<p>Well put, cptofthehouse. I am guessing that if one of dd’s top choices would have thrown her $10K, we would have thrown in the other $40K. As tuition continues to skyrocket, those $10K scholarships help fill the gap.</p>
<p>The school had $100K when they gave, e.g., $10K to the wealthy, but in the new system they would have $110K available, because the wealthy paid full list.</p>
<p>The top schools do not have to offer merit aid to get the students they want and need. Families will sell a kidney or a kid to get one into HPY. They’ll gladly take out loans, take a second job, drain the pension fund. With absolute pride and delight. But for a college that is a fine school but without the world wide reputation, that’s a whole different story.</p>
<p>I kinda feel that way too. I hesitate to recommend a school that is hardly ever mentioned on CC if at all, that is private, known locally, and is very expensive to someone who is going to have to take out a lot of loans to go there. But if it were Princeton, that would be a whole other story. There is a cachet to having a degree from some of these schools that definitely has a dollar valued to some folks. HPY, MIT, Columbia, Stanford, Julliard, Wharton, elicit a reaction that is definitely different from many schools. I would not debate NYU vs Brown vs Northwestern vs Boston C vs Vanderbilt, all fine colleges and roughly equivalent, but the first group does stand out alone internationally as well as nationally.</p>
<p>I was at a wedding this weekend with guests from Australia, England, Africa, China…and from about 20 states ranging from Oregon to Florida. The groom went to a college in Oxford, and that got the name recognition immediately. I can’t even tell which school there, doesn’t even matter. The bride went to a school that is top 50 but got polite blank looks. Few folks knew where it was or anything about it. But the Columbia, MIT, HPY kids, and there were some there, all got smiles of recognition and yes, they were impressed. Cornell? Again blank looks. The same with NYU. There is a name recognition factor. This was a well educated crowd, and still the circle was very small as to what colleges were recognized.</p>
<p>The colleges want better calibers of students. It improves their own name recognition, which leads to big endowments and yes, even better rankings.</p>
<p>Few schools want to be considered too generous with aid for the neediest students, because they then become the place where everyone applies and wants to attend…even if they can’t afford it.</p>
<p>There are only a handful of schools that have big enough endowments to fully fund every student’s tuition if they wanted to - and they are generous with need-based aid, but don’t do merit aid. They don’t have to. People are selling kidneys (practically) so their kids can attend. </p>
<p>Everyone else has to pay attention to their financial bottom line - and that includes colleges.</p>
<p>Vossron, first of all, wealthy is a strong word for that category. I guess my family is wealthy by definition here since all financial aid guidelines say we need no aid. But that $10k can make a difference on where my kids go to school. A school offering $10K discount in addition to the Stafford monies, and my kid’s savings, earnings,all bringing down a $50K pricet tag is what we feel is the maximum that we can afford. My son immediately discarded his full pay acceptances that were in the $50K range. They were simply too expensive. Which left some OOS and instate publics, and those schools that offered at least $10K in merit money. A lot of families work that way. </p>
<p>I know many kids who like Fairfield and Fordham equally around here, and it is the amount of ''discount" or merit award that determines the final decision. $5K might not do it, but at the $10k level, it can clinch the deal. For instate schools $5K can be the dealmaker since with the Stafford money it is a 20% discount. Throw in a $1k local outside award, let the kid work this summer and save a couple grand, maybe another $1k in graduation money and another $1k in savings can make it just about doable for many of us.<br>
We had a $35k ceiling as to what we could afford as parents from our savings, loans and income. Which meant that our son had to come up with about $15K somehow. Without the merit award, it would not be doable at the top priced colleges and at his first choice school. Even then with travel costs, he is working during the school year for his spending money. The total COA is really over $50K, and he makes up that difference with his part time job. The grant he received this year is God send for him and for us since it makes his school very affordable along with that merit award. He will not have to take out loans, nor will we. </p>
<p>Many of us are in that category. We can’t ignore those $10K and even $5K awards. $20K on up will turn our heads for sure and when you get to the $30k on up, it may even buy a kid away from HPY or the ivies. I’ve personally seen it repeatedly. Many kids in my one son’s school who were accepted to BC and Holy Cross, regretfully turned them down because they did not qualify for financial aid and did not get any merit money, as both schools give out very little of it. Our tour guides at BC had turned down UPenn for one of BC’s big scholarships. Yes, it makes a big difference.</p>
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<p>10 students at $50k COA a year each is $500k. If you have $100k in aid to distribute, you are still collecting $400k from those 10 students, regardless of how you divide up the aid pot.</p>
