Were You a Financial Aid Bait-and-Switch Victim?

Paying for College
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<p>Some colleges practice what is known as "front-loading." That's when they offer a juicy freshman financial aid package in order to entice high school seniors to enroll. But then subsequent aid packages may be lower and will often include less grant and more loan.</p>

<p>Some families are told from the get-go that their aid will go down after the first year, even if their income and assets remain consistent, but many parents seem to be blind-sided by declining grants. </p>

<p>Parents who have been through the admissions maze before usually know to ask if aid will stay roughly the same for four years, but those who are new to the process may feel as if they were duped.</p>

<p>Did this happen to YOU?</p>

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<p>I am pleased to report that my D’s aid at Vanderbilt got better every year.</p>

<p>My S’s aid would have decreased, had he stayed at his freshman year school. That was not bait & switch, though … he didn’t maintain the scholarship GPA, and our EFC was too high for grant aid.</p>

<p>I do know from professional experience that awards can decrease over time. That is not always intentional, though. Where I used to work, there were so many 0 EFC students that SEOG ran out early. It was awarded first to freshmen, then to upperclassmen - so if the upperclassman didn’t get everything set (including verification) really early, SEOG was out of the picture. It didn’t always happen, but after the big drop in the economy, there were more eligible students & not enough SEOG to go around. Institutional aid was at a premium, as well. The philosophy did not include intentional drops after freshman year, but it could happen.</p>

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<p>The university of Cincinnati was very upfront about the fact that they front loaded their aid packages. But as many of their programs were co-ops they felt that you would be earning money and that would off set the decrease in aid.</p>

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<p>Parents and students are supposed to be told that being eligible for SEOG (Supplemental Educational Opportunity Grant) doesn’t guarantee it. As kelsmom has pointed out, there often isn’t enough money to fund all who qualify. But I fear that most folks treat the “If available” clause too casually. After decades of reading warnings of unlikely side effects on medicine bottles (and my son once got a Frisbee that said “Choking Hazard” on the package!), we all tend to become immune to alerts and think that they don’t affect us. But I wish that financial aid offices would be clearer and more insistent when telling parents of incoming frosh about the likelihood (or not) of a SEOG grant being renewed.</p>

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<p>Don’t know, yet…freshman daughter won’t know next year’s package until the end of May, but I will definitely post an answer then. The wait is excruciating! We had to scramble last year to get in documents for an earlier deadline, but at least we knew earlier what the offers were. Now that we are ‘in’ and awaiting, it’s hard to not know if the offer will be consistent or decrease. In addition, the cost of attendance is rising.</p>

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<p>Wow, lawrencemom, that totally seems fishy! I’m sorry for you. It seems that if a school decreases its fa packages, they should be completely transparent about the possibility of that happening so that families have plenty of time to prepare. That would mean, in my mind, that they should have notified you a while ago!</p>

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<p>With my kids, the need-based aid was variable because of our income and the number of kids in college. We only have one kid in college (Furman) now and he has a very big scholarship that will not increase across time. He has no need aid other than a small Stafford loan eligibility. They were very clear in the letter about expectations (GPA, major). My daughter is graduating from Grinnell and they were wonderful with increasing the scholarship amount as tuition rose. She was given an additional named scholarship her last two years. When her brother entered college, she was given need-based grant money (as was her brother at his school.) Berry College swapped need-based grant money for scholarship with my son. He made good grades, the need aid eliminated and he was given a named scholarship that required that his GPA remain over a 3.2 for his second year.</p>

<p>The biggest problem is with need-based grants is they are not a source one can count on. They fluctuate from year to year depending on the number of dependents in the home, number of children in college, how much money the student earns in the summer and family income (can really be knocked out if one inherits money from the estate of a relative). Grants do not operate like scholarships do and some grants are named as “scholarships” (read the fine print). </p>

<p>With our kids, we went with the biggest merit offerings in college choice. Colleges can and do swap out grant monies with loans for returning students who have lower college GPAs and limited/no involvement with campus activities. Some schools were quite frank about doing this more with lower GPA kids (under 3.0).</p>

