Preferential packaging – college financial aid as a recruiting tool

Preferential packaging of financial aid is commonly used by private colleges and universities.  Because schools are not transparent about this strategy, many families are ignorant of how it works.  Muhlenberg College is unusually open about explaining this practice.

Preferential packaging means, simply, that the students a college would most like to enroll will receive the most advantageous financial aid packages.

There are three basic types of financial aid (FA):  grants, loans, and work.

A preferential financial aid package includes a far greater percentage of grant aid than self-help (loans and work). Because they have discretion over how much grant aid they choose to award a student, a college can award a bigger grant to a student they would really like to enroll….

Willamette University also is exceptionally forthright about its preferential packaging.

For students with demonstrated financial need, the percentage of need that is met with “gift-aid” (scholarships and grants from all sources) will also reflect the students’ academic standing within our admitted applicant pool. In other words, the stronger the student, the greater the scholarship award is likely to be.

Let’s look at an example from a CollegeConfidential post.

In this case the college’s Cost of Attendance (COA) is $40,000, and two applicants have the same financial need but quite different academic credentials.

Student A ACT 33 GPA 4.0 EFC = $7k

Student B ACT 24 GPA 3.2 EFC = $7k

Student A is more attractive to the college because his stats would improve the school’s stats.  Perhaps Student A is also an Underrepresented Minority (URM), another desirable factor.  Both students will be offered $10,000 in FA, but Student A will receive a preferential package that does not include a loan.

Financial Aid Offered
Student A:  $8,000 grant; $2,000 work-study – Total = $10,000
Student B:  $3,000 grant; $5,000 loan; $2,000 work-study - Total = $10,000

Note that these awards are technically “need-based”, but in fact do take merit into consideration.  If it is the official policy of this college only to offer FA based on need and not on merit, another student with the highest of academic credentials but lacking any financial need (EFC = COA) would receive nothing.

What it means to applicants

• Students seeking to maximize financial aid should apply to schools where their statistics place them in the upper third of the applicant pool.
• Students with no financial need are shut out of many merit awards that include a need component.

Related:

• Psst – one of Duke’s so-called merit scholarships is actually need-based (Cost of College)
• Family income matters for ‘merit’ awards at the University of Rochester (Cost of College)

A special day to remind us about the benefits of 529 plans

Darn! I missed 529 day.

The College Savings Plans Network sponsored National 529 College Savings Day this past Wednesday, 5/29/13.  Many states sponsored promotions for their 529 plans, with some offering special incentives that are still in effect.

Florida, for instance, is waiving the $50 enrollment fee for plans opened from May 20 through June 30.

You can check out individual states’ events and promotions by clicking on this map.

…

In general, 529 plans are college savings and investment accounts sponsored by state governments. Money deposited in the accounts grows tax free, as long as the funds are used for educational purposes when withdrawn. You don’t have to be a resident of a particular state to use its plan, although some states offer additional tax benefits to in-state plan participants.

Most 529s are designed as traditional savings-and-investment vehicles, but some states offer prepaid 529 plans, which allow savers to pay tuition at certain schools in advance at current rates.

Related:  What you may not know about 529 plans (Cost of College)

 

The challenge of paying for college and saving for retirement at the same time

Especially for parents who had their children when they were in their 30s or later, the crunch of paying for college while trying to save for retirement can be tough to manage.  The Family CEO gives advice for families who find themselves in this situation.

Reduce other expenses to free up cash for these goals.

… It might be something big, like driving a car with high payments. Or something small, like have premium cable channels that you never watch. Big or small, eliminating some of these expenses and directing them to retirement or college savings can help you meet those goals.

I have neighbors who put their kids through college debt-free using this strategy.  Exercising great discipline, they gave up one of their cars, fancy vacations, most clothing purchases, and housecleaning services during the six years they were paying college tuition.  It’s certainly not easy, but it can be done.

Create new streams of income or boost the ones you have.

In some cases this is quite feasible – consultants can take on extra clients, teachers can tutor on the side, SAHMs can go back to paid employment.  But sometimes it’s hard to find new money, and even then the amounts are meager.  The whole family can get in the act; maybe a teen can earn spending money from a summer job.

If you need to choose one, choose retirement.

… there are multiple ways to pay for college, but no one is going to fund your retirement for you.

