Why many upperclassmen lose out on financial aid

Some institutions may front-load financial aid to attract students

For many students, institutional financial aid tends to dry up as they advance in their undergraduate careers, Rochelle Sharpe reports for the New York Times

When seeking out financial aid, students are often unaware of how grants may change over the course of their time in college. Tools such as the Financial Aid Shopping Sheet, net price calculators, and the Education Department's College Scorecard do not forecast changes in financial aid for upperclassmen.  

One survey, the National Postsecondary Student Aid Study, does regularly track changes in students' financial aid. Brad Hershbein, an economist at the W. E. Upjohn Institute for Employment Research, conducted an analysis of the survey for the New York Times. He identified a significant decrease in grant aid as students advanced throughout college.  

For example, during the 2011-2012 academic year, students at private colleges lost an average of about $1,000 in institutional grant aid between freshman year and senior year, marking a drop of more than 6% from the average freshman grant of $15,800. The trend was weaker at public universities, where students tended to receive about the same amount of institutional grant aid from year to year—about $4,600 on average.

However, only 31.8% of freshmen at public colleges received any institutional scholarships, compared with 79% at private colleges. 

Promoting cost transparency and simplifying financial aid communications

Why upperclassmen get less financial aid

There are a number of reasons why upperclassmen tend to have less financial aid than freshmen. Students may see their financial aid change after transferring schools or struggling academically. And when colleges and universities increase tuition and fees, they rarely increase aid to compensate for higher costs.

Another issue is that many students fail to meet deadlines to apply for aid. Paul Jean, the vice president for marketing and communications at Bridgewater State University, says first-year students are more likely to stick to deadlines. Hundreds of upperclassmen at Bridgewater lose institutional grants each year because they did not file their financial aid forms on time. 

Selecting and administering financial aid forms

"There are so many technicalities," says Elsa Martinez-Pimental, a counselor at uAspire.

She notes that some upperclassmen must fill out multiple forms with different deadlines to get government and institutional aid renewed. In addition, students can lose aid if they do not take the correct distribution of credits or fail to complete at least two-thirds of the credits they are working toward earning.

For other students, maintaining a certain GPA to retain their scholarship is also a challenge.

Some colleges "impose a GPA that half the students can't keep," says Sandy Baum, senior fellow at the Urban Institute.

St. John's University was forced to drop its minimum for GPA-restricted scholarships to 2.75 last fall. For years, about 30% of students routinely lost Academic Achievement Scholarships of $5,000 to $12,000 because they could not keep the required 3.0 average GPA.

Front-loading faces backlash

Concern is also growing over whether some schools, particularly those facing financial hardship, are front-loading merit aid to students as an incentive to enroll, and then reducing or eliminating it later.

"If I were an Education Department official investigating whether colleges front-load aid and I saw these patterns, I would ask for a lot more detail and information," Hershbein says.

In 2014, the National Association of Student Financial Aid Administrators updated its code of conduct to recommend that members make clear scholarship renewal requirements. The group had received complaints from consumers about deceptive award letters.

"[Colleges] tend to mislead students into believing they're going to be getting the same amount of money for four years," says Harold Levy, executive director of the Jack Kent Cooke Foundation.

Larry Griffith, senior vice president overseeing scholarships at the United Negro College Fund, says he has received numerous calls from students whose financial aid has been cut and are seeking money to make up the difference. According to Griffith, about two-thirds of the fund's programs are geared toward helping upperclassmen.

Colleges may also rescind aid if students get outside scholarships, a move that hits upperclassmen especially hard. Griffith, who administers the Gates Millennium Scholars program, says that after freshman year, "very generous awards all of a sudden disappear." The program picks up the difference, paying about 24% of scholars' freshman year costs and nearly 43% of costs for sophomore year. 

Re-designing financial aid to set up students for success

The nonprofit advocacy group Bottom Line has told students to avoid several colleges that frequently cut aid.

"We were noticing changes in grant packages, with much different aid in year two," says Greg Johnson, chief operating officer of Bottom Line. "It felt like it was a marketing tool. They needed to fill their freshman class."

But cutting financial aid only hurts colleges in the long-run, enrollment managers argue.

"Enrollment management is also about retention," says Jon Boeckenstedt, an enrollment manager at DePaul University. "If you want students to leave, the easiest way is to take away their financial aid"

(Sharpe, New York Times, 4/6). 


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