need-based aid vs. merit aid

[Anonymous]

Jon Boeckenstedt, associate vice president for enrollment management and marketing at DePaul University in Chicago, said discounts for upper-income families help many colleges collect the revenue they need to help students who are less affluent. “It’s not a zero-sum game,” he said. DePaul, the nation’s largest Catholic university, reports giving an average of about $10,000 a year in no-need aid to 22 percent of freshmen. But it also gives an average need-based grant of more than $11,000 to 61 percent.

http://www.washingtonpost.com/local/education/colleges-often-give-discounts-to-the-rich-but-heres-one-that-gave-up-on-merit-aid/2014/12/29/a15a0f22-6f3c-11e4-893f-86bd390a3340_story.html

If I'm reading this right, it means that they grossly over inflate tuition, to the point where even giving a "discount" to some kids brings in so much money that they can outright transfer some of the discounted amount to kids who can't afford to pay. In other words, some kids whose families are deemed capable of paying are punished for their parents' scrimping and saving--or worse, are obligated to take on debt-- and pay over inflated prices so that other kids can be given very large need-based grants. I find this completely outrageous. And how is not a zero-sum game?

[Anonymous]

It's not outrageous. Schools can engineer their costs and financial aid and the demographics of their student body any way they see fit. They clearly see some advantage in drawing students from a wider variety of SES backgrounds.

Your kid doesn't have a right to go there. It's a privilege. If you don't want to pay the asking price and you don't see an advantage, then go somewhere else. Kids in high SES have a ton of advantages. The absence of financial aid from a handful of schools doesn't even begin to level the playing field.

[Anonymous]

Depaul is an interesting study. 2591 freshmen in the last class, and about 2200 received some sort of financial aid. With the total annual cost around $45,000 the average need based student paid $34,000 and the average merit based student paid $36,000 which is a much closer set than almost any other school. If you compared to a NESCAC school you would see there the average need based student pays half price and there is no merit aid, so the other half is full-pay. At Depaul the athletes (the smallest group) had the lowest average cost with average grant near $25,000. Grouping all of those together approximately 15% paid full price. They are apparently neither needy nor overqualified for Depaul. That's the tough luck crowd.

There are many different structures. Most state schools have lower prices and much lower need based aid. The wealthiest institutions want to preserve the tax free status of their endowments. Politically they give a good amount of need based aid while still maintaining demand from full-fare families. That group is probably paying the most incremental cost over the average. See NESCAC example above.

The common data set can give you a very large amount of information on the average net tuition revenue for a school. From their perspective a $10,000 merit aid "discount" to a student who has scores above their mean is still an above average net collection. A large group of private colleges are seeking that market, particularly those who are not the most selective.

[Anonymous]

Anonymous[b wrote:]It's not outrageous[/b]. Schools can engineer their costs and financial aid and the demographics of their student body any way they see fit. They clearly see some advantage in [b]drawing students from a wider variety of SES backgrounds. [/b]

Your kid doesn't have a right to go there. It's a privilege. If you don't want to pay the asking price and you don't see an advantage, then go somewhere else. Kids in high SES have a ton of advantages. The absence of financial aid from a handful of schools doesn't even begin to level the playing field.

You gotta be f'ing kidding me. Of course it's outrageous. Schools don't have to pay for lower SES kids, full pay parents do.

[Anonymous]

Anonymous wrote:It's not outrageous. Schools can engineer their costs and financial aid and the demographics of their student body any way they see fit. They clearly see some advantage in drawing students from a wider variety of SES backgrounds.

Your kid doesn't have a right to go there. It's a privilege. If you don't want to pay the asking price and you don't see an advantage, then go somewhere else. Kids in high SES have a ton of advantages. The absence of financial aid from a handful of schools doesn't even begin to level the playing field.

I agree with this, and I say this as someone who has a fairly high HHI (although perhaps not by DCUM standards). We will have an estimated family contribution of about $45k, which means DC will qualify for some financial aid at schools that guarantee to meet need.

