College scholarships are easy to obtain
(MoneyWatch) Faced with a growing number of families struggling to cover college costs, private colleges and universities are dispensing college scholarshipawards at record levels.
The typical college scholarship at private institutions now covers 53 percent of the tuition sticker price, according to a tuition discount study released this week by the National Association of College and University Business Officers.
While scholarship and grants amounts are on the rise, so are the number of students who receive them. Eighty-seven percent of freshmen attending private schools were given a grant for the 2011-2012 school year.
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While private schools, which must compete with lower-cost public universities, have awarded large grants and scholarships for many years, the strategy appears to be failing for a significant number of colleges. Among the schools surveyed, 50.7 percent experienced a decrease in freshmen enrollment and 45.6 percent saw their entire undergraduate student body decline.
Difficulty filling seats
Despite hefty scholarships, less-selective small private colleges are the institutions finding it most difficult to fill their freshman classes. The survey stated that 83.4 percent of the institutions reporting a decline in freshman enrollment were colleges with fewer than 4,000 students. Private research universities represented only 4.7% of the schools with declining enrollment, and midsize universities represented 11.8 percent.
A 2013 study by Moody's Investors Services documented the same erosion in the number of incoming freshmen. In contrast to what's happening at many private institutions, Moody's noted that most growth has taken place at large public institutions with 20,000 or more students.
Small schools struggling the most
With small colleges experiencing the most difficulty attracting students, it's no surprise that they are the institutions that are the most generous in handing out scholarships. According to the survey, 89.5 percent of small institutions awarded scholarships to freshmen versus just 66.3 percent of research universities.
This isn't surprising because some of the best-known schools in the country are private research institutions, such as members of the Ivy League, MIT and Georgetown, which have no problem attracting students. These elite universities don't dispense any merit scholarships (only need-based aid) because there are plenty of rich parents who will eagerly pay the sticker price if their children are admitted to brand-name schools.
In the end, though, price tags are meaningless. The best way to know what you will pay is to use a school's net price calculator, which will provide a personalized estimate of a student's cost.
