Posts tagged ‘Scholarship’

October 21, 2013

Even with a full scholarship there’s no free lunch

by Grace

Even college students awarded a full scholarship sometimes get socked with thousands of dollars in bills.

In reality, a full college scholarship does not usually cover the full cost of attendance.  Most schools require a student to contribute at least a few thousand dollars, either from employment income or from a loan.

Colleges usually require a “minimum student contribution” when calculating financial aid.  They want students to have some skin in the game.

… This payment is often referred to as a “minimum student contribution,” which is a flat payment typically between $1,500 and $4,000 a year. The dollar amount is usually the cheapest for freshmen and the most expensive for seniors. Some schools refer to it as a “summer earnings expectation,” saying that they expect their students to work during the summer and to contribute a certain dollar amount from that income to their education costs….

… schools are encouraged to charge students. For years, the College Board has suggested a minimum student contribution, and specified a recommended dollar amount — currently $1,800 for first-year students and $2,450 for dependent upperclassmen—for many colleges to charge….

Outside scholarships are not usually allowed to replace the student contribution.

When a student gets private scholarships—from a corporation or community group, say—some schools will actually scale back their own aid offering. In other cases, even when aid is enough to cover every penny of financial need, some schools require students to still pay a portion of the college bill out of their own pockets….

Harsh impact on low-income students who are awarded full-need financial aid

The policy is a major hardship for students who can barely earn this amount or who don’t have family to help them cover this cost. When students cannot pay, many colleges suggest they sign up for student loans.

Critics say the policy also underscores how the system is stacked against poorer students: Most colleges will accept a check from any other external source, like a student’s wealthy uncle, for this required payment, but they will not allow a private scholarship to pay this bill, even though the end result for the schools is that they still get paid the same amount. For some students who receive scholarships through the UNCF’s Gates Millennium Scholars program, these contribution requirements equal 5% to 22% of their families’ annual income, says Larry Griffith, senior vice president at the UNCF.

Low-income students may scramble to pay the required student contribution.

Beatriz Barros, a freshman at Cornell, thought her family would only be required to pay $1,400 for her college bills, which was the EFC figure the federal government had determined. But shortly before the school year began, Barros says, Cornell sent her a bill, which showed that her family would be required to pay $5,500 for the year and she would have to pay a separate $2,600 for her summer earnings expectation. Meanwhile, Barros had been awarded a scholarship from the Gates Millennium Scholars program that was large enough to cover her summer earnings expectation, but she says the school’s financial aid office declined to accept it, saying it was a required payment that she would have to make on her own. To pay for her and her family’s extra costs, Barros signed up for federal student loans, abstained from flying home for Thanksgiving, and cut back on her meal plan. “I definitely didn’t expect the bill to be that large—you hear about getting the Gates scholarship and you say, ‘Cool, I don’t have to graduate in debt.’ And then you find out you won’t get to do that and it’s a bit heartbreaking,” she says.

These students sometimes have to forego non-paid internships in order to get a paying summer job.  This puts them at a disadvantage when it comes time to find a job after graduation.

March 25, 2013

Reminder – college scholarships that pay for room and board are taxable

by Grace

College scholarships that pay for room and board are taxable.  Here are more details from IRS Publication 970 on the types of scholarships and fellowships that are tax exempt.

Tax-Free Scholarships and Fellowships
A scholarship or fellowship is tax free (excludable from gross income) only if you are a candidate for a degree at an eligible educational institution.

A scholarship or fellowship is tax free only to the extent:

  • It does not exceed your expenses;
  • It is not designated or earmarked for other purposes (such as room and board), and does not require (by its terms) that it cannot be used for qualified education expenses; and
  • It does not represent payment for teaching, research, or other services required as a condition for receiving the scholarship….

Worksheet 1–1 is used to calculate the amount of scholarship aid that can be excluded from gross income.  If your only income is a tax-free scholarship, you do not need to file a tax return.

Work-study earnings are taxable, included in the IRS category of payment for services.

A summary from the IRS:  Parents and Students: Check Out College Tax Benefits for 2012 and Years Ahead

Related:  Tax season reminders about education tax benefits (Cost of College)

February 26, 2013

Colleges with highest percentages of students receiving merit aid

by Grace

Top 10 merit aid colleges for the 2011-12 school year as compiled by US News & World Report


… Merit aid may be awarded for outstanding academic achievement or for other reasons not tied to academics….

On average, 13 percent of students who had no financial need received some amount of merit grants or scholarships for the 2011-2012 school year, according to data reported by 1,084 colleges to U.S. News in the 2012 annual survey.

The top ten list of schools includes some highly ranked institutions.  Unfortunately, Cooper Union may soon end its free tuition policy due to a “dire budgetary situation“.  Rhodes College in Memphis is one of the Colleges That Change Lives.

