One consequence of this might be that the Local U becomes more prestigious. Or at least, less of a stigma.
I can't help but think that merit-based scholarships awarded by individual schools are a waste of resources. Leave that sort of thing to private scholarship funds, of which there are plenty.
I've never seen need-tested merit aid, which seems completely obvious to me. Excellent grades and test scores plus need should get you a free ride rather than a crushing debt load.
I pretty much think that school is a scam, though, so I'm the wrong person to ask.
Barring very specific disciplines, of course.
But $140K for a BFA? Practically immoral, if you ask me.
What's wrong with just need-based aid? Excellent grades and test scores are enough to get you in to school. Once you're in, just apply financial aid based on need.
(You may now all decry my Ivy League elitism.)
This is a good article that talks about merit aid as part of "enrollment management":
http://www.theatlantic.com/doc/200511/financial-aid-leveraging
4: There isn't enough of it. If 'need based aid' meant that you didn't have to worry about paying for college, that'd be fine, but as it is, it means, for a poor kid, something more like "If you work 30 hours a week and your parents help out all they can, you can graduate with a huge debt. Of course, your aid checks will arrive halfway through each semester rather than on time, so good luck using the library for the first part of every class." This wasn't me, but I saw enough people doing that dance. If that's all the money there is, it would be nice if excellence plus need could get you a comfortable, rather than a painful, trip through school.
One consequence of this might be that the Local U becomes more prestigious. Or at least, less of a stigma.
I was thinking of that, too. Merit aid surely helps perpetuate inequality between schools. I bet Local U would have a better chance of getting grants and funding if the high-achievers didn't all get cherry-picked by schools with larger endowments that could afford merit aid.
Wasn't Princeton going to be "free". Certainly Harvard and Yale have endowments large enough to not charge anything, if they so desired. But I'm with Joe in 3. Outside of the trade school aspect, what's the point?
4: I think (and this is based purely on my personal experience) that the cut-off for need based aid is awfully low. My parents are not grindingly poor, but they were financially struggling for most of my childhood and certainly when the three of us kids were in college. My mom worked two jobs to put us through school, and my dad basically never bought himself a new thing (ten-year old clothes, fifteen-year old car) until last year, after the littlest of us finished school. Between the three of us, we got into some very fine private colleges, but we did not qualify for enough need-based aid to make it possible for us to go. The upshot is we all went to public school (which was fine, because we were lucky enough to live in California), but even there, we relied on the UC system's merit-based aid program to make it financially feasible. Without merit based aid at the UCs? We (or, more honestly, my parents) might have been really screwed.
6,9: Fair enough. I made it through Brown with managable loans, because my parents were solidly middle-class and I had generous grandparents. Contra 6, though, I think it s getting better. Harvard is offering complete tuition to students from families making less than $60K, and Brown is now committed to completely meeting the need of its "poorest" students. It's probably those in the middle who get squeezed.
(Again, my perspective is narrow and Ivy League oriented.)
6 isn't quite right. The poor bright kid (talking parental income of mid-20K here) who gets into a school that can meet 100% of his demonstrated financial need will be just fine. He'll take out the maximum amount of subsidized loans -- no way getting around that -- about $16500 total assuming four years, and he'll probably have to have a job for book expenses (work study is capped at a number of hours per week), but the debt won't be soul crushing.
The problem is in the middlish cases. There's a point where the FAFSA form will say that you have a right to the $16500 in loans, another $2500 through work study, and then maybe an extra couple thousand in grants, based on the school and its resources. If you're the kid with parents who make decent money (national average or slightly higher), but not top money, they could be facing a $15000 tuition bill and your federally-calculated need has been completely met. That means you count as 'we meet 100% of students' need', but you'll still, if you choose to go there, either bankrupt your parents or end up $60K in debt.
I can't help but think that merit-based scholarships awarded by individual schools are a waste of resources. Leave that sort of thing to private scholarship funds, of which there are plenty.
Slightly biased. Merit aid, back in 1997 where a lot of places didn't meet everyone's need, saved my ass. No problems with private scholarship funds, except if that had been my only option, I never would have heard about it from my guidance counselor (or had a chance competing against more polished children.)
The information is 'out there', but I don't like the idea of throwing up another hurdle for a bright kid. Having it through the school is a really nice deal: they admit you, send you a letter, you send them your information, and you find out your options. Also, no worries about the aid checks arriving on time from an outside source, etc.
