What is your experience with private college financial aid?
December 19, 2022 2:38 PM Subscribe
My daughter is in her college application process. She received a large tuition waiver (based on need) from a private liberal arts college for her first year that actually makes it more affordable than state school. But just for the first year - how likely is this to continue for all four years?
My daughter got accepted to a very expensive school (not hyper elite) and they knocked like 80 percent off tuition so cost for year 1 would be 15K - where we live, the state schools are about 25K annually (which is about what we are comfortable with as a family.)
But, this offer is just for year 1. When she asked the admissions folks about this, they said "as long as your financial situation stays the same you should get about the same amount."
But, two things concern me about this. First, her financial situation won't stay exactly the same - I (primary parent) am about to start a new job making about 35K annual salary higher than I did this FAFSA/CSS year. Second, I have heard rumors that this is what private schools do: give a big tuition waiver to get you there, and bank on you not transferring when the cost is higher in subsequent years, and wondering if their "should" was strategically placed.
So, what do you think is likely to happen in Year 2 and what do I need to know to figure it out? Does it make more sense to stick to the known cost of state school and not gamble, or should we feel comfortable that the annual cost won't go up drastically? (If it matters this is obviously early action, so there are likely to be a few more acceptances to compare this to down the road.)
My daughter got accepted to a very expensive school (not hyper elite) and they knocked like 80 percent off tuition so cost for year 1 would be 15K - where we live, the state schools are about 25K annually (which is about what we are comfortable with as a family.)
But, this offer is just for year 1. When she asked the admissions folks about this, they said "as long as your financial situation stays the same you should get about the same amount."
But, two things concern me about this. First, her financial situation won't stay exactly the same - I (primary parent) am about to start a new job making about 35K annual salary higher than I did this FAFSA/CSS year. Second, I have heard rumors that this is what private schools do: give a big tuition waiver to get you there, and bank on you not transferring when the cost is higher in subsequent years, and wondering if their "should" was strategically placed.
So, what do you think is likely to happen in Year 2 and what do I need to know to figure it out? Does it make more sense to stick to the known cost of state school and not gamble, or should we feel comfortable that the annual cost won't go up drastically? (If it matters this is obviously early action, so there are likely to be a few more acceptances to compare this to down the road.)
My experience, and, as far as I know, those of my friends and acquaintances, match what the college financial aid office is telling you.
posted by kickingtheground at 2:49 PM on December 19, 2022 [1 favorite]
posted by kickingtheground at 2:49 PM on December 19, 2022 [1 favorite]
My kid is a sophomore at a private college with a similar scenario to what you describe. Year 2's aid was basically the same as year 1 -- tuition went up a hair, aid went up a hair.
I am a person who went to an enormous in-state public university, and I'll say that dealing with the financial aid folks at this small college is about a million times easier than what I went through back in the day. They are responsive and communicative.
Does this school publish a cost calcuator on their website? If yes, you could try plugging in your new salary to see how that might change the aid package.
posted by BlahLaLa at 3:14 PM on December 19, 2022 [1 favorite]
I am a person who went to an enormous in-state public university, and I'll say that dealing with the financial aid folks at this small college is about a million times easier than what I went through back in the day. They are responsive and communicative.
Does this school publish a cost calcuator on their website? If yes, you could try plugging in your new salary to see how that might change the aid package.
posted by BlahLaLa at 3:14 PM on December 19, 2022 [1 favorite]
It's going to depend somewhat on the *school's* financial situation, too. How's their endowment look? Especially because "hyper elite" private schools tend to have notably sturdier endowment situations than non-elite ones, which makes for higher capability of providing significant financial aid packages.
For example, look at the recent financial troubles of Hampshire College. Their 2019 endowment of $52 million for their annual less-than-1000 student enrollment is commonly seen as worryingly low, and Hampshire nearly closed over it; it's only by the strength of a fundraising campaign led by Ken Burns that they've come back from the brink, and even then their endowment is only $54.5 million for FY22. By contrast, their hyper-elite neighbor up the road, Amherst College, has an endowment of $3.775 *billion* as of July 2021, for just under 2000 students. Smith College, also a neighbor, $2.6 billion as of July 2021 for about 2200 students. Mt. Holyoke, also just down the road, $789 million as of 2020, also for about 2200 students. All of these endowment numbers need to be high enough that each college is able to fund its expenses for the forthcoming year off of the interest the endowments earn. And the WaPo article in my first link notes that this is going to be a problem ongoing - there's specifically somewhat of a financial cliff in 2026 based on youth population decrease. I am not a college finance expert, but I would expect that could potentially affect your daughter's presumed senior year.
