It’s almost financial aid award season, and students will soon receive awards from the colleges that offered admission. How will this aid factor into your final decision? Lurking between the lines of these award letters are some practices colleges use when offering admission and financial aid. Colleges will either lure students to accept their offer of admission with a financial aid offer or use it to discourage those students who were only offered admission to fill their quotas and inflate their numbers. Let’s discuss how to look at your offers more closely and what you should know before accepting.
1. What is front loading?
Front loading happens when colleges make their most generous financial aid award offers to applicants as a lure to attend. When students return the following year, they may find their school has dropped their previously awarded grants and scholarships. Thousands of dollars may have been lost to the common practice of front loading. So ask these five questions before accepting an award and admission offer:
- Is the grant/scholarship renewable and, if so, for how many years?What you want is the money to continue until you graduate. Bear in mind it may take longer—up to six years—for some students to graduate. Find out the maximum number of times the award will apply.
- What are the strings attached to keeping the grant/scholarship?It’s important to understand the terms of receiving free money awards before acceptance to make sure you can and will perform them. You may have to keep your grades up, stick with a certain major, play an instrument, or be a member on a team. Find out the eligibility requirements each year, including any additional paperwork necessary to keep them.
- If the grant/scholarship is lost, what will replace it?Often student loans are a college’s substitution plan. However, there may be other grants or scholarships available. Ask about them and the application process. Be prepared to continue searching for these and have a college finance Plan B.
- Will the tuition bill increase in the following years and, if so, by how much?Those renewable grants/scholarships may no longer cover the same portion of your college costs if tuition rises. See what, if any, cost components (such as tuition, fees, room, and board) are capped or held at the freshman level.
- Will the grant/scholarship be increased to keep pace with any raised college costs?Be aware that most colleges will not match tuition increases or increase free money aid when tuition rates increase. However, the college bill must continue to be paid.
2. What is college gapping?
In admission, college gapping is a term used in reference to colleges and financial aid awards. The gap between what you can afford to pay—your Expected Family Contribution (EFC)—and what colleges offer in aid creates this gap. Gapping happens when a college makes an offer of admission and doesn’t back it up with financial aid; quite simply, the college doesn’t offer enough aid to cover the difference between the cost of college attendance and your EFC. Gapping is serious business. Colleges use this tactic to “weed out” the good applicants from the average applicants. If you’re at the top of their applicant pool, you’ll receive the aid required to attend. If not, you’ll be gapped in the hopes you’ll reject the offer of admission. It’s all a numbers game. Colleges offer admission to more students than they can possibly accommodate, and gapping helps them lessen the number of students who accept offers of admission.
3. What is award padding?
Colleges will also pad EFC numbers with federal student loans, federal parent loans, and work-study. These should not be considered when determining if the college is gapping you. All students qualify for federal student loans. College aid should only be in the form of merit scholarships and grants. If the difference between what you and your family can afford and what the college offers is padded with loans, the college is gapping you. The lesson for college-bound students and their parents is to carefully scrutinize, analyze, and question each item in a financial aid award letter before bothering to compare one college’s offer to another. It may turn out that freshman year is a best deal at one place, but if the total years until graduation are tallied, another choice may be the better bargain in the end.
If a college is gapping you, it’s your decision (with the help of your parents) to accept the offer of admission or not. If you want my advice, move on to your second, third, or even fourth choice college with a good financial aid package. You’ll not only save your parents a bundle, but you’ll most likely be happier at a college that values your contribution.