Posts tagged ‘stacking scholarships’

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.

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

Scholarships
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)

October 13, 2011

Top ten college scholarship myths

by Grace

Top ten myths courtesy of Mark Kantrowitz

  1. Only straight- “A” students win scholarships
  2. Only minority students win scholarships
  3. My child will get a full-ride scholarship
  4. Only athletes win scholarships
  5. Only the poor win scholarships
  6. Scholarships are just for high-school seniors
  7. The cost of private high school is earned back in scholarships.
  8. $6.6-billion in scholarships went unclaimed last year
  9. Colleges will just reduce other aid if a student has a scholarship
  10. Applying for scholarships is more work than it’s worth


My two cents

Myth 6:  I have no idea how to go about finding college scholarships for younger students, including those that Kantrowitz says students can apply to “as early as kindergarten”.

Myth 9:  I question this one if the “other aid” is need-based.  Most schools do not permit a student to “stack” merit money on top of need-based money.  Instead, a scholarship would simply reduce some or all need-based aid.  Anyone in this situation should check with the specific college before assuming stacking is allowed.

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