Since time is not on their side, older parents in particular should avoid skimping on their retirement savings.  It can be a hard decision for parents to put their needs above those of their children, but here’s one way to think about it.

It’s like putting on your oxygen mask first on an airplane. Make sure you’re taking care of yourself, so you can in turn take care of them.

Related:

• Paying student loans in your 20s, 30s, and beyond interferes with saving for retirement (Cost of College)
• Your retirement savings are not included in determining EFC (Cost of College)

High school writing instruction should be less creative and more ‘formulaic’

“Academic writing is formulaic“, according to one SAT tutor who has written a number of books on the topic.  It would seem to follow that creative writing should not be an important focus of high school curriculum.  Students should master the “formula” before they spend too much time on poetry, journaling, or similar exercises in creative writing.

… one of the things I try to get kids away from in terms of their academic writing is the idea that everything they write has to be wildly new and creative. Academic writing is formulaic. It just is. Clarity trumps pretty much everything. You can be creative when you’ve mastered all the rules, but until they, you need to pay attention to what people with more experience do and learn from them. (I think part of the problem is all the hysteria over plagiarism: of COURSE kids shouldn’t be stealing other people’s work, but they also need models! How else are they supposed to learn to write?) When they try to be creative, they write jumbled sentences and the like — it’s just a disaster.

When it comes to writing, most students need to learn the rules before they can break the rules.

Students are not being taught academic writing in high school.

In his “third column on the teaching of writing in colleges and universities“, Stanley Fish addressed a question from readers.

Isn’t the mastery of forms something that should be taught in high school or earlier?

His response, based on years of experience as a college professor:

By all the evidence, high schools and middle schools are not teaching writing skills in an effective way, if they are teaching them at all….

High schools should try something different.

I think K-12 schools would see greater success if they used something like the Kerrigan method of ‘Writing to the Point’, a methodical and efficient approach to writing instruction.  I would love to see a separate composition course in high school, employing a basic method like that of Kerrigan, and involving plenty of practice writing.  I suspect a course like this would work well as an online option.

It worked at New Dorp High School in New York City, where it was found”that returning to fundamentals like explicit grammar instruction and formulaic writing has succeeded in turning around the dismal performance of high poverty students”.

Students ‘baffled’ and ‘dumbfounded’ by 2013 college admissions decisions

The number of college applications continues to increase and admission rates continue to decrease, with 2013 decisions leaving some students ‘a bit “baffled” and “dumbfounded”’.

The New York Times recently reported 2013 acceptance rates for about 75 colleges.

Applicant pools are growing larger; the University of Southern California received more than 47,000 applications this year. That’s 10,000 more students than just two years ago, when this year’s applicants were sophomores.

Colleges are also becoming more selective. The Ivy League reported an admit rate that dipped to 5.79 percent at Harvard this year. Stanford accepted 5.69 percent of its more than 38,800 applicants. The University of Chicago accepted only 8.8 percent of its more than 30,300 applicants.

Why are so many good students denied admission?

There are various reasons for this: Colleges concerned about their rankings are appearing more selective (and appealing) than ever. Admission officers often select students who are likely to enroll. And, of course, the huge volume of applications dictates that there just isn’t enough room for every good student who applies.

Unexpected outcomes have reinforced the sometimes unpredictable nature of the “holistic”college application process.

There are other reasons for the outcomes, all of which make holistic college admissions a complex, unpredictable process. So if you are a student or a parent who is scratching your head as you review the chart, just know that you’re not alone. Our student bloggers are a bit “baffled” and “dumbfounded” about the admission decisions, too.

One particularly frustrated parent:

I’ll scream if I hear the word “holistic” at a college info session again….

Dan Edmonds argues that higher selectivity is a myth.

What many parents and students don’t realize is that increasing numbers of applications isn’t necessarily a sign that it’s harder to get into a selective school; rather, it’s a sign of changes in behavior among high school seniors. More and more people who aren’t necessarily qualified are applying to top schools, inflating the application numbers while not seriously impacting admissions. In fact, it has arguably become easier to get into a selective school, though it may be harder to get into a particular selective school.

This helps explain why students feel pressured to apply to so many schools, with the average student applying to more than nine colleges this past fall.

Our high school guidance counselor keeps saying there is no need to panic.

