Google Master on the middle class & his niece

Catherine wrote: Then, when your child turns 17, you discover that virtually everyone you know with a child who is 18 is paying sticker price.

Google Master writes:

There might be a reason for that. You live in Irvington, where the median household income of about $105,000 puts you firmly in the upper quintile of all households. "Everyone you know" probably also lives in Irvington, or at least Westchester County, whose median income is somewhere between $80K and $100K, depending on the source you use. At a stretch, "everyone" is somewhere on the upper East Coast, which a map of household incomes shows has the highest incomes in the country.

... All of which is a long-winded way to say that you probably don't know the people who are receiving aid, but they're out there.

This reminds me of a discussion I was having with a fellow software engineer who probably grosses about $120K, and his wife, an SAP consultant, easily $200K. He was shocked when I told him his family was not middle class, but rather in the upper 2-5%.

When you live and work among five-percenters, sometimes you lose sight of the average family out there struggling to put a couple kids in college, feed the family, and pay the mortgage on $48K.

My brother does not have a four-year degree and has worked blue-collar jobs since he was 14. He lost his wife when their daughter, my niece, was in high school. That niece got a full ride her freshman year and tons of aid the remaining three years. She graduated a couple of years ago with honors in two departments.

Very good to hear! (And I love the story about the software engineer....I remember, years ago, reading that all Americans universally consider themselves to be "middle class." I hope it's true, because it's one of the things I cherish about this country.)

re: more people in Irvington paying full fare ---- I wonder --- ?

On the one hand, GM is right: many people here (by no means all) are better able to afford the sticker price.

On the other hand, many people here are also better able to afford high-end tutors, including SAT & ACT tutors.

Another factor: grade deflation in "star schools," which by my arithmetic a few years ago is occurring in my public high school (or was then).

C's impression, which I think is probably accurate, is that his peers who attended our public high school are far more likely to be paying sticker price than his peers at the Jesuit high school.

Why is that?

The Jesuit high school is not cheap, and parents there are not poor. I was shocked one back to school night when I realized just how expensive many of the family cars were. Parents at the school don't "act rich" and don't "dress rich" (at least as I define these things, which may be naive or just wrong, I realize) -- so I was brought up short when I realized that we had not actually moved our child to a "middle class" school.

Nevertheless, a large number of those students, it appears, are now attending college and receiving a discount to do so.

I'm going to ask C. how many of those students are receiving merit aid from Catholic colleges.

One more thing: I'm thinking that SUNY may have kept prices down better than a lot of other states, which might explain why SUNY isn't offering a lot of merit aid (although as I think of it, I believe I spoke to a parent whose daughter was given significant merit aid to attend Binghamton a few years ago... )

No one in my circles has been given merit aid to attend a SUNY school, and C was not offered merit aid to attend Binghamton, either.

I had the impression that one of the SUNYs was recruiting him pretty actively -- was it Geneseo? -- but no mention was made of merit aid.

Not a large sample size, I realize!

Merit Aid for Parents

Catherine has kindly offered me the keys to make the occasional post here at KTM. My kids are too young to have issues with math education yet, so I will probably stick to posts about college admissions, which has been a big topic lately. I thought I'd start with a primer on merit aid.

Merit aid is probably the least well-understood piece of financial aid. The entire way that colleges figure out what you will pay is purposely vague anyway. It is based on a sense that a college that costs a lot is perceived to have a high value, while lowering tuition makes a school seem like it is lower in quality. I’m not kidding here – a few years ago, a consultant recommended that to raise our enrollment, we raise our price by 10K per year and raise average financial aid per student by 9.5K. They figured that would actually attract more students by making us look high quality and generous with aid.

The cost of college is adjustable – an institution won’t tell you the real cost until after you have been accepted and they see your FAFSA (which is basically the information on your tax return – imagine if a car dealer asked for that information before you started negotiating!) Most schools have a discount rate, which is the ratio of the real cost to the sticker price, but the published discount rate isn’t meaningful. Instead, the discount rate is different for every student.

So what should a parent understand about this process? First, the largest non-need based scholarships are grouped together as merit aid. You never apply for merit aid specifically. Instead, you are considered for merit aid as part of the admissions process. For the most part, privates give more merit aid as part of so-called enrollment management, though as Catherine noticed, state schools are also starting to compete with merit aid, especially for out of state applicants. Enrollment management is the process of getting a class of students with the desired statistics (grades/scores) that can pay the bills. So a student who is in the bottom 25% of the admitted students will be asked to pay full fare (or full fare minus any federal or other need-based financial aid, but that’s another topic). The admissions and financial aid folks know this person is probably excited to be admitted at all, so will make it work. Another student in the top 10%, on the other hand, has other options and is likely to get a better package with some kind of scholarship.