But DH and I don't think we can really afford to pay $45k. We view $30k/year as more realistic for us. So we have set our sights on in-state publics for DC. DC is welcome to apply to other schools, but those schools will be not be considered unless they pony up merit aid to bring the cost very near $30k/year. If they don't, no problem--plenty of in-state options available. Our DC has had many advantages, and attending a state school will not do him any noticeable disservice.

[Anonymous]

Anonymous wrote:

Anonymous wrote:It's not outrageous. Schools can engineer their costs and financial aid and the demographics of their student body any way they see fit. They clearly see some advantage in drawing students from a wider variety of SES backgrounds.

Your kid doesn't have a right to go there. It's a privilege. If you don't want to pay the asking price and you don't see an advantage, then go somewhere else. Kids in high SES have a ton of advantages. The absence of financial aid from a handful of schools doesn't even begin to level the playing field.

I agree with this, and I say this as someone who has a fairly high HHI (although perhaps not by DCUM standards). We will have an estimated family contribution of about $45k, which means DC will qualify for some financial aid at schools that guarantee to meet need.

But DH and I don't think we can really afford to pay $45k. We view $30k/year as more realistic for us. So we have set our sights on in-state publics for DC. DC is welcome to apply to other schools, but those schools will be not be considered unless they pony up merit aid to bring the cost very near $30k/year. If they don't, no problem--plenty of in-state options available. Our DC has had many advantages, and attending a state school will not do him any noticeable disservice.

But what would you do if your DC insists on attending 60k/year school (i.e., "dream school")?

[Anonymous]

Anonymous wrote:

Anonymous[b wrote:]It's not outrageous[/b]. Schools can engineer their costs and financial aid and the demographics of their student body any way they see fit. They clearly see some advantage in [b]drawing students from a wider variety of SES backgrounds. [/b]

Your kid doesn't have a right to go there. It's a privilege. If you don't want to pay the asking price and you don't see an advantage, then go somewhere else. Kids in high SES have a ton of advantages. The absence of financial aid from a handful of schools doesn't even begin to level the playing field.

You gotta be f'ing kidding me. Of course it's outrageous. Schools don't have to pay for lower SES kids, full pay parents do.

True. And if full pay parents don't want to do that, they can send their kids elsewhere. Problem solved. There are plenty of colleges that provided limited aid to low-income students.

Here's an article that neatly outlines the advantages of upper income students relative to lower income students. The case is clear. Quit bitching.

http://www.thecollegesolution.com/do-need-blind-colleges-really-exist/

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It's not outrageous. Schools can engineer their costs and financial aid and the demographics of their student body any way they see fit. They clearly see some advantage in drawing students from a wider variety of SES backgrounds.

Your kid doesn't have a right to go there. It's a privilege. If you don't want to pay the asking price and you don't see an advantage, then go somewhere else. Kids in high SES have a ton of advantages. The absence of financial aid from a handful of schools doesn't even begin to level the playing field.

I agree with this, and I say this as someone who has a fairly high HHI (although perhaps not by DCUM standards). We will have an estimated family contribution of about $45k, which means DC will qualify for some financial aid at schools that guarantee to meet need.

But DH and I don't think we can really afford to pay $45k. We view $30k/year as more realistic for us. So we have set our sights on in-state publics for DC. DC is welcome to apply to other schools, but those schools will be not be considered unless they pony up merit aid to bring the cost very near $30k/year. If they don't, no problem--plenty of in-state options available. Our DC has had many advantages, and attending a state school will not do him any noticeable disservice.

But what would you do if your DC insists on attending 60k/year school (i.e., "dream school")?

