Posted on Apr 11, 2002
Let the bidding begin.
Recent steps by the country's elite colleges will reduce the financial tug-of-war over top students. Last summer, 28 schools — including Duke University, Cornell and the University of Pennsylvania — decided on common rules for allocating financial aid in an effort to reduce variation from college to college. The solution: a “consensus” approach for valuing family need. For example, some colleges heavily penalized families that had savings in the student's name. Now those savings will be treated the same as any other family assets.
The result of the common approach, the colleges say, will be more financial aid for those students who really need it. But experts say the net effect is it may be tougher for more affluent students to negotiate aid at colleges that can cost as much as $36,000 a year. The effect will be to “reduce the student's ability to play one off against the other,” says Sandy Baum, a professor of economics at Skidmore College and an expert on college financial aid.
But because the new approach doesn't affect students entering college this fall, more affluent parents can take advantage of one last season of serious horse-trading. (It starts with kids graduating from high school next year.) And this year's haggling has already begun. “The phone is ringing all day long,” says Jim Belvin, director of financial aid at Duke University, Durham, N.C.
Some $74 billion in financial aid was distributed nationally in the last school year, roughly $6,600 per full-time student, according to the College Board. The bulk of that money — some $42.8 billion — came in the form of loans.
The practice of discounting tuition to attract top students dates back to the 1970s in the Midwest. It moved East about 10 years ago and made its way into the elite schools in the past five years. Today, says Dan Lundquist, vice president of admissions and financial aid at Union College, Schenectedy, N.Y., “nobody is immune.” He notes that even Ivy League colleges invite accepted students to submit competing financial offers for review.
For parents looking to negotiate, the first rule of financial aid is that it never hurts to ask. Start by collecting better aid offers from competing schools, then document factors such as declining family income, a recently lost job, or increasing medical expenses that don't always show up on the financial forms.
A face-to-face meeting with the financial-aid director never hurts. “Sometimes they see you there and they will even throw a thousand or two at you just to get you out of the office,” says Marie Ruggiero, financial-aid adviser at Mamaroneck High School in Mamaroneck, N.Y.
Parents often have more success at second-tier schools, which are seeking to upgrade their reputation by attracting top students.
Mr. Lundquist of Union College says his school will sometimes boost grants to snare students with bigger aid packages from a number of more prestigious institutions. “If someone can go to Williams cheaper, they are going to,” he says.
Some schools openly use merit scholarships to attract desirable students. The University of Denver, for example, offered Stephanie Miller a $10,000 merit scholarship, even though she never even applied for aid. The Beaverton, Ore., senior is an accomplished ski racer and tennis player who boasts a 3.8 grade point average. Now her mother is talking with other schools that accepted her daughter to see if they will match the offer.
HOW MUCH AID CAN YOU EXPECT? |
|
Colleges vary greatly when it comes to doling out financial aid. Parents will often have the most success negotiating for additional dollars at second-tier colleges that are eager to boost the caliber of their student profile.
Carnegie Mellon |
Invites students to submit better aid offers. Tries to respond in 48 hours. |
Duke University |
Provides aid based on need, but will re-evalute any new financial information submitted. |
Emory University |
Merit aid awarded through admissions office. Doesn't consider higher merit offers but will look at new financial data for need-based awards. |
MIT |
Need-based aid only. Guarantees to meet full need of all admitted. Will look at new financial data. Average grant this year is $20,000. |
Union College |
Sometimes will boost aid to snare students with bigger packages from more prestigious schools. |
Source: WSJ research |
Take It or Leave It
Other schools are less inclined to negotiate. Josh Lynn, now a junior at Emory University in Atlanta, got nowhere when he tried to parley full-tuition merit scholarships from both Emory University and Brandeis University into aid dollars at other schools. Both schools — Dartmouth University in Hanover, N.H., and Tufts University in Medford, Mass. — politely declined.
“”We were told it's all based on need,” says Josh's mom, Ruth Lynn. Understanding a school's aid policy is important. Carnegie Mellon University in Pittsburgh, for example, gives admitted students a form where they can list better aid offers from competing schools. Carnegie Mellon will usually notify students within 48 hours of its decision, says Michael Steidel, director of admissions.
Last year, 673 students admitted to Carnegie Mellon submitted competing offers; the school ended up offering additional aid to 314 of them. The average package increase of about $4,000 was enough to get 171 to enroll. But Carnegie Mellon sees itself in competition only with private schools. It won't match offers from state schools.
Extenuating Circumstances
Of course, even schools that don't match a merit offer will increase aid packages for students whose circumstances have changed. For example, if a parent has lost a job, colleges will often increase their child's aid award. “We are more than happy to look at any extenuating circumstances,” says Duke's Mr. Belvin.
Moreover, colleges can be creative about interpreting financial data when they really want to attract a student, according to Kalman Chany, a New York financial-aid adviser and author of “Paying for College Without Going Broke.” “Determination of need can be very subjective.”
The Massachusetts Institute of Technology says it doesn't match merit offers. However, it will take another look if another school's need-based offer is higher.
“We will certainly pay attention,” says Betsy Hicks, director of financial aid at Massachusetts Institute of Technology, Cambridge, particularly if the offer is from a school that uses a similar method to calculate its aid.
Read More