Many college students, prospective students and their parents wait anxiously by their mailboxes — electronic and otherwise — this time of year, waiting to see what all that time with the Free Application for Federal Student Aid (FAFSA) has yielded. When an award package arrives from a school, the stake holders typically wonder just how good the award is. But for entering freshmen, this may be the wrong question all together.
What prospective freshmen and their parents should really be asking is: if nothing changes for me financially, will this school offer the same level of support in the future. What you don’t want to get trapped by is a kind of bait-and-switch arrangement where your — or your student’s — freshman aid package looks much better than the annual award he or she will receive throughout the remainder of his or her college years.
Colleges Tend to Favor Freshmen
It’s hard to imagine that schools are intentionally trying to rip off students after their freshmen year, but they all are driven by their own institutional priorities. Getting freshmen in the door can be a much higher priority, which means more financial aid is going to be devoted to those students.
How can you tell if the aid package will change as your child gets older? A great resource is COLLEGEdata, which offers a variety of online tools for research. I am using the site’s data for two schools – Northeastern University and Vanderbilt University – to illustrate how institutions can treat upperclassmen much differently from the way in which freshmen are treated. These schools were chosen, in particular, because they were recently highlighted in this blog for being particularly generous with their financial aid programs.
Northeastern University has budgeted a record amount for its institutional financial aid programs in 2013-14. In addition to providing an “unprecedented” $204 million in financial aid dollars, the University also promotes a program referred to as the “Northeastern Promise.” The program guarantees students who receive need-based, institutional financial aid a flat tuition level for eight semesters. This allows students and their families to anticipate and budget for the costs of attending Northeastern.
There are lots of numbers on Northeastern’s chart, but what I want you to pay attention to is the percentage of financial need that the school meets for the typical freshman. That number is 69%, which is low to begin with. Northeastern University’s percentage of financial need met drops to 59% for all undergrads. That’s significant.
The average gift award (free money) that an upperclassman at Northeastern receives is $15,619, which is substantially lower than the average freshman award of $22,783.
Vanderbilt University has been particularly aggressive in raising funds to boost its endowment for need-based financial aid. According to an Inside Higher Ed report, Vanderbilt has “prioritized increasing institutional need-based aid, and provide[s] a simple playbook: emphasize need-based aid and make it a presidential priority.” Over the past decade, Vanderbilt has seen the average debt that its students graduate with decline from more than $24,000 in 2003-04 — about $7,000 over the national average at the time — to $18,600, which is $8,000 below the national average for student loan debt.
Let’s contrast Northeastern’s financial aid practice with Vanderbilt University’s financial aid policy. Vanderbilt is far more generous. The university meets 100% of the financial aid need of its freshmen and its older students. The average aid award for freshmen is $42,397 versus $41,835 for all undergrads.
So, when you are weighing your college options, be sure to pay close attention to how schools treat all their students, not just the freshmen. Being vigilant could save you thousands of dollars in the long run, as well as make your college career considerably less stressful.