<p>Do colleges get money from a third-party for need-based grants, or do they pay it out of their own pocket?</p>
<p>Depends on the school. Some schools will only have need based grants from the federal government (Pell where the max is $5645 for a student with a 0 EFC).</p>
<p>Some schools have deep pockets where they can afford to give need based aid out of their own pockets (example Harvard’s endowment is ~ $30 billion)</p>
<p>Some schools have endowed scholarships that are earmarked for studens who meet certain criteria.</p>
<p>Interesting. Do you have a source?</p>
<p>Another source, from tuition paid by “full pay” students. Yes, in addition to paying for your own kid you get to help pay for someone else’s kid.</p>
<p>Each school has a breakdown, and sometimes you can get a pie chart or some numbers in the materials that is provided. </p>
<p>Foomon, most schools I have seen show a cost per student that is LESS than full pay amounts. It’s more that the full pay or those who pay are suppelemented less. Again, specific numbers vary, and go all over the place school to school, and you have to research this per school. Harvard’s breakdowns are going to look quite different from State U’s or school without that kind of endowment. But even among schools with like endowments, the pie charts can look quite different. </p>
<p>Most school do not meet full need for all of their students , particularly as defined by FAFSA. I don’t know a single school that guarantees to do so. Many schools will give the student whatever federal and state entitlements in the package even though the school itself isn’t giving out that money and the same amounts would be dispensed just about where ever the student might have chosen to go to school (state and COA limits in force, of course), and then throw PLUS, the Parent DIrect loans in as though they even could be offered by the college,which they cannot (parents have to apply and qualify, not an auto thing).</p>
<p>Most of it is from the generous donations of alumni and the endowment (of course most of the endowment is from the generous donations of the alumni followed by prudent investing from the capital management team). </p>
<p>It is true that many private schools will set the tuition to “what the market will bear” and use some of those funds to create need based scholarships. </p>
<p>Some schools set the list price to what others set their list prices too and then offer merit scholarships to get people to actually go there, meaning that the market didn’t actually bear those original numbers.</p>
<p>At some schools, the % of students on need based and/or merit based aid of some sort far exceeds those who aren’t. At some small private midwestern schools, I saw some stats like 90% getting some sort of discount. In such cases, it’s pretty clear that what Classic Rocker Dad is saying is happening.</p>
<p>Look at the general endowment fund. A very crude measure would be the endowment divided by the total number of undergrads. Princeton wins at $2-ish million per student so they can hand out generous aid. Harvard has the largest endowment fund but it also has more students, so the per student figure is a “mere” $1.5 million.</p>
<p>I think a lot of the endowment funds which are spent each year are used to fund grad students and faculty research. Of course figuring out where need based aid money comes from is difficult to find out. With a reason I believe.</p>
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<p>Most of university research, whether by grad students or faculty, is supported by outside grants, either from Govt (State, Federal, etc.) or Private sources. A large amount of any researcher’s time is spent writing grant proposals to support their work.</p>
<p>The end result is actually the opposite, rather than giving money for conducting research, colleges take a cut of all grant monies coming in as overhead charges. And nowdays, much research is being done not by tenure track profs, but by adjunct faculty on soft money, who have to get grants funded in order to support their salary.</p>
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<p>Yes, every time I get a bill from my kid’s college ;).</p>
<p>It shows Institutional grants (from the general endowment) and an endowed scholarship (for which the student is requested to write a short blurb about her academic and EC activities for the previous year to give to the donor.)</p>
<p>Great information. Thank you.</p>