February 7, 2013

Merit Aid

More schools are offering financial aid to students based on grades and accomplishments.

Jessica: Allie O’Brien has spent a lot of her senior year filling out college applications.

Allie O’Brien: Kind of stressful. Everyone has this worry that they’re not going to get in anywhere.

Jessica: Allie did get in somewhere – the University of Vermont, a backup school she wasn’t considering seriously until she got a letter in the mail.

Allie: A letter that said I was getting a scholarship from them. Over the four years, could get $48,000.

Jessica: That $48,000 was something called merit aid, based on her academics.

Allie: On the common app, I checked a box that said, ‘do you want to be considered for merit aid?’ I didn’t actually think it would amount to anything.

Jessica: Did you even know what merit aid was before this?

Allie: Not really.

Bari Norman: Merit aid is aid that’s based on academic, athletic, other talents.

Jessica: Bari Norman is a college counselor and co founder of Expert Admissions.

Bari: When you look at merit aid, you are looking at an interest, skill, talent that a student has that they can bring to a campus that colleges want to reward in some financial way.

Jessica: Not all schools grant merit aid. Many elite schools only give financial aid, or money for students who can’t afford the school’s tuition. But in recent years, many colleges have been increasing their merit aid with more students receiving more money based on their skills and talents.

Why has there been an increase in merit aid over the past few years?

Bari: Colleges really are competing with one another for students. And it’s a way for them to attract more students and better students to their campus.

Jessica: A competition between colleges that some call ‘a bidding war’… But it can be an advantage for students.

Bari: So they call the school that gave them less money and they say, ‘listen this other university has given me x amount. I really would like to come here but it’s going to be difficult for me and my family to pay. Is there any way that you might be able to match that or be able to provide a little bit more assistance?’

Jessica: Which is exactly what Allie could do to her first choice, the University of Dayton in Ohio. If they can’t match the $48,000 offer, the University of Vermont could go from being Allie’s backup to her best bet.

Allie: You know, definitely going to go back to it and I’m considering it a lot more. It just, like, feels good to know that not only did you get accepted, but they kind of want you to go there.

Jessica: Would you feel guilty giving up the $48,000 and picking a more expensive school?

Allie: Yeah, I probably would.

Jessica: Not everyone thinks the increase in merit aid is a good thing. Critics say this money is often going to students who don’t need it. They argue there should be more financial aid to help students from low-income families break the cycle of poverty.

In your opinion, does merit aid take away money from lower-income families? I mean, colleges could be using this money to grant need-based scholarships.

Bari: Financial aid isn’t just money that’s set aside by the colleges. It’s federal money that is coming in, and so there is money that is need-based that doesn’t ever get to merit aid students. It’s also the case though that there are students who receive merit aid who also have financial aid, and so they are not mutually exclusive.

Jessica: So what would our expert tell Allie to do?

Bari: First thing you need to do is you need to have an honest discussion about finances with your parents, or whoever you live with or who is going to be financing your college education. And I would look seriously into UVM.

Jessica: So what can you do to get your hands on this extra cash? Bari suggests researching or asking your college counselor for a list of schools with a reputation for giving out merit aid.

Another option is choosing a safety school.

Bari: Meaning a place where you’re going to be a really top student. Where you really have an expectation that you’re going to get in and a place that’s known for giving merit aid, of course.

Jessica: Your final decision may not have been your top choice but graduating debt free is a smart choice.

Jessica Kumari, Channel One News.


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