The entire list of “colleges that report the highest percentage of their students in the 2011-2012 academic year who “had no financial need and who were awarded institutional non-need-based scholarship or grant aid” excluding athletic awards and tuition benefits” can be found on the US News website.  You may want to check it out, especially if you do not expect to qualify for need-based aid.  Be sure to check details like criteria used in selecting recipients and average merit award amounts.

February 25, 2013

Carnegie Mellon University – an example of transparency in financial aid policies

by Grace

Carnegie Mellon University is unusually transparent in sharing information on how financial aid is awarded.  First, it is clear that awards always incorporate a financial need component.

Carnegie Mellon provides qualified students with need-based institutional grants and scholarships to help fund the expenses of college. Grants and scholarships are considered to be ‘gift aid,’ meaning that neither amount has to be paid back.

Additional details

… Grants are awarded to students who demonstrate financial need….

Carnegie Mellon offers the Carnegie Scholarship which is a joint need- and merit-based scholarship….

Basic principles

Carnegie Mellon’s financial assistance program is designed to meet our dual goal of helping prospective students who have demonstrated financial need afford the cost of education and rewarding those students who have outstanding talents and abilities. Need-based financial assistance is used to enroll high-quality students. Highest quality students will receive the most favorable financial assistance packages.

CMU is open about their policy of reviewing offers from competing schools and their use of statistical modeling.

We have been open about our willingness to review financial aid awards to compete with certain private institutions for students admitted under the regular decision plan. Unlike most institutions, the university states these principles openly to those offered first-year admission under the regular decision plan. While early decision students are not eligible to participate in this aid review process, we will meet their full demonstrated need as calculated by the university.

We use statistical modeling as an aid in the distribution of limited financial aid dollars. It is a strategic tool that helps us pursue our goal of increasing the quality of the student body while using our resources as effectively as possible. This modeling takes into account a student’s intended college major, academic and artistic talents, non-academic talents and abilities, as well as financial need. This approach to awarding financial aid is unique to Carnegie Mellon and has not been developed with the aid of any outside consultants.

Here are some of frequently asked questions about financial aid.

The answer to the last question makes it clear that students are allowed to “stack” outside scholarships on top of financial aid awarded by CMU.

Related:  Maximizing college revenue through financial aid allocation (Cost of College)

July 20, 2012

College merit aid is on the rise, and here’s a list of the most generous schools

by Grace

Merit aid is on the rise, with colleges looking for a boost to their prestige from students with strong grades and test scores.

While there are no national statistics post-recession, an Education Department study released last fall showed that the percentage of students receiving merit aid grew so rapidly from 1995 to 2008 that it rivaled the number of students receiving need-based aid.

Recent College Board data from more than 600 nonprofit colleges and universities show that some are giving fewer students more money or stretching their dollars by handing smaller amounts to more students. But others are expanding the number of recipients as well as the amount of their awards.

“Merit aid is one of the few bright lights in college financing now,” says Bonnie Kerrigan Snyder, a college counselor in Lancaster, Pa. … She advises putting financials in the forefront, sprinkling schools that offer generous merit aid on your college wish list. “Consider the schools that will want you,” she says. “That’s how you will uncover the best deals.”

In a chart accompanying its article, the New York Times offers a treasure trove of data on schools offering the most generous merit packages.  Here are ten colleges that award at least 24% of their incoming students scholarships averaging $17,000 or more.

Amounts represent the estimated merit aid given to first-time freshmen in 2011-12 (asterisks indicate final figures for 2010-11). Figures have been adjusted for inflation. 

Colleges use sophisticated enrollment management techniques to attract desirable students and maximize revenue.

“A lot of it is done by computer programs to calculate how much aid they need to offer to each student so they can get the maximum number of desirable students without going over their financial aid budget,” says Mark Kantrowitz, the publisher of and

Many regional and religious colleges, he says, also try to “optimize their revenue” by offering partial scholarships to the students who can pay the rest of the tuition — even “B” students with an SAT verbal and math score of 1200 or less. Caution: You’ll have to maintain a grade-point average of about 2.7 to 3.0 to renew most scholarships after your first year.

When I searched for colleges for my son a few years ago, I screened for schools that offered merit aid and came up with a list that included many from the NYTimes chart.  This was one area where our high school guidance counselor did not help, although she might have if I had asked.  But as in many aspects of the college search, it’s the families that must do most of the legwork to find the best opportunities.

An important reminder:  Some of these merit scholarships have early application deadlines, usually in the fall of senior year.

