Category: Financial Aid

Inside Higher Ed: “A study by economists at five universities, released this month by the National Bureau for Economic Research, suggests that consistently nudging incoming and current college students to submit the Free Application for Federal Student Aid (FAFSA) had no effect on college enrollment or financial aid recipient rates. Researchers tested a campaign on two distinct groups of students — high school seniors who applied to college using the Common Application and college students of all levels (incoming, applied but did not enroll, currently enrolled and dropouts) who applied within an undisclosed large state system.”

“Previous research has shown the success of nudging on a smaller scale from sources familiar to students, like advisers or local community organizations, Rosinger said. But for this study, the researchers tested whether nudging would be effective through state- and national-level organizations with broader reaches, like the Common Application, which is one possible reason the outreach didn’t garner results … Another possible explanation for the null results, the study argues, is that information about FAFSA submission is distributed more widely by other sources than in the past, and students don’t need the additional information or assistance these nudges attempted to provide.”

“Nudging efforts are particularly aimed to provide support that’s absent when disadvantaged students’ parents or high schools are not as involved in the college application process … but text message reminders are much less effective than sitting down with an adult to complete the FAFSA.”

CNBC: “Yes, annual tuition plus room and board at four-year, private universities is much higher — $48,510, on average — compared to public institutions — at just $21,370 — in the current academic year, according to the College Board. However, about two-thirds of all full-time students receive aid, which can bring the sticker price significantly down … The Princeton Review ranked colleges by how much financial aid is awarded and how satisfied students are with their packages. The report is based on data collected from fall 2018 through summer 2019.”

“The top schools for financial aid are all private and have sky-high sticker prices, yet their very generous aid packages make them surprisingly affordable.” The top 10 are: Bowdoin, Vanderbilt, Washington University in St. Louis, Princeton, Yale, Rice, Grinnell, Thomas Aquinas, Vassar, and Gettysburg.”

MarketWatch: “Grants and scholarships are the best ways to pay for college because you don’t have to repay them. But if you chose a college because it offered you the most free money, your final bill may end up bigger than you thought.” For example: “All of the scholarships listed on your financial-aid award letter may not be available to you next year … some schools award incoming freshmen a one-time scholarship for visiting the college’s campus or interviewing with the school … Other scholarships are renewable if you meet specific requirements. These may include maintaining a particular grade point average, choosing a certain major or following the school’s code of conduct. Review your scholarships to see which are renewable, and make sure you meet their terms.”

” Typically, schools aspire to maintain overall awards from year to year … But the types of financial aid within that award may change. For example, students have higher federal student loan limits after their first year in school. To account for this, a college could replace a grant with a loan of an equal amount for your sophomore year … Other changes to your financial circumstances could lead to you losing aid altogether. For example, say your older sibling graduates or moves out of your parents’ house while you are enrolled. The financial aid calculation now sees your family as having more available income, which increases the amount you’re expected to pay out of pocket.”

“Even if you receive the same amount of aid year after year, it may feel like less because your college’s costs increased. On average, tuition and fees have risen roughly 3% annually over the past 10 years, based on data from the College Board … Planning ahead is the best way to prevent these additional costs from catching you by surprise. To help predict future tuition and fee increases at your own school, look it up on the College Navigator website.”

Bloomberg: “An overwhelming majority of 11th and 12th graders (from 73% to 81%, depending on income group) were unaware that the government will pay their interest on existing loans while they are still in college, according to a new analysis of data by the ACT’s Center for Equity in Learning. From 67% to 70% didn’t know about a program that allows students to repay loans slower, based on how much money they make after college, the study found … The center outlines steps for improvement, including tailoring information for different student groups and improved outreach by college representatives.”

Equity in Learning: “The Center proposes the following ideas in its report … Where possible, a more nuanced view of high school students and their financial needs should be adopted … Colleges need to improve their outreach to the students who could use their assistance and advice the most; without it, students may not have the most up-to-date, personalized or accurate information to make college enrollment and student financial aid decisions.”

“Despite efforts to increase financial aid literacy, there remains an urgent need for more financial literacy–specific interventions. Further, debt-averse students may need additional information about the value of undertaking some (but not too much) debt, and the difference in types of debt.”

US News: “For students seeking federal financial aid to pay for college, the deadline to submit the Free Application for Federal Student Aid, or FAFSA, is on June 30 each year. But to maximize their chances of getting aid, every prospective and current college student would ideally promptly submit the FAFSA shortly after the application opens on Oct. 1 of the school year before the aid will be used … This means that rising high school seniors who plan to begin college in 2020 should prepare to fill out the FAFSA starting this October … To be eligible for federal financial aid like work-study, student loans and the Pell Grant, as well as a range of other college and state need-based aid, students must submit the FAFSA.”

“In addition to keeping the federal deadline in mind, they must juggle multiple independent FAFSA deadlines unique to their college and state. The difference between filing early, on time and late can amount to thousands of dollars in funding to pay for college.”

“The U.S. Department of Education publishes a list of state deadlines for the FAFSA annually, and Shank says students should also check their college’s website to find deadlines for specific grants and scholarships, or contact their financial aid office if the submission deadline isn’t clearly stated.” The priority deadline for Connecticut is midnight, February 15th.

Of all the most frequently asked questions about college admissions, financial aid probably comes up most often. Inquiries typically start with the basics, such as “what is the difference between merit and need-based aid?” The quick answer is that merit aid, or scholarships, are dollars donated by people who are either very wealthy or very dead and are designed to entice students from the top tier of the applicant pool, regardless of financial need. Need-based aid generally refers to the government grants and loans allocated through FAFSA, as well as other sources, that are determined by the student’s ability to pay.

Financial-aid questions quickly escalate to murkier turf where definitive answers are scarce. One question we hear on almost a daily basis is whether applying early decision effectively closes the door on getting any merit aid. The answer would seem obvious, since why would a school throw money at a student who is legally bound to attend, scholarship or not? However, the real answer depends on which school you ask. We heard an unexpected perspective at a roundtable discussion among four vice presidents of enrollment during the recent IECA conference in Chicago.

Without naming names, some schools say that, contrary to popular belief, early-decision students are indeed sometimes awarded scholarships. The reasoning is that if a school were to gain a reputation for denying early-decision students merit aid, it would depress the number of quality applicants and the school would miss out on some really great kids. This does make some sense, although a healthy dose of skepticism is also understandable. It’s not so much that these schools are making false claims as it is that the policy almost certainly varies from school to school. So, if merit aid is a consideration, it would be worth researching a school’s position on merit aid before submitting an early-decision application.

A somewhat related question is whether students who are not declaring an intention to apply for need-based financial aid are unlikely to be awarded merit scholarships. Why give money to students who don’t need it? Once again, the intuitive answer may not be correct. One of the enrollment VPs said that providing scholarships to wealthy students actually makes more need-based money available to those less well-off.

Part of the reason is that tuition increases each year, but the scholarship award does not, and overall revenues rise accordingly. So, in a way, these students help support revenue growth. In addition, similar to the early-decision scenario, schools may view the potential scholarship as an incentive to apply even to students who don’t need the money. After all, scholarships are an honor, and not necessarily just about the money. Awarding merit aid makes a student feel wanted, which is a big deal. Once again, some schools are also wary of doing anything that might discourage high-quality applicants.

All of this is to say that navigating the financial aspects of a college application is complicated, and it is best to research, ask questions, and never assume anything. That much you can take to the bank.