Not a direct response, but -- why have an arbitrary upper limit for tuition? It's already getting more and more income-based, as we're seeing, wherein they tot up ability-to-pay and work out loans/grants/etc. to make up the difference. Why not have the other end pay $60,000 per year if they can afford it?
Consistency in populism!
7 - I would think that merit-based aid only perpetuates differences between the wealthier mediocre schools and the poor mediocre schools. Most of the people I knew who took merit-based aid from high school were all going to much worse schools, since those were the ones who would pay big time. A kid from my dorm at high school went to Kansas U on the back of his 1600 and was being paid $5000 a year to attend. No good school has to do that to attract students.
If you're talking about state merit programs, I'd imagine they would only send better in-state students to the better in-state university, but is there really that big a tuition difference between state universities at the same state?
Most of the people I knew who took merit-based aid from high school were all going to much worse schools, since those were the ones who would pay big time.
The University of Oklahoma offered me a free four-year ride. The better schools I got into were often generous, but Oklahoma sounded so desperate. I hadn't even applied there.
Oh, man, I don't even remember the school, but I got some offer like that from a college in the south someplace that was just abject. A free ride, and special honors dorms so I wouldn't have to associate with the losers who paid to go there. I wanted to write to the school and explain that if you want a date, you have to play a little hard to get.
14 applies to me as well. Except that I only got into one better school, and went there, because it was generous.
14 applies to me as well. Except that I thought "awesome, no work for me", and went there, without ever applying anywhere else.
Not Oklahoma, though. In case that was unclear.
Also, to pile on to 4, it would indeed the perfect solution, if "need-based" aid more accurately mirrored real-world need. I may have mentioned this here before, but my parents laughed out loud when they saw how much the forms said they were "able" to contribute to my graduate education. It wasn't even in the realm of possibility. (In fact, had it been quite a bit lower, they might have felt pressured to stretch themselves and try and provide it for me, to "do their part" and not saddle me with extra debt. As it was, I think they were able to quite guiltlessly say "not happening.") My impression is that this is a reasonably common experience among the middle class, many of whom do in fact do financially stupid things to help pay for their children's college. (I'm giving middle-class its middle-america meaning, rather than its East Coast/NYC meaning, where it basically seems to mean the "working rich".)
I'll take this thing to 1,000 all by myself if I have to.
I sort of like 12 as an idea, but there has to be *some* upper limit. (We can't charge Bill Gates' kids a collective 35.5 billion dollars to attend college, even though he can clearly afford it and still end up better off than the vast majority of the population.) So what you really are proposing is making college dramatically more expensive -- raise tuition 4 or 5 fold -- and also dramatically increasing need-based aid. It seems that (1) no college can do this on its own, or all the rich people will just go somewhere else. Even among elite colleges, competition is constraining. But, (2) to some extent, this is exactly what's been happening over the past 50 or so years, as the cost of college education has grown at rates far exceeding the inflation rate. Early on, that growth in tuition rates *was* accompanied by expansions in aid. The trend continues, except that recently "aid" has more and more been coming in the the form of loans, which obviously aren't as attractive from the students' (and their families') perspectives. But the basic idea still holds.
19: True dat. My sister is still a bit miffed that she didn't get to go to a name school for pretty much that reason, and the financial strain on my parents after I dropped my ROTC scholarship was one of the reasons I left the name school I attended for a while. That's been a while, but my impression is that the situation has gotten worse, not better.
1/11- are private scholarships really out there in significant numbers? I remember being vaguely aware that such things existed, but not having any idea who/what/when/where/why/how, and feeling like there was some vast pot of free money that I had no idea how to access. To this day I'm not sure where a promising high school student would look to tap into that sort of thing. I remember running across a few very specific, narrowly targeted private scholarships, but none that ever applied to me, and none of the broad "bright students needing money apply here" sort. Which would make them a bad overall replacement for school aid. In other words, I'm not sure privatization of this market would work very well, except for a few lucky beneficiaries.
I got some offer like that from a college in the south someplace that was just abject.
Was it Southwest Missouri State? They gave a crazy scholarship and special dorms to all National Merit scholars. One of my buddies (then and now) went there--it sounded like he basically jerked off the whole time he was there and still managed to get into UVA for law school on the strength of his grades.
23: I had the same experience. I had decent grades from a good highschool, and ludicrous standardized test scores (like probably most people here, I react well to rows of little bubbles). I'd vaguely assumed that scholarships would be available on that basis, but everything I ever heard of was for the 'smartest kid in some very specific demographic category'. A friend (Jewlia Eisenberg, in fact) got a scholarship for being brilliant and a resident of a particular housing project; another would have gotten a free ride through the school of her choice from the New York Ukranian community, but had the poor grace to be admitted to Cooper Union, which is free to anyone who can get in. So they bought her a condo instead.