We're in this boat now. Admitted to dream school with no aid and we can't pay full tuition. Look it sucks but if we can't afford it, we can't afford it. DD is screaming about taking out loans and I'm teaching her about budgeting for life. Housing, transportation, insurance, food, clothing, utilities, and entertainment. We're looking at starting salaries for her field-- taking out taxes and 401k. You know what-- she doesn't have enough money left over to pay her loans.

She's mopey and pissed off at us. But we can't afford it. She knew before applying that without aid she could not attend but she believed aid would come. It didn't and my heart breaks for her. But this is the reality of life.

[Anonymous]

Agree with you PP. We could not afford the so-called "dream" school. Lots of crying at the time. 7 years later...DD is doing just great... in the "real" world and yes without a degree from the so-called "dream" school. This probably won't go down well on this board...but that is reality folks...

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It's not outrageous. Schools can engineer their costs and financial aid and the demographics of their student body any way they see fit. They clearly see some advantage in drawing students from a wider variety of SES backgrounds.

Your kid doesn't have a right to go there. It's a privilege. If you don't want to pay the asking price and you don't see an advantage, then go somewhere else. Kids in high SES have a ton of advantages. The absence of financial aid from a handful of schools doesn't even begin to level the playing field.

I agree with this, and I say this as someone who has a fairly high HHI (although perhaps not by DCUM standards). We will have an estimated family contribution of about $45k, which means DC will qualify for some financial aid at schools that guarantee to meet need.

But DH and I don't think we can really afford to pay $45k. We view $30k/year as more realistic for us. So we have set our sights on in-state publics for DC. DC is welcome to apply to other schools, but those schools will be not be considered unless they pony up merit aid to bring the cost very near $30k/year. If they don't, no problem--plenty of in-state options available. Our DC has had many advantages, and attending a state school will not do him any noticeable disservice.

But what would you do if your DC insists on attending 60k/year school (i.e., "dream school")?

"Insists?" How, pray tell, will he do that? Does he have an extra $120k sitting around that I'm not aware of?

Seriously, though: by law, he can borrow on his own only a TOTAL of $31k over 4 years. He can't borrow more than that without a co-signer. We won't do it. So he can insist all he likes, but he won't be able to pay for it.

DS is well aware of our financial limitations. We clearly informed him when he was a sophomore that our limit is $30k per year, that he can borrow up to the Stafford limits if he wants to, but that there is nothing more after that. So that means he is limited to about $35k for tuition and room and board. He understands that private/OOS schools that give only financial aid are essentially off the table.

[Anonymous]

Anonymous wrote:Agree with you PP. We could not afford the so-called "dream" school. Lots of crying at the time. 7 years later...DD is doing just great... in the "real" world and yes without a degree from the so-called "dream" school. This probably won't go down well on this board...but that is reality folks...

PP with the $30k limit. I feel exactly the same as you. Shit, maybe DC would like a pony and a new car, too. So sorry, that's not happening.

I know it is not the fashion, but honestly setting a $30k/year limit on college is not something I feel particularly bad about.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Agree with you PP. We could not afford the so-called "dream" school. Lots of crying at the time. 7 years later...DD is doing just great... in the "real" world and yes without a degree from the so-called "dream" school. This probably won't go down well on this board...but that is reality folks...

PP with the $30k limit. I feel exactly the same as you. Shit, maybe DC would like a pony and a new car, too. So sorry, that's not happening.

I know it is not the fashion, but honestly setting a $30k/year limit on college is not something I feel particularly bad about.

If there were more parents like you, I very much doubt college tuition would have increased as much as they have in recent years.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It's not outrageous. Schools can engineer their costs and financial aid and the demographics of their student body any way they see fit. They clearly see some advantage in drawing students from a wider variety of SES backgrounds.

Your kid doesn't have a right to go there. It's a privilege. If you don't want to pay the asking price and you don't see an advantage, then go somewhere else. Kids in high SES have a ton of advantages. The absence of financial aid from a handful of schools doesn't even begin to level the playing field.

