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 Some colleges make their most generous offers to high school seniors
as a lure to attend, a practice known as "front-loading."
But those returning for their sophomore and subsequent years at
university may get thousands of dollars less in grants and
scholarships than they did as freshmen. Often, the free money is
replaced by student loans.
About half of all colleges front-load their grants, according to
financial aid expert Mark Kantrowitz, who analyzed data from the
National Center for Education Statistic's Integrated Postsecondary
Education Data System.
"Colleges practice front-loading because it is cheaper to have
higher grants during the first year, when it affects enrollment,
than during all four years," said Kantrowitz, publisher of
Edvisors.com, an education resource site. "Effectively, it is a form
of bait and switch."
College administrators, however, balk at that label and at the idea
that front-loading is common.
Most colleges try to offer consistent aid packages throughout a
student's career, and there are numerous reasons why grant aid may
drop when first-year aid packages are compared to those offered to
returning students, said Justin Draeger, president and CEO of the
National Association of Student Financial Aid Administrators.
"Higher education is subsidized by so many different sources, and
those are constantly changing," Draeger said.
Grants may be reduced because of institutional factors, such as
changing revenue or state funding, as well as individual factors,
such as students taking fewer credits or failing to keep up a
certain grade point average, Draeger said.
Some schools want to limit debt for freshmen, who are more likely
than returning students to drop out. Also, limits on federal student
loans are lowest for first-year undergraduates: $5,500, compared to
$6,500 for second-year undergraduates and $7,500 for those in their
third year or beyond.
"Schools will stuff more loans into the package as a rule because
the federal direct loan (limit) goes up each year," said Lynn
O'Shaughnessy, author of "The College Solution," and a college
consultant. "Also, schools don't increase merit awards as their
prices go up each year."
The drop in grant aid is particularly steep at private schools.
Returning students at private, nonprofit colleges in 2012-13
averaged $2,842 less in grant aid than first-year students,
according to The Chronicle of Higher Education, which used IPED
data. The average drop-off was less severe for returning students at
public colleges: $815.
Overall, the average net price for returning students - what
families actually pay after grants and scholarships are deducted -
is $1,400 higher than for first-year students, according to
Kantrowitz's analysis of National Postsecondary Student Aid Study
numbers.
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Colleges also do not advertise that they practice front-loading,
which cannot be detected by using the net price calculators embedded
into college websites. The calculators estimate only the first
year's cost of college after expected grants and scholarships are
deducted.
Loans are not considered by the calculators since they increase
rather than decrease the cost of education.
Only a handful of colleges offer four-year commitments to
prospective students that their financial aid won't drop, Draeger
said.
Northeastern University is one of them. The Boston institution not
only promises grant and scholarship aid won't drop, but that this
free aid will increase at the same rate that tuition increases.
The university's grant aid appears to fall when freshmen are
compared to undergraduates overall, but school officials say that is
because the school follows a cooperative education model that starts
in the sophomore year, alternating classroom studies with six months
of full-time work in career-related jobs.
Although guarantees are not common, Draeger said colleges have an
ethical obligation to be clear in their financial aid offers which
grants are renewable and under what circumstances.
When financial aid offers do not provide this information, families
need to ask questions, said Martha Savery, Massachusetts Education
Financing Authority and a former financial aid director for Harvard
Graduate School of Education.
"Families need to ask, 'If all things remain the same, can I expect
the same type of aid (in subsequent years,)'"? Savery said. "Being a
good, educated consumer is part of the process."
(Editing by Beth Pinsker, G Crosse and Steve Orlofsky)
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