What's the number (both absolute and per-student) for the private school your daughter is considering attending?
posted by Pandora Kouti at 3:26 PM on December 19, 2022 [5 favorites]
For example, look at the recent financial troubles of Hampshire College. Their 2019 endowment of $52 million for their annual less-than-1000 student enrollment is commonly seen as worryingly low, and Hampshire nearly closed over it; it's only by the strength of a fundraising campaign led by Ken Burns that they've come back from the brink, and even then their endowment is only $54.5 million for FY22. By contrast, their hyper-elite neighbor up the road, Amherst College, has an endowment of $3.775 *billion* as of July 2021, for just under 2000 students. Smith College, also a neighbor, $2.6 billion as of July 2021 for about 2200 students. Mt. Holyoke, also just down the road, $789 million as of 2020, also for about 2200 students. All of these endowment numbers need to be high enough that each college is able to fund its expenses for the forthcoming year off of the interest the endowments earn. And the WaPo article in my first link notes that this is going to be a problem ongoing - there's specifically somewhat of a financial cliff in 2026 based on youth population decrease. I am not a college finance expert, but I would expect that could potentially affect your daughter's presumed senior year.
What's the number (both absolute and per-student) for the private school your daughter is considering attending?
posted by Pandora Kouti at 3:26 PM on December 19, 2022 [5 favorites]
Best answer: My experience at a small non hyper-elite private school was just like what the fin aid department is telling you. My family's income did vary during my 4 years there but I recieved need-based aid my entire time in varied amounts. It's unlikely they're out to screw you - yes, aid changes based on each year's FAFSA but in consistent math-formula ways, not "oh good now that she's a sophomore we can stop pretending hahaha" evil villain.
posted by augustimagination at 3:34 PM on December 19, 2022 [6 favorites]
posted by augustimagination at 3:34 PM on December 19, 2022 [6 favorites]
Two real concerns:
1) A change in income will decrease the need assessed by FAFSA. The offer of aid is based on the need assessed by FAFSA, so there is a possibiltity that the offer will decrease as income goes up.
2) Even if the need assessed by FAFSA stays the same, the make up of the offer can change. So, loans/workstudy in place of some of the direct tuition assistance.
However, the basic aid package is tied to FAFSA, and the FA office is not lying to you when they say that calculation process does not change after year 1.
If this were an elite institution, even the first two concerns would not be an issue. Elite institutions are very concerned about their completion rate/reputation and will work very hard to make sure no one drops out because of financial need.
posted by hworth at 3:45 PM on December 19, 2022 [3 favorites]
1) A change in income will decrease the need assessed by FAFSA. The offer of aid is based on the need assessed by FAFSA, so there is a possibiltity that the offer will decrease as income goes up.
2) Even if the need assessed by FAFSA stays the same, the make up of the offer can change. So, loans/workstudy in place of some of the direct tuition assistance.
However, the basic aid package is tied to FAFSA, and the FA office is not lying to you when they say that calculation process does not change after year 1.
If this were an elite institution, even the first two concerns would not be an issue. Elite institutions are very concerned about their completion rate/reputation and will work very hard to make sure no one drops out because of financial need.
posted by hworth at 3:45 PM on December 19, 2022 [3 favorites]
You can probably expect at least a small chunk of that extra $35k to go towards college costs, but that's probably not unreasonable. It's a good idea to try the net price calculator to see what impact it would make.
It's also perfectly possible that the state school tuition could increase substantially over the 4 years, depending state budgets etc. If you don't qualify for any aid there now, you're not all that likely to get any if they do increase.
posted by plonkee at 4:10 PM on December 19, 2022
It's also perfectly possible that the state school tuition could increase substantially over the 4 years, depending state budgets etc. If you don't qualify for any aid there now, you're not all that likely to get any if they do increase.
posted by plonkee at 4:10 PM on December 19, 2022
I attended one such school and have worked at another. These schools are very interested in maintaining their reputations, including in competition with each other. It would not be in their best interests to hook students with one cheap year and then reduce their aid.
Law schools, on the other hand, totally do that, but they do it by issuing merit-based scholarships that not everyone can keep when grading is curved.
posted by Comet Bug at 4:34 PM on December 19, 2022 [3 favorites]
Law schools, on the other hand, totally do that, but they do it by issuing merit-based scholarships that not everyone can keep when grading is curved.
posted by Comet Bug at 4:34 PM on December 19, 2022 [3 favorites]
Graduation rate is an important stat, so colleges are not incentivized to do a bait and switch with aid that would result in students not finishing or having to leave after a year.
posted by snofoam at 4:58 PM on December 19, 2022 [1 favorite]
posted by snofoam at 4:58 PM on December 19, 2022 [1 favorite]
Over ten years ago at this point, but my (substantial) need based aid for an expensive private, not elite, college remained more or less the same for all four years.
posted by geegollygosh at 5:21 PM on December 19, 2022
posted by geegollygosh at 5:21 PM on December 19, 2022
Nthing this. My son went to an elite, small private college which, with his financial aid, came to about the same cost as a state school for each/all of the 4 years. The number of admitted freshmen who end up graduating from this school is about 96%. So yeah, what others said about retention motivation.
I want to say also that don't hesitate to speak to a financial aid counselor at the school about your concerns. They might give you some idea.
posted by DMelanogaster at 5:31 PM on December 19, 2022 [1 favorite]
I want to say also that don't hesitate to speak to a financial aid counselor at the school about your concerns. They might give you some idea.
posted by DMelanogaster at 5:31 PM on December 19, 2022 [1 favorite]
Best answer: Check out the school's net price calculator with next year's expected income. Also know that the relevant tax info for FAFSA and CSS profile is the prior prior year, so the impact on financial aid won't be felt for awhile yet.