  The ongoing confusion about whether a particular school offers merit aid, or only need-based aid, is highlighted by an apparent contradiction in this NYTimes article.  This paragraph from the story claims Stanford University does NOT offer merit aid:

The most exclusive colleges and universities — the Ivy League, Stanford, Massachusetts Institute of Technology, and liberal arts colleges like Amherst — don’t offer merit aid at all. Grants go only to those deemed to have “need.”

But the chart accompanying the story lists Stanford as awarding 5% of its incoming freshman merit aid averaging $5,085 per student.  My research shows that athletic scholarships are the only type of “merit” aid awarded by Stanford.

2nd UPDATE:  After I submitted a comment to the story pointing out the contradiction regarding Stanford, I received a nice email back from the NYT thanking me and letting me know that they took Stanford out of the article.  And they did not publish my comment nor did they add any mention of this correction. 

Related:  Your chances for merit aid are better at less selective schools (Cost of College)

July 16, 2012

8 ways you can go to college for (almost) free

by Grace

“Free” sounds too good to be true, right?  Admittedly most students will not qualify for a free ride, but it’s still worth knowing what special deals are out there.  Just in case.

You attend an ‘automatic scholarship’ school
There are a handful of schools that offer automatic scholarships covering all costs for students who meet their qualifications.  One example is Macaulay Honors College, part of the CUNY system.  Other schools like Truman State Universty offer partial automatic scholarships, also a good deal for the high-achieving students who can make the cut.

Your family financially qualifies
About 62 colleges pledge to meet the full financial need of students who are accepted for admission.  Most of these are very selective schools such as the Ivy Leagues, so high stats are needed

You have native roots
Native American students qualify for various tuition waivers and scholarships.   In addition to looking at what states and individual colleges offer, students can check the U.S. Bureau of Indian Affairs and the American Indian College Fund.

You survived hardship
Natural disasters and unusually high medical bills are some of the hardships that can qualify a student for special financial assistance.  Medicaid recipients may also be eligible in some instances.

You have the right job
College employees often receive tuition waivers, with many also extending to their dependents.  Some government employees are eligible for similar benefits.

You have no job
State retraining programs pay for college costs in certain cases.  Qualifying for “dislocated worker” status often triggers eligibility.

You were adopted or were a foster child
The Foster Care to Success and the National Foster Parent Association are two sources of financial aid for qualifying students.  Adoptive parent organizations can be another resource for learning about various scholarships offered by colleges, state governments, or other groups.

You’re heading back
Older students heading to college can receive grants and waivers targeted to that demographic.  Some schools even have special discounts for senior citizens aged 60 and over.

Go to this link for more details on pursuing these college deals:  8 Ways You Can Go to College for Free (

March 21, 2012

Purdue scholarship chart clearly spells out basics, but the devil is in the details

by Grace

Basic information about Purdue University merit scholarships is clearly spelled out in an easy-to-read chart.  However, understanding important details below the surface calls for further scrutiny.

Here is Purdue’s chart.

Click to enlarge.

I like charts.  They’re quicker and easier to use if I’m trying to pull out key information about how much college is going to cost.  Click the image on the right to see another chart showing all categories of financial aid at Purdue.

Purdue is a state school ranked #62 on the USNews list of national universities.
 It is particularly strong in engineering, included in the top ten of USNews Best Undergraduate Engineering Programs Rankings.  Other well-regarded areas include business, education, and health sciences.  Cost of attendance is $23,468 for Indiana residents and $42,480 for non-residents. (The maximum Trustee scholarship of $16,000 would put a significant dent in that non-resident tuition bill.)

Some details about Purdue scholarships

Considering the risks of losing merit financial aid, I would think long and hard before encouraging an out-of-state student to accept a scholarship to attend Purdue as an engineering major.  The stress of keeping up good grades in that environment could be overwhelming.

February 21, 2012

Psst – one of Duke’s so-called merit scholarships is actually need-based

by Grace

Be wary of merit scholarships that take financial need into account.

THE DUKE UNIVERSITY SCHOLARS award is listed as a merit scholarship, but it is actually based on financial need.

In one section of their website, it is described as completely merit-based.

Merit Scholarships
Duke University also offers a limited number of merit scholarships. All applicants for admission are automatically considered for any available merit scholarship; specific applications are not required, and are not available. Our merit scholarship programs do not require that the winner demonstrate need; merit scholarships are based on the student’s academic and personal profile.

But if you read further on the University Scholars website, you see a contradiction.

As University Scholars are selected in part on the basis of financial need, it is imperative to file any required financial aid forms as early as possible, preferably by mid-February.

THE UNIVERSITY OF ROCHESTER MERIT SCHOLARSHIPS take financial need into account in a more subtle way.

From the University of Rochester website:

Merit-based scholarships … are awarded to students who demonstrate outstanding academic achievement and potential, regardless of financial circumstances.

We distribute merit-based aid regardless of a family’s demonstrated financial need.

