The upside is not running a ginormous deficit, having their bond rating go down, getting put on a warning list for financial instability.
Where do you think this endless pot of money comes from?
You think it makes sense to offer aid in the first year that would then be cut by 60% in the second year?
Surely it would be fiscally more responsible to offer a substantially smaller aid package in year one than to reduce year two aid so dramatically?
I’d venture, if this were policy, alarming numbers of students wouldn’t return for year two, word would get out, applications would plummet, the college would soon be hurting financially.
OP. Like everyone else, I think you’re only getting part of the story.
It makes no sense- but the point is that OP is worried that there’s some nefarious strategy going on to cut aid to which a student is entitled under the college’s policy… and a poster asked what’s the upside to cutting aid.
I’m pointing out that if a college’s finances are so precarious that it indeed has a strategy to cut aid in subsequent years- that’s a problem.
But otherwise- there are likely some facts NOT in evidence here, and the cut in aid was due to an increase in assets, income, reduction in family size, etc.
Seems the first respinse we often see, for belt tightening, has been eliminating or modifying MFN policies. Not slashing aid to a few families.
And a major change to MFN could probably be found in public info.
A college with financial difficulties may reduce FA as one part of its budget balancing methods. It may also note that frosh tend to cost less than upper level students to educate, since frosh are more likely to be in bigger more generic courses that do not require specific faculty members in a specialty subarea to teach.
I get that but the OP is talking about a 60% reduction.
The OP is talking about a 60% reduction which did not happen to HIM. So he doesn’t know the numbers which form the basis of the aid- just the parent’s belief that the aid was cut drastically for no reason.
Yes, I understand that. Hence my question.
"Can anyone see any upside for a college if they decreased aid so dramatically for a student?
I can’t.
I have never heard of a college systematically cutting financial aid 60% for future years. Not say some of the ones in pure crisis have not, but I’ve not heard of such policies.
When policy changes are made, current students are almost always grandfathered in.
Several schools have been asked about stories regarding reducing financial aid Formulas for upperclassmen, and the response has been that this is not true and that other issues were at play for the anecdotal reductions.
One of my friends was quite upset at a significant loss in financial aid when some company payout that was crucial for them to parlay into a business was counted as income. Appeals did not work so they just pulled the kids from school that year. The subsequent year showed a low income even with small business worth and expenses added back into the picture. The kids worked for that startup that first year for no pay and resumed college the next with good financial aid. With planning and a few aggressive moves, they were able to maximize financial aid. Had the fin aid officer given them a little play that pay out year, the school would have saved money. But they stuck to their rules, and then the tiles got stuck to them.
This is many years ago so maybe things have changed, but I attended a private school where financial aid packages were rewritten at the end of the first semester and the aid adjusted retroactively. All the students I knew (from all income levels) had an appointment with the bursar’s office at the end of the semester. Many of us ended up with an additional loan where a grant had been. There was no change in income, no change in family circumstances, just a drop in aid. I
I refused to return and I know there were others who planned not to go back because they couldn’t afford to take on that additional debt for 8 semesters either. So I would believe that there are others out there balancing their budgets on the backs of the students.
@austinmshauri , what school did that?!
Some schools require parents and students to notify the school if there is a change in financial situation during the year. You agree to this when you accept your package. Case Western had such a clause. But I’ve never heard of a systematic change in financial aid, turning grants to land, mid semester. If verification is requested, or some change in circumstances occurs, a mid year review might be in order. I would think changing aid retroactively causing debt would not be legal. Surely, this did not continue.
Well…back in the Stone Age, I was on a first name basis with the financial aid office at my college. I was regularly there begging for more money…every single term, and often in the middle of the term. We completed whatever financial aid application form was required…was it the FAFSA back before 1973?
Still…these folks listened to me…and I seldom walked away without something…an increase in my work study, or a small grant or something.
But that’s just not how it works now…it just isn’t.
Like others, I believe the OP only has part of the story about this aid decrease. He is reading on Facebook where, let’s face it, many folks only tell part of the story.
Unless this OP has looked at the actual financial aid application forms, and award letters for these students, I just think he needs to let this go.
If he is really concerned, call the financial aid office and tell them what you have heard…and ask if this is policy. My guess is they will say no…but that aid aid in subsequent years is dependent on the new financial aid application forms completed annually…
Although asset numbers are based on the day the financial aid forms are completed, that’s not how it works with income. Income is based on what was earned over the entire calendar year that the forms are asking about. Can’t remember income numbers from two years ago? Look at your tax return for that year. You do save copies of your tax returns… right?
Too late to correct, but the last year I have in my post should be 2018. Not 2028.
Rochester is on this “top 10 frontloading aid” list.
However, so is Northeastern, which guarantees same net cost all 4 years. This list is from 2015 so may not reflect that change, or others. As mentioned earlier Albright is on it though they went to meet-need for new students only during that time.
Other examples I found were outside one year scholarships going away and not being replaced by the institution (probably not common at meed-need schools), losing a merit scholarship and income/asset/family-in-college changes.
In my kids’ experience, a bit more is expected each year from the student, not the family, and it’s explicitly stated, with amounts. First year students have a lower summer/work study expectation than upperclasspeople.
One more from UR: http://www.campustimes.org/2016/09/11/students-urs-financial-aid-theories-dont-always-match-reality/
^ second job seems to be the issue
A lot of colleges don’t give transfer full need awards which can account for some of the results. Also some non need blind schools do not give aid to upper class men who did not apply for aid freshman year. There are schools that do not give much if any additional aid after freshman year financial aid—even if needs arise like a sibling going to college. Or if a student loses a merit award by breaching the terms of the award by taking a leave of absence or not making gpa standards, and the ensuing financial need is not met by aid. A sign of such schools is often that only FAFSA is filed after the initial PROFILE, meaning only government aid will be given if need changes, not university finds.
In the case of Albright, they are meeting full need based on FAFSA EFC, but only for new students.
Schools like NEU with co-ops skew the results too
It’s important for parents and students to inquire how future aid is given and if changes in family situation , loss of scholarship money would be covered by financial aid This where do many financial fail. Not enough information about the terms of the aid package.
There isn’t any mention of schools that very specifically give more aid to freshmen, like a year or two of housing or book money allowances. There are also schools that charge more for jr/sr status.
My daughter’s school charged more for freshman meal plans (yes, because we all know freshmen eat more than upperclassmen!) so if the school was giving a full ride, with room and board, that amount would have been $1000 less for upperclassmen. She also got less in her Bright Future award for senior year because she’d used up her credits. She only got 120 credits paid for by BF and she need 131 to graduate, so by spring of senior year I think she only had 3-4 credits left.
Some schools make no guarantee of meeting full need. That you happen to get it freshman year doesn’t mean you will in future years, if your need changes or if part of the package is comprised of merit awards you lose, if prices go up, if upperclass housing costs more, if your EFC goes down due to unforeseen, uncontrollable events like job loss , Illness of a parent, a sibling going to college ,etc etc. i can list quite a few things
But it’s a whole other thing from extra need cropping up to a college cutting financial aid drastically when the financial situation is about the same. That, is inexcusable , IMO. Who can sleep at night if your kid on financial aid is at risk of having the financial rug pulled out from under him for no reason that makes any sense? This, even at schools that do not guarantee to meet full need. That freshman award should be guaranteed , all things equal, with clearly stated caveats.
As for those schools that guarantee to meet full need, it’s even more of a breach of trust when aid is decreased even as costs go up. There are reasons that can be legitimate for this scenario, but when that happens, it should be made very clear what the change of circumstances are to evoke a lowering of financial aid.