<p>My kids went to college knowing they would need to keep the GPA over a 3.0 (and higher) in order to be looked upon favorably by financial aid.</p>

<p>I feel for you Lawrencemom. With all three LACs I have had kids in, the returning need aid was never determined until early June. That is way to late to change plans for your student.</p>

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<p>I have seen some pretty egregious practices by law schools in this regard. A friend of my son’s accepted the law school with the lowest cost for her (she hadn’t applied to any that she wouldn’t want to go to) and had a very generous scholarship that was contingent on keeping a 3.0. Only problem? They had given scholarships to 75% of the 1L class, all dependent on keeping a 3.0 but they didn’t point out that they curve to a 2.8. So the law school knew up front that a lot of the kids would not keep the scholarships. When my son was evaluating his scholarship offers, luckily his first choice (William & Mary) only requires a 2.0 to keep the scholarship and curves to around a 3.0. Even if it hadn’t been his first choice to start with, that would have pushed it over. Just finished his first year and has loved W&M!</p>

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<p>Haven’t had this happen to us. Best practice was at UIUC, where they state tuition will stay the same all 4 years after you are admitted, so you know if you maintain your GPA your costs will remain the same.</p>

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<p>I googled “colleges that front load aid,” and found this entry for the Times Choice blog. It says that although there is no compiled list, overall, a study indicates The average net price for returning students is $1,400 more, and that the net discount is about 5 per cent for freshman tuition. </p>

<p>[Part</a> 3: Answers to Readers’ Questions on Financial Aid - NYTimes.com](<a href=“http://thechoice.blogs.nytimes.com/2012/04/25/kantrowitz-finaid-offers-part-3/]Part”>Part 3: Answers to Readers' Questions on Financial Aid - The New York Times)</p>

<p>This article from Higher Ed Digest says the practice is for merit not need based aid.</p>

<p>[Datatel:</a> Selected Papers: “Front-Loading” Merit-Based Financial Aid Can Positively Impact Enrollment](<a href=“http://www.internetviz-newsletters.com/datatel/e_article000347626.cfm?x=b11,0]Datatel:”>http://www.internetviz-newsletters.com/datatel/e_article000347626.cfm?x=b11,0)</p>

<p>Implies that the practice is to increase freshman yield.</p>

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<p>I have a friend whose daughter had to transfer to a community college the 2nd year because of a reduced grant. My son recieved a 21K grant from CMU that indicated in bold red letters that it was not a guaranteed renewal. We opted for a less expensive school (that he loved) with a 12k renewable scholarship requiring a minimum 2.8 GPA.</p>

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<p>Be very careful when you read the scholarship offers. Some of them are renewable, but you have to maintain a fairly high GPA. Other scholarships are one-time awards. All the schools we’ve dealt with were good about clearly stating their renewal requirements both in the award letter, and on the schools’ financial-aid websites. The most disappointing issue we faced was discontinued funding of the Michigan Promise scholarship program when my oldest was a freshman. She missed-out on the “promise” of a $4000 state merit scholarship. Michigan Competitive Scholarship funding has varied, too, and sometimes final awards weren’t calculated until several weeks after fall semester started. So beware anything that mentions an award being dependent on funding levels!</p>

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<p>I too, am one of those awaiting the 2nd year package and hoping that son’s FA was not front loaded. My son received a merit scholarship which, assuming he meets the GPA requirement which is 2.7, (which as I told my son, is quite reasonable and the school’s FA wouldn’t be the only problem he would have if his GPA went below that) is guaranteed, however it also doesn’t rise, it’s guaranteed at the same amount. Tuition on the other hand is going up, and required meal options for sophomores are the same price no matter which you choose and he is required to live on campus for 2nd year too, and I believe he’s in the lowest priced dorm he can be in, so I know costs are going up. Son’s aid is split about half and half between merit and need based. Son is at Tulane, if anyone wonders. Need based aid only has a 2.3 GPA requirement, is renewable and according to the guide to FA, the university feels a special commitment to continue assistance to students who enter on need-based aid, fill out forms by the deadline, continue to have need and meet academic standards. </p>