But private scholarship money for the merely clever seemed thin on the ground, or I didn't know where to apply for it.
So my impression from the above is: it would be great if there were need-based covering the need and merit-based to supplement for the real smarties, but in effect lots of people depend on merit-based to make it possible. But of course merit-based aid will benefit the needy more unreliably.
So perhaps to move closer to people's problems: what are the factors behind "ability-to-pay" assessment being so divergent from true situations? My parents filled out all the forms and whatnot, so I never got an idea of how it's calculated.
Obviously at the root there's never enough money to go around, so the systems presumably are adjusted in the direction of generating achievable-seeming estimates. But one wishes they were more accurate, even if depressing.
I knew of some people for whom the discrepancy was partly cultural: they were expected to send large amounts of their income back to relatives in other countries. This obviously wouldn't be accounted for.
24: It might have been. Missouri rings a bell, as was the initial "S" -- I was actually thinking "Southern Methodist U" and then thought "that can't be it."
25: That's pretty much what they told everyone at my high school, which was a hardcore public gifted school like yours. Parents would go around to colleges asking about merit aid at the college fairs, pointing out national math and science competitions where their kid had kicked ass, but there's just no pure merit-based scholarships to the top schools.
There were only three types of merit-based aid I ever heard of: the offers from low-level schools who throw money at anyone with halfway decent test scores, the incredibly narrow scholarships like you mentioned (one ex got a full ride at Temple because she was the most talented person who was also a decendant of an Irish Philidelphian veteran of WWII who had a certain level of award upon discharge), or the state-funded merit scholarships to the in-state schools. The last of those is probably the best of the three because at least it's a broad-based boon for smart kids in the right states.
Do partial merit scholarships even help? I thought it was the case that any aid reduced the amount of need, not the amount of parental obligation. And I think the same thing applies to any income (or some large percentage thereof) kids have during school - it reduces your calculated need. I also vaguely remember that various awards don't stack - you pick the best single one. which then reduces the college's obligation.
Again, that's my impression too. People I knew who were in tight financial straights often had some little merit scholarship, and I understood that it was no use whatsoever, it just meant less grant aid.
Do partial merit scholarships even help? I thought it was the case that any aid reduced the amount of need, not the amount of parental obligation.
It reduces the amount of need. So say tuition is $20K, and your need is $10K; school gives you a combination of grants and loans totaling $10K. If you then go and get a $5K scholarship, the school will reduce your aid by $5K.
There are allegedly hundreds of thousands of scholarship dollars out there, but most of them are in pretty specific categories and in small amounts. African-American baton twirlers from the Southeast interested in international relations, that kind of thing., or, what 28 said.
So perhaps to move closer to people's problems: what are the factors behind "ability-to-pay" assessment being so divergent from true situations? My parents filled out all the forms and whatnot, so I never got an idea of how it's calculated.
I forget the exact percentages, but it's something like they assume that 20% of your parents' assets will go towards your education, and a graduated percentage of the student's assets (basically sucks it all up by the time you leave.) They'll use the past year's tax return for determining income, sometimes the past three if you're self-employed and need to make a case that you have more need. Add the loans onto that, and that's what the student is expected to come up with if the school meets 100% of need.
Where it gets screwy is that the 20% (or whatever it is) doesn't budge much. If a family is recovering from a job loss, or a number of medical expenses, or other kinds of debt, it's very easy for the income, which one of the primary factors, to be more impressive on paper than it is practically. 20% if you've had a steady job for the past 18 years, carefully saving into a college fund is pricey but theoretically manageable. 20%, if your employment history has a number of holes, meaning drained savings & medical bills, but the year your kid goes off to school you land a great job, is practically unaffordable. Most families fall somewhere in between.
I can't think of an easy fix, but it doesn't work for a lot of people.
