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2012 May 31

Merit scholarships

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My son is just finishing his sophomore year of high school, so I’m spending some of my time thinking about getting him into college.  The two main concerns at this point are finding a college that is a good fit for him and paying for it.  We’ve been saving for college since he was born, and he is an only child, so we’re in better shape financially than most.  Still, we had been counting on the public universities as a reasonably priced option, and that has been getting gradually less realistic as the state support for higher education collapses around the country. Because our savings mean that we are not likely to get much need-based aid (except at very expensive schools), we’ve been hoping that he could get some merit-based aid, which is gradually coming back into favor after a few decades of schools only providing need-based aid and athletic scholarships.

One blog that I’ve been reading recently is Cost of College, which collects news items about college finances and discusses them.  Sometimes the author (Grace) is a little too easily swayed by propaganda pieces (like the misleading statistics in ‘changes in tuition were not driven by changes in state appropriations’), but she often finds interesting news items and web pages.

One item she pointed to was a CBS news article from August 2011 about merit scholarships: University Reveals the Secrets of Winning Merit Scholarships, a report by Lynn O’Shaughnessy on analysis by the University of Rochester’s dean of undergraduate admissions and financial aid of the merit aid given to the incoming class in Fall 2011.  This was not a policy statement or guidelines, but a post hoc analysis of what differences various factors made in the final award amounts.  Following journalistic tradition, Ms. O’Shaughnessy quoted her source as if she had done an interview, but did not point to the real source document that had more information.  It appears to have been from a blog post by Dean Jonathan Burdick: “What kind of scholarship can I get?” posted 1 June 2011.

There were a few surprises, like that having serious conversations with the admissions and financial aid counselors were worth about $3000 in financial aid, but each A on a report card was worth only $62 and each 10 points on total SAT was worth about $115, for a max of about $4100.   Note that the recommended pre-admissions interview was only worth about $250—so the $3000 comes from going well beyond the normal level of discussion. It seems that negotiation skills are as important as academic ability in getting merit aid.

Interestingly, challenging courses were more valuable than high grades (though this might be because only those students with high grades were considered for admission—if everyone has nearly all As, the small differences in grades might not have much predictive value for amount of merit aid).

Letters of recommendation were important (having excellent letters added $1800).  Timeliness in completing the application was worth $400.  Filling out both FAFSA and CSS/Financial Aid Profile was worth $2500 (it is not clear from the CBS reporting whether this was an average of all recipients or a regression coefficient, but the original blog post made it clear that there was $2500 more merit aid for those filling out the forms).  The FAFSA form is free, but the CSS/Financial Aid Profile costs $25 plus $16/college (though some colleges provide a “fee payment code” to cover the $16 reporting fee).  Still, if filling out the form ups the merit-based aid by $800 as Dean Burdick reports, it would be worthwhile (unless it also resulted in decreases in need-based aid).

Of course, Rochester is a high-price institution with a sticker price of $54k, so their typical merit aid of $10k–$12k still leaves the price at a high $42k–$44k.  It is not clear whether other universities have merit aid policies that favor the same students that Rochester favors, and lower-priced public universities generally have little merit-based aid.  I suspect that we should be planning on a minimum of $30k per year, after need-based and merit-based aid, and possibly as high as $45k.  So we’d need savings of $120k–$180k to avoid taking out loans. It seems that a bachelor’s degree now costs the student about a year or two of  faculty salary—it makes me wonder at what point it will become cheaper and more effective to cut out the university administration and hire top-notch tutors directly.

What is clear is that reference letters and direct contact with the admissions and financial aid officers are worth more than I would have expected, and grades worth less than I thought.  It may be worthwhile for my son to cultivate some adult contacts who could write him good recommendation letters (his theater teachers, science fair mentors, …).

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