I agree with this, and I say this as someone who has a fairly high HHI (although perhaps not by DCUM standards). We will have an estimated family contribution of about $45k, which means DC will qualify for some financial aid at schools that guarantee to meet need.

But DH and I don't think we can really afford to pay $45k. We view $30k/year as more realistic for us. So we have set our sights on in-state publics for DC. DC is welcome to apply to other schools, but those schools will be not be considered unless they pony up merit aid to bring the cost very near $30k/year. If they don't, no problem--plenty of in-state options available. Our DC has had many advantages, and attending a state school will not do him any noticeable disservice.

But what would you do if your DC insists on attending 60k/year school (i.e., "dream school")?

We're in this boat now. Admitted to dream school with no aid and we can't pay full tuition. Look it sucks but if we can't afford it, we can't afford it. DD is screaming about taking out loans and I'm teaching her about budgeting for life. Housing, transportation, insurance, food, clothing, utilities, and entertainment. We're looking at starting salaries for her field-- taking out taxes and 401k. You know what-- she doesn't have enough money left over to pay her loans.

She's mopey and pissed off at us. But we can't afford it. She knew before applying that without aid she could not attend but she believed aid would come. It didn't and my heart breaks for her. But this is the reality of life.

+1

DD just got accepted to her first choice. $65K tuition for her first year. We said NO. We'll pay for in-state tuition. She's unhappy, but we can't gut our retirement fund to send her to her dream school. We have four kids. If we paid full freight, we'll have nothing for retirement. Even paying in-state tuition will be a huge stretch for us. If DH loses his job, we're sunk. We told her this before she applied, but she was dreaming that they'd want her so much that they'd give her lots of $$. Sadly, that wasn't the case.

What bothers me is why these schools charge so much money!! DDs dream school has a brand new $60 million art center and a $60 million sports complex. Why do they need all these facilities? Why not use the old buildings and charge $30K? It's the classes and kids that matter, not the shiny new buildings.

[Anonymous]

They are charging $30k---just not to your kid. No school comes close to $65k for all students. They decide who they charge how much and you decide if you agree. Tough business for parents in your shoes. Doesn't make for happy dinner conversation.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It's not outrageous. Schools can engineer their costs and financial aid and the demographics of their student body any way they see fit. They clearly see some advantage in drawing students from a wider variety of SES backgrounds.

Your kid doesn't have a right to go there. It's a privilege. If you don't want to pay the asking price and you don't see an advantage, then go somewhere else. Kids in high SES have a ton of advantages. The absence of financial aid from a handful of schools doesn't even begin to level the playing field.

I agree with this, and I say this as someone who has a fairly high HHI (although perhaps not by DCUM standards). We will have an estimated family contribution of about $45k, which means DC will qualify for some financial aid at schools that guarantee to meet need.

But DH and I don't think we can really afford to pay $45k. We view $30k/year as more realistic for us. So we have set our sights on in-state publics for DC. DC is welcome to apply to other schools, but those schools will be not be considered unless they pony up merit aid to bring the cost very near $30k/year. If they don't, no problem--plenty of in-state options available. Our DC has had many advantages, and attending a state school will not do him any noticeable disservice.

But what would you do if your DC insists on attending 60k/year school (i.e., "dream school")?

We're in this boat now. Admitted to dream school with no aid and we can't pay full tuition. Look it sucks but if we can't afford it, we can't afford it. DD is screaming about taking out loans and I'm teaching her about budgeting for life. Housing, transportation, insurance, food, clothing, utilities, and entertainment. We're looking at starting salaries for her field-- taking out taxes and 401k. You know what-- she doesn't have enough money left over to pay her loans.

She's mopey and pissed off at us. But we can't afford it. She knew before applying that without aid she could not attend but she believed aid would come. It didn't and my heart breaks for her. But this is the reality of life.

So basically, she can't attend dream school because she can't pony up the extra 10k of tuition for another student whose parents didn't plan for college. And that becomes your problem. Charming.