<p>What Vossron is presuming is that by giving the $100K to two full need students,is that the 10 kids that would have been offered $10K apiece would still come at full freight since they have no financial need. In other words, he is putting zero value on the merit money as an enticement for these students to come. These would be desirable students to get the merit award, and these awards are usually given without regard to financial need. If students who happen to have financial need get the merit award, the financial aid portion of the award is reduced accordingly. Such students are likely to have a lot of other options at other schools since their parents are of some means since they demonstrate zero financial need, and because these kids are high caliber and desirable at other schools. These kids may well get acceptances to schools with more name recognition and higher up on the ratings scale as well as to honors programs at state universities. Without the merit money, there is a good chance this school is not going to get these students especially when other schools are offering merit money to them and these are peer schools. </p>
<p>The two kids being offered full financial aid, on the other hand, unless they have highly desirable attributes, which would then put them in the merit group, would have a tough time getting that $50K from other schools. For all the talk of the poorer students getting so much money that the middle class kids are not getting, the truth of the matter is that kids with high need have far fewer options. Few schools meet full need. Even fewer are need blind and meet full need. So giving the money out as need instead of as merit, you have a good chance of snagging those two kids, but you are out a full $100K and have nothing to offer that group of 10 kids that you really want since they are higher on the desirability scale than the full need kids.</p>
<p>Kids who are on the “A” list are the ones that tend to get full need or close to it met even at schools that are need aware and do not guarantee to meet full need. Between the merit and financial aid packages, they will get some school that will want them. It’s the kid who are not at that caliber and need full rides that are in trouble because they are not going to get into the schools that have the money to blindly accept and give their need, and those schools that do accept them may not have the money to meet their need without going into their merit money, then jeopardizing getting top applicants.</p>
<p>The reason merit awards are given is that they do work. They do get a higher yield on those kids that are offered that money. Kids do turn down schools higher on their list for merit money. </p>
<p>But full freight scholarships are not easy to get even when you have need. My friend’s daughter was waitlisted at both need aware schools that give 100% of need. She was accepted at two less selective schools, and they both gapped her. The package are loaded with the maximum Stafford and Perkins loans permissable, the full Pell grant and work study. One college gave her a small scholarship, the other a larger one, but both schools at $50k a year did not meet full need. The schools that were need blind and give full need rejected her. That leaves the state school which still leaves a gap, but a much smaller one. If she stayed home and commuted to a community college, she would have her need fully met. It would be difficult to commute to a four year state school because she would need a car to do so with all of the costs that go along with it, but she would be able to cover the tuition, and the school’s average(COA) commuting cost figure would also be given to her, but that is not enough to buy a reliable car that would have to go an hour each way nearly every day, including inclement weather, and the costs of insurance and upkeep. Even then she would need loans. </p>
<p>The problem is that even the full amount billed to full pay students does not cover the cost of business. So every student that you do not get that could have been a full pay really puts the school even further in the red. Very few schools have the funds to be need blind and guarantee to meet need. There are not many schools in this category, and such schools as a rule do not give merit awards, or if they do, they are truly limited. Getting merit money out of BC or Holy Cross, for instance, is tough. They only give a very limited number of merit awards to the students they most want. Some of them may well be financial aid kids. They are not excluded from that scholarship pool, you know. Other than Notre Dame and Georgetown, there are no other Catholic schools that I know that are need blind and meet 100% of need. All of the others have to select their students carefully, balancing need, the caliber of the student and merit to get as close to the best class they can assemble.</p>
<p>aglages wrote:</p>
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</p>
<p>Those are the $64,000 questions. An appropriate definition of “middle class” was discussed at length in a similar thread on the parents forum (<a href=“http://talk.collegeconfidential.com/parents-forum/934484-cost-college-out-control-what-you-suppose-we-do-about.html[/url]”>http://talk.collegeconfidential.com/parents-forum/934484-cost-college-out-control-what-you-suppose-we-do-about.html</a>) with no consensus of what “middle class” should mean.</p>
<p>Is “middle class” something close to “median family income”?</p>
<p>Apparently not for most CC posters, since according to the US Census the middle quintile of *family * incomes ranged from $49K to $75K in 2008 (<a href=“http://www.census.gov/hhes/www/income/histinc/f01AR.xls[/url]”>http://www.census.gov/hhes/www/income/histinc/f01AR.xls</a>) was roundly rejected as being way too strict. [Middle quintile means families whose income is between the 40th and 60th percentile.]</p>
<p>Many CC posters also thought extending the definition of “middle class” to include families with income at or below the 80th percentile, which in 2008 was about $113K, was still too strict since it eliminated most of the $100K-$150K families who can’t afford their FAFSA EFC and don’t think of themselves as upper income.</p>
