SLC 2019 @ Pepperdine

Money Matters - Understanding and Navigating Need-based and Merit-based awards at Private Institutions

Charlie Leizear, Occidental CollegeShelley Kierman, Milken Community SchoolsRoss D. Mankuta, Milken Community Schools

Objectives

Curioustolearnhowmeritandscholarshipaidisbeingusedasarecruitmenttoolforadmissionsoffice? Thissession,intendedforbeginners,willexploreallthingsfiduciaryintheadmissionsprocess.Comerefreshyourunderstandingoftheterminology- needawarevs.needblind,meetingdemonstratedneedvs.gapping,nettuitionrevenue,discountrates,andthebiggestconundrumcurrentlyfacingtheprofession-theabilitytopayvs.thewillingnesstopayforfamilies.

Welcome!

• ScholarshipLingo

• InstitutionalAwards

• TipsandTricks

• Questions

TalkingtheTalk• NeedAware

• NeedBlind

• Meetingfulldemonstratedneed

• Gapping

• Nettuitionrevenue

• Discountrate

• AbilitytoPayvs.WillingnesstoPay

NeedBlindvs.NeedAware

NeedBlind• TheGood:Nofinancialinformationisusedtodeterminea

student’seligibility

• TheBad:Manyoftheseinstitutionscan’tmeetfullneed

• TheFinePrint:NeedBlindprocessesseldomapplytostudentsadmittedfromthewaitlistortransferstudents

• International:Only5schoolsofferneed-blindprogramsthatareinclusiveofinternationalstudents-Amherst,Harvard,MIT,Princeton,&Yale

NeedAware• TheGood:Studentstypicallyreceiveverycompetitiveaid

packagesthatmeettheentiretyoftheirneed

• TheBad:Preferentialtreatmentmaybegiventostudentswhodon’trequirefunding;admissionforstudentsrequiringsignificantaidmaybeespeciallycompetitive

• International:Need-basedaidforinternationalstudentsisextremely,extremelycompetitive

MeetingFullNeed

• TheGood:Institutionscommittofundingstudentstooff-setwhateverisn’tcoveredbythefamily’sEstimatedFamilyContribution(EFC)

• TheBad:Sometimesfamiliesdon’tagreewiththeirassessedEFC.

• TheFinePrint:Stateinstitutions-alatheUniversityofMichigan-mayonlydothisforin-statestudents

TheLandscape

0 20 40 60 80 100 120

NeedBlind

NeedBlind,MeetFullNeed

NeedAware,MeetFullNeed

NumberofPrivateInstitutions

NumberofInstitutions

Gapping• TheGood:Notapplicable,exceptperhaps studentscan

resttheirlaurelsonknowingtheywere‘admitted’eventhoughtheycan’taffordtomatriculate.

• TheBad:Studentsareadmittedbutaren’tgivenfinancialaidawardstohelpoff-setcostofattendance.Formany,itbecomesafinancialimpossibilitytoenroll.Forothers,theyenrollanyway,takingonexcessiveloans.

FAFSAvs.CSSProfileForm• CSSProfileForm typicallyrequiresmoreinformationthan

theFAFSAfromthefamilyandweightsincomeandassetsdifferently.

Forexample:

• Non-custodialparentfinancialinformation• Smallbusinessvalue• Homeequity• Giftsaretreatedasincomeratherthanas

assets

About200schoolswillrequireboth.

Prior-PriorYear• TheGood:Taxdataisalreadycompletewhenit’stimeto

applyforaid,andoftencanbeinstantlydownloadedusingtheIRSDataRetrievalTool.

• TheBad:Aiddeadlinesarenowoftenmuchearlier;notimeforprocrastination!

• TheFinePrint:Familieswhosefinancialstatushaschangedsignificantlyareimpactedandoftenneedtosubmitanappeal.

DatacareofForbes.com,2017

DatacareofForbes.com,2017

SoMuchFinePrint• EFCsdonottakeintoconsiderationanyparentorstudentassetsthatmaybereportableon

thefinancialaidforms,andcountedintheaidformulas.