… there are more than 2,000 four-year colleges and universities in this country, and many of them offer an excellent education and admit the majority of students who apply. But as interest increases at selective institutions, it may help disappointed applicants to know that thousands of smart, talented, qualified students had to be turned away.

Average 529 savings reach all-time high

Average balances for 529 college savings and prepaid tuition plans grew to a record $17,174 in 2012 — up 12% from an average of $15,349 in 2011, according to a report from the College Savings Plans Network, a nonprofit and affiliate of the National Association of State Treasurers.

In December 2012, the number of existing 529 accounts increased by about 4% to 11.1 million, up from 10.7 million in December 2011. Total 529 investments reached a record $190.7 billion, up from $165 billion in 2011.

Those numbers were also helped by a strong stock market last year. In 2012, the S&P 500 soared 13%.

Is the college savings situation improving or not?

The picture painted by these numbers is rosier than the one depicted by another report of fewer families saving for college.  The discrepancy between the this story and previous one could be due to what was measured (only 529 plans vs. total college savings), source of information (plan administrators vs. parents), and focus on different years (2012 vs. 2011).  Even with this latest positive indication for college savings, there are valid reasons why many parents still “feel overwhelmed, annoyed, angry, or frustrated”.

Yet, students and their families are still struggling to keep up with rapid increases in tuition….

Average tuition paid at public community colleges and four-year colleges and universities rose by 8.3% last year, according to a recent report by the State Higher Education Executive Officers Association.

For the 2012-13 school year, the average prices for tuition, fees, room and board for in-state students at public four-year colleges and universities is $17,860, according to the College Board. And the average bill at private institutions is nearly $40,000.

College savings hits all-time high (CNNMoney)

College Savings Plans Network 2012 Year-End 529 Report

Newly released College Scorecard is ‘not a game-changer’

Most reviewers are underwhelmed by the Obama adminstration’s new College Scorecard intended to help families compare schools and learn ” where you can get the most bang for your educational buck”.

The scorecard is “not a game-changer as much as the administration would like to believe,” said Terry W. Hartle, senior vice president of the American Council on Education, a major association of colleges and universities.

What’s in the Scorecard?

Average Net Price: What an undergraduate student pays after grants and scholarships are subtracted from the institution’s listed cost of attendance.

Graduation Rate: Number of students who graduate within six years at four-year institutions and three years at two-year institutions.

Loan Default Rate: Percentage of students who default within three years of entering repayment.

Median Borrowing: The median amount borrowed by undergraduate students.

Employment: Information about postgraduate employment and salaries is self-reported by institutions. [not yet available]

The data is not recent and already available elsewhere.

But some of the data in the new scorecard is a few years old, and most of it has been available from other sources, notably the federal government’s own College Navigator site. Further, the information is presented as averages and medians that might have little relevance to individual families. The scorecard does connect to each institution’s net price calculator, which allows individualized cost estimates, but it does not provide side-by-side comparisons of multiple schools, as other government sites do.

A good starting point

Like many other resources for families deciding on higher education, the College Scorecard is a good starting point.  The most time-consuming part of the college search is typically in uncovering details about departments, teaching, career preparation, personalized costs, campus culture, and other aspects that are not easily packaged in scorecard fashion and are often inscrutable to the typical applicant.

Related:  New web tool shows salary data broken out by college and major (Cost of College)

‘Minnesota is becoming a Mecca for robotics’

In Minnesota, high school robotics teams now outnumber boys’ hockey teams.

An explosion in the popularity of high school robotics teams has suddenly made it chic to be geek.

Robotics team members are getting varsity letters and patches, being paraded before school assemblies like other sports stars and seeing trophies in the same lobby display cases as their football, basketball or baseball counterparts. . . .

A telling statistic: For the first time ever, there are more varsity robotics teams than there are boys’ varsity hockey teams in the state. There are 156 high school boys’ hockey teams and 180 robotics teams, up from 153 last year, according to the Minnesota State High School League.

The number of robotics teams in the state is expected to surpass 200 soon, growing from just two in 2006.  Tournaments spur teamwork and a sense of competition, particularly valuable for students who may not have a chance to gain that experience through sports.

“Minnesota is becoming a Mecca for robotics,” said Joe Passofaro, one of the mentors/coaches for the Prior Lake High School robotics team, which won the state championship last year. “We’re getting a group here that is coming onto the world scene.”

