s given as an incentive for students who don’t qualify for need based aid to choose institution A (the merit school) over institution B (the need only school.)</p>

<p>Why is this so hard to understand? The school offers merit awards to entice desirable students to choose them over their other options. The school decides which priorities it values- and awards the money accordingly. If you are a red-headed gymnast heading to a school which has an award for red-headed gymnasts you’re in luck. And if not- oh well. If this means that this is a disincentive for the brunette lacrosse players to apply there- so be it.</p>

33

<p>

There are not too many schools where a student knows he’ll get a big enough grant to take care of his need, and I think most of them are schools that don’t offer merit aid at all. </p>

<p>Basically you opt for the merit aid (if it is in fact an option; at most of the schools our son is applying to, it’s automatic) because if you can’t afford the bill, you need all the help you can get. The worst-case scenario is that it doesn’t affect your bottom line at all; more likely, it will help, but not as much as you had hoped. Merit aid and need-based aid aren’t an either/or; they complement one another.</p>

34

<h2>*“BTW…I don’t understand the complaint here. I could understand IF the merit took away “free money,” but in most/many cases, the merit reduces loans and gaps.”</h2>

<h2>If you receive a merit scholarship in place of a need based grant (assuming you qualify) and then fail to get the GPA needed to maintain the merit scholarship you lose the scholarship. Doesn’t that constitute taking away free money? *</h2>

<p>If merit is taken away, then the following year the “need” would rise again and the grant should be given. (I’d try to get some kind of understanding about that.)</p>

<p>see below for a similar example…</p>

<p>My oldest got a “small” scholarship from his high school at the end of the year and yes, his out of state public had granted him an equal amount of work/study which they removed. The scholarship was a one time one year sort of thing and the work/study was added back in sophomore year.</p>

<hr>

<p>*I just know that if my boss told me I was getting a raise based on the MERIT of my performance I would expect something more than I’d been getting prior to the award. </p>

<p>I would not expect a portion of my original salary to simply be referred to as merit with no pay increase what-so-ever. *</p>

<p>That is a different situation. Your salary isn’t made up of loans or a gap or extra work/study. But, imagine if your regular salary was…$60k plus a $10k a year loan for your healthcare. And your boss gave you merit and took away that need for an annual $10k a year loan. That’s what this is mostly about.</p>

<p>Few loan packages meet need without loans or gaps…and the few schools that do that, don’t generally award scholarships. </p>

<p>And, I can certainly understand not wanting to “jump thru hoops” to get a scholarship, if it means grants would be reduced. However, many merit scholarships are automatically awarded - no extra work at all (except maybe a simple application).</p>

<p>Again, I understand if merit takes away free money (permenently), but if it removed loans/gaps, work-study, then I don’t see the problem. If it takes away free money (grants), I would ask if the grants would be restored if the scholarship goes away.</p>

35

<p>*Merit aid isn’t given as an incentive for needy students to find a way to lower their loan obligations. It’s given as an incentive for students who don’t qualify for need based aid to choose institution A (the merit school) over institution B (the need only school.)
*</p>

<p>True, very true…but it’s also good for that needy student whose FA package included loans or gaps.</p>

36

<p>I understand that merit aid reduces need aid and the reasons for it, but I still have a bit of a problem with reducing need aid because of outside scholarships that the student actually had to “earn”. In those cases, the student actually went out and did something which generated a scholarship (more than just filling out paperwork). It seems unfair to take 100% of the earned scholarship away by reducing need aid (especially if it doesn’t reduce loans or work/study). If your family’s EFC is $0, it doesn’t really make much sense to go to the trouble of trying to get outside scholarships.</p>

37

<p>“I understand if merit takes away free money (permanently), but if it removed loans/gaps, work-study, then I don’t see the problem. If it takes away free money (grants), I would ask if the grants would be restored if the scholarship goes away.”</p>

<p>I’m betting the answer is no… But anyone with first hand knowledge please let us know.</p>

38

<p>^Hat, it certainly appears that way, but as alh (#21) pointed out, the merit award can be stacked! You never know what the family situation may be couple years down the road, or what the college FA situation may be. Given the current economy, don’t be surprised to see colleges peeling back on FA commitment. So having a sure merit scholarship, especially one that stretches all four years, certainly gives you a piece of mind.</p>

39

<p>I understand that merit aid reduces need aid and the reasons for it, but I still have a bit of a problem with reducing need aid because of outside scholarships that the student actually had to “earn”.</p>

<p>Doesn’t a student “earn” an institutionally based merit scholarship based on his/her performance in high school?</p>

40

<p>Is it earning, or is it the college saying that Johnny may attend for 35,000 rather than 50,000/year because he offers something to us? It might be his singing voice, his SAT scores that will boost rankings, the fact that your zip code indicates that you are good bet that Johnny won’t require too much additional aid and that he is a just a solid student and clearly will be involved on campus, etc.? Did he earn 15,000, or did the college make a decision to discount Johnny’s seat in exchange for whatever he will bring to their campus?</p>