<p>And many CC posters were sympathetic to extending the definition of “middle class” to include families making up to around $200K, which would place a family at the 95th percentile in 2008.</p>
<p>My own conclusion from the other thread, is that the working definition of most non-poor CC posters is “Middle class” means folks like me and the definition of middle class must include folks of my income level.</p>
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</p>
<p>Using the working CC definition of * middle class * as determined by the other thread, this discussion has been focused on how much the upper end of the CC-defined middle class has been closed out of need-based aid as defined by FAFSA EFC.</p>
<p>Working on the more modest idea that “middle income” might mean “close to median income”, I can give a data point that is based on my family’s annual income of $75K, little or no assets beyond the $150K house (with about $70K of equity): According to our FAFSA, such a family can expect an EFC of around $10K to $12K for one kid in college. Note that my family income is just about at the 60th percentile according to the 2008 census data.</p>
<p>So in most states, a student from a family similar to mine can expect a public state U to give them only Stafford loans in the need-based FA package. (But the Staffords should just about cover most of the difference between COA and EFC.) There won’t be any Pell grants in the package and there won’t be any institutional grants either. Depending on the state, there may be a small bit of state grant aid or additional state-subsidized loans.</p>
<p>As for those privates with $50K COA’s? If the college of choice is among the relatively few that meet full need, a student from a family like mine will likely get full amount of Staffords ($5500 for freshman year) and about $32K in need-based grant aid and federal workstudy. But the vast majority of those $50K+ schools won’t meet full need. How big of a gap can a family like mine expect? That’s completely unpredictable. Some places will leave large gaps and/or put large PLUS loans in the package and others won’t. Some places will create preferential FA packages so if an admitted student whose family has a similar income level to mine has stats that are among the best, he will have the smallest gaps and no PLUS loans, but a students admitted with more run-of-the-mill stats for the college’s admitted student pool will receive FA packages with larger gaps and some PLUS loans. For an admitted student with the poor stats compared to the rest of the pool, the FA package is likely to stink.</p>
<p>And if a student from a family like mine hits the jackpot and gets admitted to Harvard? The family would likely pay $7500 per year since $75K is above the limit for “Harvard for free”, but well within the limit of “Harvard for 10% of annual income.”</p>
<p>Well, if the privates priced themselves accordingly by value or “rank” then there would be no need for merit. HPY - $60K+ and on down to the Fairfield’s, Fordhams and Tulanes at $35K or something. I recall this was the way it was when my oldest was applying, 10 years ago. When they all decided they didn’t want to be much lower priced than anyone else was when all the problems started. So they jacked up their prices to all be $50K and now they have to give some kids merit to fill the class. But, they found they make more money (see above).
There is a school in my hometown which was a total commuter school several years ago, more of a Jr college. They threw up some dorms and now they charge $50K per year. The financial aid director spoke at my S’s school and said how many kids are graduating with over $100K in loans from this school. It’s just crazy.</p>
<p>Well said, RSS. I think you give a very accurate description of college pricing circa 2010, as well as the self-centric ‘definition’ of “middle class.”</p>
<p>I just might have to add a sig to my posts, after reading this thread:
“What is mine should stay mine, what is yours should be shared to be fair”</p>
<p>We don’t qualify for financial aid at nearly any school, but Harvard for 10% of pay would be a very nice merit award for us. And actually my last son who went through this process did get merit money from a number of schools where it would have been 10% of our annual income. Our state schools are a little under 10% of our income if our kids board, so we really have a many options. </p>
<p>But due to our choices and priorities, $50K a year is not doable for us. $35K is our limit, and our son did get some good choices at that price range.</p>
<p>
Excellent post RSS! I’m sure it’s not a surprise to the middle class that we are not currently receiving 'need based" aid, excluding guaranteed federal loans which everyone is eligible for and IMHO is stretching the definition of Financial Aid. Either way…the pool of money for guaranteed federal loans will not increase or decrease if all merit money is moved into the “need” pool.</p>
<p>So if the middle class is not receiving (or taking from the pool) “need based aid”, what are our children getting? If anything it is…merit based aid. And what do these clowns want to take away and add to the need based pool? Merit aid. Who will this help? I believe we have seen that answer repeatedly.
Not helping the middle class.
Classic. Ironically (IMHO) it is very close to a Toddlers Creed.</p>
<p>The “Toddler’s Creed” appeared in the syndicated weekly newspaper article “Families Today” by T. Berry Brazelton. </p>
<pre><code>If I want it, it’s mine.
If I give it to you and change my mind later, it’s mine.
If I can take it away from you, it’s mine.
If I had it a little while ago, it’s mine.
If it’s mine, it will never belong to anybody else, no matter what.
If we are building something together, all the pieces are mine.
If it looks just like mine, it is mine.