High school robotics helps lay the groundwork for STEM studies in college.

The University of Minnesota is already starting to see ripple effects. In 2008, two years after the first robotics teams appeared, 12 students with robotics team experience enrolled at the university’s College of Science and Engineering. Last year that number had grown to 76.

Apparently, there is some disagreement on whether we need more STEM graduates:

• Government pushes for training more scientists, but where are the jobs? (Cost of College)
•  ‘our nation’s march toward a more technical, STEM type workforce’ (Cost of College)
• The Myth of STEM Labor Shortages (Pope Center for Higher Education Policy)
• America Faces Shortage of Science, Technology Workers (The Business Journal)

‘What Families Can Do When a Child May Have a Mental Illness’

From the National Alliance on Mental Illness (NAMI):

If you are worried about your child’s mental health, follow your instincts. Unexplained changes in a child’s behavior and/or mood may be the early warning signs of a mental health condition and should never be ignored.

There are many different types of mental illness, and it isn’t easy to simplify the range of challenges children face. One way to begin to get a handle on this question is to get an evaluation of your child or teen by a licensed mental health professional.  Because all children and youth are unique and the local mental health services, insurance coverage and school services vary a great deal from community to community, it is a challenge to find the right kind of help for your child.

Like many others, my family has had to deal with this issue.  You can read more about different types of mental illness and what steps parents can take to help their children at the NAMI website.

Have a joyful and peaceful Christmas.

 

Related:

• Parents Worry Their Child Could Be ‘Next Adam Lanza’ (CBS Detroit)
• ‘Every 20-something I know is in therapy for something’ (Cost of College)

New York proposes two new types of high school diplomas

The New York State Board of Regents will soon vote on an initiative that would create two new types of high school diploma, thereby offering more options for different types of students.  One diploma would focus on STEM studies and the other would teach technical vocational skills.

The STEM diploma would include an advanced calculus course or extra science course for an advanced degree in technology. The CTE diploma would have students participate in specialized training programs, which could replace an elective or core course.

Some possible CTE substitutions for students to learn technical skills include a Federal Aviation Administration certification, a Cisco Certified Entry Networking Technician certification or a National Occupational Competency Testing Institute Job Ready Assessment, Schumer said.

The lohud.com editorial board supports this initiative, citing the unwillingness of domestic employers to pay for such training.

Sunday’s “60 Minutes” report on the skills gap — three days later Schumer followed with his own related proposal to the state Board of Regents — noted that many U.S. manufacturers, competing with cheap labor the world over, no longer are willing to pay to train new workers for high-skill jobs; they expect school districts, community colleges, four-year colleges and other taxpayer-supported institutions to pick up all or some of the cost.

If approved, the new diploma programs may be in place as early as next school year.

This proposal appears to be a move away from the state’s recent emphasis on a single path for all students, an idea that was associated with the recent elimination of the less rigorous “local diploma”.  Now there’s recognition that “one size doe not fit all”.

“The Regents understand that one size does not fit all students. Too many of our students are forced onto a single graduation pathway,” Tompkins said. “Their skills and potential are stifled and they end up unprepared for success in adult life.”

Changes are needed for graduates to meet 21st century job requirements.

Schumer said his support follows employers’ accounts of gaps between available positions and skilled applicants. Industrial Support Inc. in Buffalo, for example, often has trouble filling job openings for machinists and welders, skills found along the CTE pathway, he said.

The state Labor Department, meanwhile, projected a 135 percent increase in STEM-related computer and electronic product manufacturing jobs in the Albany area from 2008 to 2018, anticipating the addition of 1,800 positions.

“As upstate New York’s economy switches gears towards the advanced industries of the 21st century, we need our students and education system to keep pace,” Schumer said.

CTE and STEM students would be exempt from taking the “notoriously difficult“ global history Regents exam.

The state Education Department has proposed requiring a CTE assessment in place of a global history exam that’s required for students pursuing a traditional diploma. Those on the STEM track would substitute a second math or science assessment for the global history exam.

Students still would be required to pass a course in global history and to pass English, math, science and U.S. history exams.

Related:

• Should we go back to more vocational high school options? (Cost of College)
• ‘Sending the wrong students to college’ (Cost of College)