<p>There are some quirks in their system though, particularly the fact that once need is determined, then merit determines what percentage, if any, of the package is made up of the need-based scholarship. I don’t really understand this part, I guess they’re saying if you have need, but didn’t qualify for a merit scholarship, they gap you? Or maybe put parent plus loans, because as far as I can tell, they don’t use parent plus loans as part of their FA packages, they do offer them as an option if you can’t meet your EFC. I’m assuming that since the merit is guaranteed renewable if you meet the GPA standard, that the merit decides proportion of need-based scholarship, is based on what is determined when the student is admitted and not on merit for each college semester, but I don’t know this for a fact and since son’s freshman year GPA probably isn’t going to be as good as his GPA for all of high school, I’m not sure what effect that might have. </p>

<p>To make it even more interesting, they do have a no-loan guarantee for tuition, fees and oddly enough transportation expenses if the AGI is below $75,000. I was worried at first, they would apply all the free money to the this portion of the COA, leaving loans and a gap to cover the rest, but it doesn’t seem to work quite that way. Son does have subsidized Stafford and a small Perkins loan, (not the maximum) in his package plus work-study, which doesn’t add up to the rest of the COA, but he does get some of the no-loan scholarship as well, which is renewable per the need-based GPA requirement. Maybe they have an unpublished loan limit guideline for the students so they don’t wind up owing a ton in loans. It’s all very confusing and until I see his first renewal FA package, I’m going to worry, alot, probably. I’m hoping the non-merit aspects cover the COA increase, because one thing that isn’t considered in the COA, but is mandatory, is health insurance, and this first year we took out the universities plan, because I didn’t have time to find a Texas plan that would be suitable, which was an expense I didn’t really budget for. I knew if was required, I just figured it was in the COA, and didn’t really realize until right before the deadline. The insurance is pretty good, but also pretty expensive. </p>

<p>I asked the questions I knew to ask, but with so much involved, I worry I may have overlooked something.</p>

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<p>Conservatories are notorious for “front-loading” awards. It’s hard to break off a relationship with a teacher and classes are difficult, if not impossible, to transfer. Kid’s watch their awards decreased and their loans increased while they hear of offers made to entice incoming students.
Thinking back, those “appeals” you make when the initial award letter comes with the acceptance and the “extra” money has to come from somewhere- turns out it comes from the upperclassmen’s awards.</p>

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<p>Only private schools that were considered were schools that met 100% need.
Stafford loan did increase after freshman year, as expected. Perkins loan stayed the same, grant increased small amount, EFC was similar.</p>

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<p>TJMom: </p>

<p>That law school system reportedly is extremely common. Law school students think they will have no trouble maintaining a 3.0 or a 3.2 because they did well undergrad, but don’t understand the curving system in Law School. The Law School knows that most of the students won’t be able to maintain their merit money, but the students don’t realize it. As a result, the amount of loans can unexpectedly double or people drop out with a half-finished degree.</p>

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<p>My d goes to Smith College, a meets-need-100% school. I asked them explicitly before she committed if they practiced “bait-and-switch.” The told me point blank no; if our finances stayed about the same, we could expect to get the same kind of package in subsequent years. We are waiting now to find out what her aid will be for next year; am also wondering how they re-calculate given the increase in school costs. Will update.</p>

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<p>They had an article about merit scholarships at law schools in the New York Times magazine in the past year detailing this problem. I was surprised at the very high percentage of law students that are offered these scholarships based on maintaining a GPA knowing that many would lose the FA. One school offered a guaranteed four year package without any GPA stipulations that was not as high as the annually renewable package and nearly all the kids opted for the latter. The law schools had little sympathy for the students since they felt that these kids were especially in a position to comprehend a competitive scholarship offer.</p>

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<p>Maybe the law school front loading is a test! If you don’t read the fine print and do some research about your school and the scholarship, maybe you shouldn’t be a lawyer…</p>

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<p>Haha…yes the fine print is something that everyone should look out for. This made me laugh.</p>