</code></pre>
<p>“Vossron, first of all, wealthy is a strong word for that category.”</p>
<p>When I say “wealthy” I mean only those who don’t need any aid. Not all who don’t need any aid are wealthy.</p>
<p>“What Vossron is presuming …”</p>
<p>I never presumed nor meant nor said nor thought anything like that. Not even close. :)</p>
<p>What I tried to say was that if there is no merit aid, or if merit aid is not given to the wealthy, then the wealthy will pay full freight if they want to attend the school, and the school will end up with more money to give to others.</p>
<p>“What I tried to say was that if there is no merit aid, or if merit aid is not given to the wealthy, then the wealthy will pay full freight if they want to attend the school, and the school will end up with more money to give to others.”</p>
<p>I think you might wrong about the wealthy paying $50,000 a year for a private college. Of course there will always be those who will pay no mater what, but many people I know who are well off are cautious about debt. I know a lot of people who encourage their kids to choose our state schools. Other kids I know who are going to private schools are going there because merit aid got them to a better price than our state flagship. State schools across the country may continue to get more selective as some of these top performing wealthy kids end up there. Maybe it’s just my friends who are this way, but I see less expensive state schools being a big trend this year.</p>
<p>In my argument, I am defining “wealthy” as those who would have no debt to be cautious about, not those “well off” who do watch debt load.</p>
<p>It goes back to where you draw the line in the definition of wealthy. From what I’ve read on this thread I would guess that the people I’m talking about are people you would expect to pay full price. I’m just saying that I think many would choose not to pay it and instead pick a less expensive alternative. Many of these kids are already planning to go to graduate school and the high prices over all those years influence their (and their parents’) choices.</p>
<p>“In my argument, I am defining “wealthy” as those who would have no debt to be cautious about, not those “well off” who do watch debt load.”</p>
<p>How about those who were cautious and frugal, in order to avoid debt ? Not only is your stance hypocritical, it also invokes moral hazard.</p>
<p>aglages says:</p>
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<p>Exceptionally large merit aid at many, many state U’s is very, very rare. For example, at the directional state U where I teach, our top merit award is worth $2500. (Our in-state tuition&fees are almost $6000 and r&b for resident students is another $9000.) There are only a smallish number (maybe 50 or 60?) of these awards for a freshman class of around 1500, and they require the student to maintain a 3.5 gpa. Almost all of these scholarships go to local suburban kids who come from families that are most likely making at least $60K to $80K a year. This $2500 is a nice perk, but it’s not a make-or-break chunk of cash to most of these students; and I don’t think it would be big enough to be the deciding factor for anybody with a CC-defined middle class income.</p>
<p>My first point is that the size of the merit based awards at most publics is so small that it’s misleading to believe that merit aid is * necessary * for a typical middle income family to afford most state’s in-state public universities. [There <em>are</em> exceptions, I know, but most state’s public universities remain affordable to most of the CC self-defined middle class posters.]</p>
<p>My second point is that if you are a middle class student whose family income is genuinely near the median of US family income [i.e. family income is between $50K and $75K], then there is no way you can afford any private even with a merit award of $20K unless you also receive substantial ** need-based aid ** that includes some institutional grant aid. And for families in the middle quintile of US family income wanting to afford a $50K+ private that does not meet 100% of financial need, merit aid with an extremely high gpa requirement is a double-edged sword: If the merit award requires a 3.5 and your kid earns a 3.3 and looses the scholarship, there’s no way that you can find the extra cash to cover the cost of the lost scholarship if the school decides to not cover it in need-based grant aid.</p>
<p>My third point is that if you are a middle class student at a $50K+ private and whose family income is genuinely near the median of US family income, then the issue of “merit” vs. “need-based” aid is much less important than “What’s the total aid? How hard is it to renew the merit scholarship? And what happens if the merit portion is lost due to grades?” * Moving institutional merit aid to institutional need-based grant aid means your middle class family does not have to worry as much about your kid losing the merit award, and for middle class families making $50K to $75K, that would be a GOOD thing!*</p>
<p>But I’ll agree that for families in the upper reaches of CC self-centric “middle class” whose incomes put them in between the 80th and 95th percentiles of US family income, changing all merit to need-based does seem like a bad idea since it is likely to hurt their finances.</p>
<p>“How about those who were cautious and frugal, in order to avoid debt ?”</p>
<p>I’m not talking about them, either. I want to keep scarce college money away from those who truly don’t need it, those whom we all can agree don’t need it. To me, wealthy means those who have so much money that they don’t need to work (and I don’t mean the retired).</p>
<p>
It would be a “good thing” if families making $50K to $75K actually received this need based grant. What makes you think this money would be applied to this group and not just added to the FA for the under $30K students?</p>
<p>I realize that “exceptionally large merit aid at many, many state U’s is very, very rare.” My point is that ANY need based aid for families making $60K+ is even rarer. Some merit aid is better than no need based aid even if it is only for one year and comes with a certain GPA attached.
Interesting opinion. The middle class doesn’t get need based aid and $2500 worth of merit aid ($2500 less in loans) has no value to us. We must be a very happy and content group. </p>
<p>If the “average” college student graduates with $20K in debt, how much debt do you think the average middle class family has when one of their children graduate?</p>