29- my parents made the *grievous* mistake (on the advice of a financial planning advisor, who honestly ought to be sued for malpractice) of putting all their savings for my college expenses into an account in my name (opened when I was maybe 4 or 5 years old, with them as the custodians). I think the planning purpose here was to avoid taxing the gains on the account at my parents' rates-- this was in the days before tax-advantaged education savings accounts, and in the days with higher marginal capital gains rates to boot. The effect of course was that when I went to apply for aid, all that money was considered "my" money, and therefore my contribution to my education, rather than my parents' contribution. The standard need-based formula assumes that parents can afford to contribute some fixed percentage of their income/assets to their children's education (based on number of kids, their income levels, other obligations, etc.), whereas the student himself can afford to contribute 100% of any accumulated assets towards financing his own education. So all my parents' contributions were wiped off the table immediately -- they were "mine", and so eligible for 100% contribution -- and then my parents were expected to pony up additional contributions based on their income/assets. I was honestly quite shocked at how utterly unsympathetic financial aid departments were at dealing with this in a rational, fair manner -- it was a quite obvious (and well-documented) case of relatively-poor-family-didn't-originally-understand-the-details-of-how-the-system-works, not any sort of elaborate scam to avoid paying our fair share of the costs. Yet the financial aid all people stuck to their positions, without showing any sort of compassion for a "but that *is* my parent's contribution" argument, or allowing me to "give the money back" to my parents (I had never even controlled the accounts -- they were just in my name) and recalculate everything on that basis, or anything else along those lines.
(To make clear exactly how absurd was this result, if I had instead taken all the money my parents had saved and bought myself a new car or blown it on hookers and beer or whatever, *and then* applied for aid, the amount of debt with which I'd have graduated would have been *identical* -- because the only difference would have been a greater 'demonstrated need', and the school would have made up the difference. It actually still makes me really angry just thinking about this, honestly. My parents worked damn hard for that money.)
And of course, assets aren't necessarily liquid assets. A family with a house but living paycheck to paycheck is going to be in trouble under a calculation like that.
30: In my situation, the merit scholarships were from the school and met the total need. In practice, they worked just like a fully-funded aid-baed program does now, but when I applied, the school didn't meet 100% of need (only 67% until my junior year), so the only people who did have their need met with grants rather than loans were on a merit scholarship. (Meaning had I done less well at the bubble-filling-out, I wouldn't have been given any money to go there.)
All things considered I'd rather have a better need-based program that met everyone's need.
32 semi-pwned, but the personal ancedotes stand.
33: If I recall correctly, they do exclude some things from the calculation of assets, and primary residence is in fact one of them.
You know what kills me? When my father went to CUNY in the 60's (one of the many fine tertiary institutions he dropped out of) it was free, or pretty close to it -- $50 a semester, maybe? Now, it really costs -- cheaper than a private college, but not cheap. Are we so much poorer now than we were then that we can't afford public universities that don't impose a financial burden on the people who go to them?
It's a good anecdote. Mine's fun, too. My dad's self-employed, and that means his income is very erratic. (He's not terribly good at being self-employed, unfortunately.) The years I was in college were quite lean: drained retirement accounts, no health insurance, the whole shebang. No family expected contribution to speak of really (I think I paid it.)
Now, my dad's business has picked up slightly. Two sisters are in school (the weird but good thing is that having two kids in college costs the same as one kid if the places meet 100% of need with grants. have twins. cluster thy births.), and it's a reasonable amount of money to pay. Pricey, but doable if everyone skimps.
Fast forward a few years later and one more sister. Now business is going great. Paying off 12 years of debt incurred by it not going great, but even the three-year tax profile is strong. Now, when we actually have money, we're looking at not being able to afford sending her to school. The incentives are completely backwards, as my parents would be better off if my dad's business had kept merrily failing.
The moral of this story is don't run your own business or get fired, ever.
38: It's scandalous the way this country spends on supporting the old and scrimps on educating the young. Social Security and Medicare are large chunks of the federal budget. Education is a local problem.
My own story features the inconvenient timing of my father's death, resulting in the paying out of his life insurance policy, which threw off all kinds of calculations. It worked out okayish, I guess, though I don't look forward to the reappearance of my student loans when I finish up with grad school.
32: My parents switched my college fund to their names a couple years before I applied to schools, on the advice of a financial planner who was apparently much more competent than Brock's parents'. It was a damn good thing they did.
I've wondered if the commonness of lots of student-loan debt doesn't have a bad psychological effect on savings behavior. Having years (a decade) at the beginning of your worklife where extra money goes to debt rather than savings, so you don't feel as if you have anything to show for it, seems as if it'd warp people's behavior.
43: Yeah, it's weird. I graduated law school with about $115K of debt. Now I work at a union-side labor firm. I have a hefty monthly loan payment, but my school helps me out, because I don't make that much money. My friends who work at non-profits and make, on paper, less money than me, actually have about as much spending cash, because their schools pay a larger chunk of their loans. My friends who work at corporate firms don't have all that much more spending cash than me, because their schools don't help them with their loans at all. Meanwhile, I save nothing. I know I'm doing something wrong.