• Assetscountedarenon-retirementassets,andtheaidformulasweighassetsinstudents’namesmoreheavily(20-25%)thantheydoparents'assets(5-5.64%)

• Smallbusinessassetsdonotcountunder theFederalMethodology, buttheydounder theInstitutionalMethodology.

• HomeequitycountsundertheInstitutionalMethodology, andnotatallunder theFederalMethodology, depending upon thestate.

• Therefore,whenyourassetsareaddedintotheoverallaidcalculationyouractualEFCmaybehigher.

• Furthermore, theaveragecostofcollegeinyourhomestatemayvaryfromthenationalaveragecoststhatthistableusestoestimateaideligibility, andtheEFCsshownarebasedsolelyontheFederalMethodology ofcalculatingEFC.

$-

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

$80,000

$90,000

$100,000

$9,088 $31,698 $50,627 $78,457 $111,919 $134,077 $172,791 $177,571 $238,976 $325,366abilitytopayperyear willingness topayperyear

DatacareofMoody’sInvestments,2016

Ability&WillingnesstoPayforPrivateCollege,byAGI,2016

(4727casesreviewed)

NetTuitionRevenue&DiscountRate

• NetTuitionRevenue(NTR):Theamountofrevenueaninstitutiontakesinfromtuitionandfees,netofallinstitutionalgrantaidprovidedtostudents.

• DiscountRate:Theratiooftotalinstitutionalgrantaidrelativetogrosstuitionrevenuesataninstitution

Privateinstitutionspipednearlyhalfofeverydollarchargedintuitionandfeesbackintoscholarshipsandgrantsforfreshmen.

DiscountRateTrends

Institution-SpecificScholarships

• Whyuniversitiesgivescholarships,orwhytheydon’t

• Whatdoesitmeantobemeritorious?• Meritisintheeyeofthebeholder.J

• Application-basedprograms• HonorsPrograms,Fellowships,etc.

• Meritaidvs.financialaid

Institution-SpecificScholarships• Guaranteed

scholarshipswithpublicizedcriteria

• Generalscholarshippools

“automaticallyconsideredbyapplyingtotheschool”

AnyOldUniversity

$50,000 Tuition$15,000 Housing&Fees$5,000 Travel,Books,Etc.

$70,000 CostofAttendance

AwardsMayVary

MeetingFullNeed$70KCOA

$30KEFC$40Kininstitutionalaid/grants,federalloans,andself-help

Gapping$70KCOA

$30KEFC$20Kininstitutionalaid/grants,federalloans$20Kgap

MeritRarelyImpactsThoseWithNeed

Non-Meritorious$70KCOA

$30KEFC$40Kininstitutionalaid/grants,federalloans,andself-help

Meritorious$70KCOA

$30KEFC$20Kina‘Scholarship’$20Kininstitutionalaid/grants,federalloans,andself-help

Bottomline:Familypays$30Keitherwayunlessscholarshipisinexcessofthefamily’sNeedlevel

Familieswithlittle/no‘need’whostillareshoppingformeritaidshouldbecautiousofthefollowing:

• EarlyDecisionprograms• TestOptionalprograms• Admissibledoesnotequatetomeritorious• Negotiating/Barteringforawards

MeritAid:TheFinePrint

TellingQuestionstoAsk• What’syourtotalfinancialaidbudget?

• Whatpercentofyouraidbudgetisusedformerit-basedaid?

• Whatwereyouraverageaidpackagesforlastyear’sincomingclass?

• IfIreceiveanoutsidescholarshipafterIreceivemyinitialaward,whathappens?

Stay in Touch!

Shelley Kierman

Ross D. MankutaMilken Community Schools

skierman@milkenschool.org

rmankuta@milkenschool.org

Charlie LeizearDirector of First-Year Admission

Occidental College

cleizear@oxy.edu