Before College: Games Colleges Play — Financial Aid Offers

The costs of attendance (“sticker prices”) colleges publish are not always what their students pay. In addition to federal and state awards, many schools offer their own gift aid (grants and scholarships) to discount tuition, fees, and even other expenses.

If an institution promises your prospective student a certain amount of institutional gift aid, analyze its offer carefully. It may be designed to “game” your student by discounting his initial sticker price, but then maximumize the tuition he pays in the future.

Here are some tactics to be on guard against:

Bait and SwitchIMG_1387

Institutional aid offers may be part of sleazy bait and switch strategies that even some reputable colleges employ. The most obvious of these is loss leader awards — first-year gift aid without renewal commitments for subsequent years. But they can be part of more subtle and sophisticated schemes, too. For more about the latter, see “Before College: Beware of Bait and Switch.

IMG_1388Wait and See

Be careful if an institutional representative suggests your student pay expensive and non-refundable enrollment deposits now, then hold on to find out if more grant or scholarship funding can be freed up for him later. Your student may or may not get additional gift aid — absent a written commitment, there’s no assurance of it — or the added aid may not match his needs or expectations.

Curbing Comparative Shopping

Thousands of postsecondary schools reportedly provide the Financial Aid Shopping Sheet with their financial aid offers. This document lays out sticker prices and financial aid awards in a common format, making it easy to do a side-by-side IMG_1389comparison of the net first-year prices your student will face at various colleges.

The Shopping Sheet also divulges the median amount borrowed by a college’s graduates, plus graduation and student loan default rates for its undergraduates — the last two being relative measures of institutional quality.

Unfortunately, the Shopping Sheet is voluntary. Some schools don’t provide it, making it difficult to measure them against their competitors. Before your student pays an expensive enrollment deposit to such a school, ask why it isn’t revealing it’s comparative data. In short — what is the school trying to hide?

Even colleges making honest and straightforward aid offers can be expensive. So help your student avoid falling prey to the games some schools play with aid offers so his higher education will be as affordable as possible.

College Affordability Solutions has 40 years experience with strategies that help make education beyond high school more affordable. For a no-charge consultation about such strategies, call (512) 366-5354 or email collegeafford@gmail.com.

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