Now I work at a union-side labor firm.
Dude, cool.
My buddies from undergrad who are now lawyers have bemoaned the fact that while, due to their lawyerly jobs, they all make more money than I, not only do their loans eat up all their extra cash, but they're required to dress professionally, own a car, and keep up appearances while I make no money, but my minimal loans are deferred and I can wear trackpants to teach in if I want.
My fantasy is to teach in the sort of track suits common on The Sopranos.
48 - This is exactly the problem with most high-flying jobs out of college. There's always something that snatches up the extra money, whether it's high rent in a more expensive town or expensive clothes and dry cleaning bills or the higher loan payments. Until at least 4 or 5 years into the career (if they make it that far), they're really no better off monetarily and just giving up all their free time. Someone should really explain this to more kids in their sophomore and junior years.
Yep. The really lousy thing (and it's not all that uncommon among lawyers) is someone who takes the horrible job, sticks it out for just long enough (or not quite long enough) to clear the debt, and then realizes how much she hates it and drops back to something that earns no more than she could have made before law school.
Boy, and I was starting to feel discontented about my interesting, fairly-well-paying post-bachelor's job there. Just move along now...
With regard to merit versus need-blind, there was some significant wackiness in the early 1990s. The Justice Department sued the Ivies, MIT, and a few other schools in an anti-trust action, because the schools got together to compare aid packages and avoid merit-scholarship bidding wars for top students.
Weirdly, the Ivies settled but MIT didn't, and they agreed not to collude in this manner. MIT continued to argue that they could do this, even though their colluders had all agreed to stop - the big argument involved whether the antitrust rules applied to the noncommercial, educational activites of the schools. Ultimately, it was ruled that schools can discuss general principles of determining need, and check up on retrospective data, but not compare individual awards, and only if they agree to be need-blind in admissions. It's all pretty weird.
54 - They referenced that case in a part of the article that I didn't excerpt. Some schools are trying to allow collusion for merit-based aid and are only deterred by the idea of a similar suit.
54 - I wonder who those people getting merit-based aid at those schools are. I knew a fair number of the kids who were placing in the top 20 or so in the nation consistantly in the national physics and math competitions, as well as a few Intel finalists and even couple guys who competed on the International Physics Olympiad team. None of them mentioned receiving any extra money on merit scholarships from schools like MIT, Harvard, Princeton, Stanford or Caltech.
I will admit, though, that nearly all these kids ended up attending one of those schools, so rumors of them getting "pumped-up" needs-based aid may have been true.
By comparison, in Canada there are national `merit' based scholarships for science and engineering, at least. At a level that helps in undergraduate, and can cover graduate costs (including cost of living) for 4 years, at least.
My parents couldn't have contributed much, but mostly due to these scholarships I came out of 10 years of uni (one undergraduate, two graduate degrees) ahead of the game, having managed to save a bit of money by living cheaply.
I can't see how it would work similarly in the US. For the tune of something like $200k total, this support mostly covered my education. That wouldn't even half cover the tuition at similar US schools for the same number of years, though. Perhaps something national in conjunction with tuition waivers given by the schools would work out the same way.
38: CUNY and other public schools are more expensive because state higher education budgets haven't increased fast enough. But I don't think that's the whole problem, or even most of it. CUNY probably offers degrees in lots of subjects that didn't even exist in the 60s: computer science, women's studies, neuroscience, and lots more. New programs cost money. Tenure-track professors' salaries have gone up. Professors' teaching loads are lighter than in the 60s, even at less prestigious schools; professors have more research time, but that costs money. Library books, journals, computers everywhere on campus, and people to manage them---all of it costs big money.
And that's just the academic programs. Add to academic expenses the increased expenses for student life: dormitories, support staff, counselors, campus activities. I wasn't around in the 60s, but I doubt that colleges then had anything close to the on-campus student support they have now. CUNY probably spends a lot more, and the private residential colleges spend tons.
I doubt though that students would beat down the doors of a Wal-Mart-esque cheapo four-year college, even if you could build one. Tim Burke wondered last year how much fat could be cut in a great post, "Could College Be Cheaper?"
None of them mentioned receiving any extra money on merit scholarships from schools like MIT, Harvard, Princeton, Stanford or Caltech.
Because, I imagine, these schools don't offer merit scholarships.