However, in candid blog post Jonathan Burdick, Rochester Dean of Admissions and Financial Aid, wrote about the curious correlation between lower income and increased merit award amount.

We had a “progressive tax” in our merit. On average, each four dollars less in family income increased merit awards one cent. Not much impact per student, but noticeable overall.

Hmm, the lower your income the more merit money you receive.  In defending the correlation, Burdick explains that financial need is incorporated in a camouflaged way.

… needier students were on average more likely to have earned larger merit awards from the committee review process. I expect this result reflects the sympathy most reviewers might have for students whose essays and letters of recommendation describe tougher life circumstances. You don’t have to see a tax return to admire someone who has both achieved in school and comes from a single-parent home, or will be the first in the family to attend college, etc.

This was exactly my thinking, that the reviewers sometimes give extra “points” to students from families with lower incomes, euphemistically described as tougher life circumstances. Parents must decipher this information on their own, since colleges may claim that financial circumstances are not a factor in deciding merit awards.

Be forewarned.  Sometimes even when colleges insist that a scholarship is awarded solely on merit, family income does matter.

Related articles:

February 1, 2012

Only two of the top ten universities give out merit scholarships

by Grace

While all the top ten ranked universities offer generous need-based financial aid, only two – University of Chicago and Duke – award merit scholarships.

First, here are the top ten universities as ranked by US News & World Report.

#1         Harvard University
#1         Princeton University
#3         Yale University
#4         Columbia University
#5         California Institute of Technology
#5         Massachusetts Institute of Technology
#5         Stanford University
#5         University of Chicago
#5         University of Pennsylvania
#10       Duke University

Chicago offers less aid to more students

Chicago awards merit aid to about 10% of its freshman, averaging about $8,000 per recipient.  Here is the description from their website:

Merit awards are determined by the Office of College Admissions regardless of financial need and are guaranteed for four years of undergraduate study. They include the following:

  • University Scholarship: Partial scholarships ranging from $5,000 to $15,000, renewable for four years
  • Chicago Public Schools Scholarship: A full-tuition scholarship to selected students who have graduated from a Chicago Public Schools high school
  • Police and Fire Scholarship: A full-tuition scholarship to selected students who are sons or daughters of active-duty Chicago police officers or firefighters
  • The University also honors National Merit Finalists with a renewable award of $1,000 to $2,000.

Duke offers more aid to fewer students

Duke gives merit aid to about 3% of its freshman, averaging about $25,000 per recipient according to US News reporting.  This excludes their athletic scholarships.  More information is available at their website, but you have to wade through the details to learn that some of these “merit” scholarships actually have a need component.  (I’ll write about this messy detail in a future post.)

Scholarship information for both schools from USNWR, based on 2010 data

University of Chicago Non-need-based Scholarships/Grants  
Average non-need-based scholarship or grant award (freshmen) $7,772
Average non-need-based athletic scholarship or grant award (freshmen) $0
Average non-need-based scholarship or grant award (undergraduates) $12,854
Average non-need-based athletic scholarship or grant award (undergraduates) $0
Duke Non-need-based Scholarships/Grants  
Average non-need-based scholarship or grant award (freshmen) $24,985
Average non-need-based athletic scholarship or grant award (freshmen) $39,470
Average non-need-based scholarship or grant award (undergraduates) $21,158
Average non-need-based athletic scholarship or grant award (undergraduates) $38,398
January 16, 2012

How to approach the private (non-institutional) college scholarship search

by Grace

Although private (non-institutional) scholarships comprise only about 6% of total college financial aid, it can still be worthwhile to devote some time pursuing them.  But it’s important not to get caught up in wasting time chasing small awards, so a methodical, no-nonsense approach like this one from Lee Bierer makes sense.

Start local: Contact your guidance office and check your local high school website. If your high school doesn’t publish a list of scholarship opportunities, check other public and private schools in your area.

Don’t get caught up in the big-money dream: The big-money scholarships (Coca-Cola, Prudential, etc.) receive more than 100,000 applications each year. You’re better off looking in your own backyard for scholarship opportunities. Places to think about: civic groups, Rotary, breakfast clubs, parents’ employers, organizations, churches, local businesses, etc.

Look for “renewable” scholarships: A $500 renewable scholarship may not sound like much at first, but over four years it totals $2,000.

Invest your time wisely: Read the fine print on eligibility and deadlines. Make sure your application positions you as someone deserving of the scholarship. You are better off with a rifle approach where you select “targets” based on an appropriate match. The “shotgun” approach of blasting out applications doesn’t work; don’t waste your time.

Determine whether you are a realistic candidate: Understand the purpose of the scholarship, research who has received it in the past and be honest about how likely your chances are of winning the scholarship.

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