Colleges (especially private, not very selective ones) practice tuition discounting. Colleges will give families a discount based on need and/or how much the school wants the students.
So it is not in a college's best interest to "bait and switch," because the rankings penalize low retention rates. Do a web search for "college name" + "Common Data Set" to see how the school allocates financial aid and its retention rates. Also compare retention rates among peer universities... If retention rates are much lower than its peers, then that might be a sign of "bait and switch" financial aid or some other sign of student unhappiness.
Also keep in mind that tuition and fees are almost certainly going to increase each successive year at any school. (Room and board costs may decrease in future years as students move off campus and off meal plans. However, sometimes the housing market surrounding the local university is really tight...)
posted by oceano at 6:03 PM on December 19, 2022 [4 favorites]
Colleges (especially private, not very selective ones) practice tuition discounting. Colleges will give families a discount based on need and/or how much the school wants the students.
So it is not in a college's best interest to "bait and switch," because the rankings penalize low retention rates. Do a web search for "college name" + "Common Data Set" to see how the school allocates financial aid and its retention rates. Also compare retention rates among peer universities... If retention rates are much lower than its peers, then that might be a sign of "bait and switch" financial aid or some other sign of student unhappiness.
Also keep in mind that tuition and fees are almost certainly going to increase each successive year at any school. (Room and board costs may decrease in future years as students move off campus and off meal plans. However, sometimes the housing market surrounding the local university is really tight...)
posted by oceano at 6:03 PM on December 19, 2022 [4 favorites]
Best answer: I work in higher ed and Retention is KING.
That said, call the FA office and ask to speak with a counselor about your concerns. You have a valid question, though it may not be one they can give a cast iron answer to.
posted by wenestvedt at 8:21 PM on December 19, 2022
That said, call the FA office and ask to speak with a counselor about your concerns. You have a valid question, though it may not be one they can give a cast iron answer to.
posted by wenestvedt at 8:21 PM on December 19, 2022
Just for clarification, the 25k you're comfortable with is just tuition and you can want yo spend above that for dorms/off-campus housing, food, books, incidentals, etc. Are those costs comparable?
posted by brookeb at 10:44 PM on December 19, 2022
posted by brookeb at 10:44 PM on December 19, 2022
Best answer: I'll add that your salary from your new job won't be evaluated by the financial aid office for two years, because you report income from the "prior prior year" on the FAFSA/CSS profile. Any money you make after the kid's sophomore year won't be looked at (as long as they graduate in four years). Generally schools don't raise tuition by exorbitant amounts because they don't want to lose students, but an increase in income will likely raise tuition. Not being able to afford tuition is the most common reason for a student transferring college, but that's not always a bad thing, either. You can get a lot from two years at a private college (including an Associate's Degree) that will serve your student well in the long run. The additional attention and interaction with their professors will help them develop good habits that they can take with them anywhere.
posted by stinker at 12:01 AM on December 20, 2022 [2 favorites]
posted by stinker at 12:01 AM on December 20, 2022 [2 favorites]
By the way, financial aid is potentially negotiable… you can ask colleges if they will meet another institution’s financial aid offer. (This is more likely to be successful among peer institutions).
posted by oceano at 6:41 AM on December 21, 2022
posted by oceano at 6:41 AM on December 21, 2022
Best answer: +1 on looking at the endowment. There are a lot of non-elite liberal arts schools that went into the COVID pandemic in fairly weak financial condition, got hammered by enrollment declines (particularly of foreign students) and are now in a very tough position. Desperate schools may be looking more at getting your $15,000 than at foregoing the other 80% of the cost of attendance.
That said, if the endowment is healthy, this is a gift horse you don't have to do a lot more looking in the mouth. Well-endowed private schools have increased financial aid for upper middle class families dramatically over the past few years. The best-endowed school literally charge no tuition and discount or even waive room and board charges all together for kids whose families earn under $200k a year, and moderately endowed schools aren't too far behind.
By contrast, public schools still limit significant grant aid to poor families, while middle class families get a mix of family contribution, loans, and work-study.
It is now the rule, not the exception, that a strong student from a middle class family should be able to attend a private school much less expensively than an in-state public school, to say the least of an out-of-state public school.
posted by MattD at 7:00 AM on December 21, 2022 [1 favorite]
That said, if the endowment is healthy, this is a gift horse you don't have to do a lot more looking in the mouth. Well-endowed private schools have increased financial aid for upper middle class families dramatically over the past few years. The best-endowed school literally charge no tuition and discount or even waive room and board charges all together for kids whose families earn under $200k a year, and moderately endowed schools aren't too far behind.
By contrast, public schools still limit significant grant aid to poor families, while middle class families get a mix of family contribution, loans, and work-study.
It is now the rule, not the exception, that a strong student from a middle class family should be able to attend a private school much less expensively than an in-state public school, to say the least of an out-of-state public school.
posted by MattD at 7:00 AM on December 21, 2022 [1 favorite]
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posted by RajahKing at 2:46 PM on December 19, 2022