To some extent, every college wants the same students, but some schools give more merit aid than others. The Ivies and the top liberal arts colleges, which admit ~10% of their applicants, don’t give much merit aid. They don’t have to – even their top 25% applicants are excited to get the admissions letter and they can fill a strong class without discounting tuition.

There is a book out there that discusses all this in more detail, called The Financial Aid Handbook: Getting the education you want for a price you can afford.

If you go to the Amazon link and search inside the book for merit aid, you can get the main points. The Amazon site also lets you look at their list of sixty schools that give a significant amount of merit aid. You will notice that the 75% verbal/math SAT score for most of these schools is 1300-1400. So a student with 650+ SATs and solid grades can potentially score some good deals, although not at schools anyone has necessarily heard of! Also, the 25%/75% SAT numbers are public (although as the CMC scandal shows they may not be totally accurate.) You can see an example here, and find many others at collegeapps.about.com

The final thing parents and students should know is that, within a tier of institutions, you can bargain with financial aid. If Oberlin gives you a better package than Macalester, it is worth seeing if Macalester will match or beat it. However, Yale will not be impressed by an offer from Oberlin, but would try to match or beat an offer from Harvard or Princeton.

survey

If you have time to answer, that would be great!

SAT prep and merit aid survey

chemprof on merit aid, part 2

chemprof writes:

[M]erit aid is all part of "enrollment management." The goal is to attract strong students, partly because that helps with rankings but largely because of cohort effects. Schools with a core of strong students are more attractive to other strong students, who want to be in classes with other students at their own level. For less competitive schools, managing this is a tricky problem.

...I'd agree that knowing the [specific] criteria [for merit aid] would be interesting, but I don't know that you'd be able to make much use of it. ... [W]e are typically told we can offer 8 scholarships and there might be 30-40 students who admissions has targeted as possibilities (based on stated interest and their general ranking). Picking the 8 is a matter of reading the files and talking to admissions, and nothing about criteria or the decision making process is ever written down!

Oh, and our admissions department ranks every file on a 1-5 basis where 1 is highest. However, the faculty have often thought they overlooked strong students (as 2 or 3 ranked), because those students had fewer extra-curriculars or were otherwise less interesting to admissions. 

chemprof on merit aid and an upper cut-off

re: merit aid, chemprof writes?

The big thing to know as a parent is that the major opportunity for aid happens when students enter college. There is less merit aid available for transfers at most places, even if they admit a lot of transfers, and if you aren't awarded merit aid on entrance, there is usually no mechanism for getting an award later. 

[snip]

For our science scholarships, we look at math SATs, and typically give them to students whose math SAT is 650-700. Why an upper cutoff? Because we've found that students above that are using us as a safety school, and might come if they get a major merit award but not if they only get a smaller one. But if someone was at 710 and admissions was really excited about them, we might push things around a bit.

merit aid at the University of South Carolina

anonymous writes:

The University of South Carolina has an extensive Honors College, which offers upper-division classes in a wide variety of fields, in addition to the more usual freshman-sophomore ones. All Honors College courses are taught by professors (no TAs) and the classes are small - my son and his wife had classes as small as 4 students (2 grad, 2 undergrad) and few above 20-25. An Honors College degree requires a senior thesis. The last I heard, the Honors College required at least a 1400 SAT, but most Honors College students receive merit scholarships - for out-of-state students, such scholarships qualify them for reduced tuition (essentially the in-state rate). The campus is right in Columbia, and the housing on the historic Horseshoe is reserved for Honors College students. It's not a big brand name, but the opportunity for a great education is right there and the Honors College faculty want to help their students with special programs, internships etc.

merit aid for scores and grades?

A card from Miami University arrived in the mail yesterday promising X amount of merit aid for Y scores-and-GPA.

How do you find out what other colleges and universities are offering?

Have people out there received offers?

I'd like to put together an informal list or database of what's possible----

OCTOBER 11, 2006
Amid Rising Costs and Criticism, Some Colleges Cut Back Merit Aid
By ROBERT TOMSHO


JANUARY 13, 2009
States Weigh Cuts to Merit Scholarships
Budget Shortfalls Threaten Popular Programs That Aim To Keep Top Students Close to Home; 'I Kind of Feel Betrayed'


APRIL 20, 2006
Saying 'No' to the Ivy League
By ROBERT TOMSHO