After posting the article, Tips for Deciphering the Financial Aid Package, I received some additional questions from families. I have responded to many of these questions directly but I like to utilize CheapScholar.org as a venue for some of my responses so that we all have an opportunity to gain something from the question.
The question I received inquired about scholarships that are only in effect for the first year and go away for the subsequent years that a student is attending college. Basically, the student received a $3000 scholarship the freshman year but for whatever reason, the scholarship was not renewed for the sophomore year… This practice can be commonly referred to as an example of Bait and Switch in the world of higher education/financial aid. But, you can easily protect yourself from it.
Has anyone ever experienced Bait & Switch at your local retail stores? Let me give you an example… I remember when I was shopping for laptops a couple of years ago. I had been combing through the advertisements for weeks and I finally figured out what computer I wanted to buy and at what price point I was prepared to pull the trigger and make the purchase. As I was going through the Sunday paper one weekend, I found where a famous electronic retailer published an ad that showed the exact laptop I wanted and at the right price as well. I went to the store prepared to make my purchase only to find that the computer of my dreams was sold out, no rain checks were available, and they didn’t anticipate getting any more in stock. Needless to say, I was bummed. However, the sales associate quickly tried to appease my need for a computer by showing me the “upgrade” version (more features) of the computer I had been seeking. As you can imagine, it also came with an upgrade price.
So, how did Bait and Switch work in this example? Basically, they baited me into the store with their unbelievable sale price for a computer but once I got there and found my computer to be unavailable, they tried to switch my purchasing power to a more expensive model. Fortunately, I wasn’t hard-pressed to walk out of the store with a computer that day so I waited until a comparable deal revealed itself. However, when you are shopping for the right college, you don’t always have the same luxury.
To avoid Bait and Switch at the University and College level, you need to find out as much information as you can about the scholarships you are receiving. Because, you hate to get settled into a wonderful college at a wonderful price and then have someone spring a financial surprise on you in your second year and inform you that things are going to be a little different, in the sense that your great scholarship is no longer available.
The following are some tips to avoid the Financial Aid Bait and Switch:
- Always ask if your scholarship is renewable for all four years.
- If you are going to be there a fifth year, ask if the scholarship is still available for an “extended stay”
- Find out what requirements must be satisfied to maintain your scholarship.
- If it is a GPA requirement, find out what is expected of you and if there is leniency that can be used if you decide to take more challenging courses.
- If it is a service requirement, find out how many hours you have to put in and if those hours are required each year you receive the scholarship.
- Do you need to declare a specific major for the scholarship to be applicable? If you are not sure, ask the financial aid office…
- Do you need to participate in certain activities? (For example, many music scholarship recipients will be required to participate in a specific number of productions or recitals each year)
If the scholarships you are receiving don’t provide this type of information, you will want to get on the phone right away and clarify the qualifications. My actual recommendation would be that you email the school so that you have their response in a paper trail resource that can be referred to later down the road if an issue arises.
Hopefully this information answers our reader’s question and provides some information for our other readers here at CheapScholar.org. If you find that you have a question related to financial aid, paying or saving for college, or just plain college affordability, please don’t hesitate to drop me a line anytime.