Do Your Grants for College Drop After the First Year?
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April 24, 2018
By: Mason Gallik
Grants are great when paying for college because they don’t have to be paid back! Sometimes, colleges offer overly generous financial aid packages for your first year with large amounts of grants offered. It is absolutely necessary to find out if these grants will be offered again after the first year. Scholarships from colleges often recur each year, but some colleges significantly drop grant aid after your first year because you are already enrolled. This can lead to major financial headaches if it is an expensive private school and you are on the hook for an additional $10,000 each year after the first year.
We looked at data from the 2015-2016 school year to see if colleges actually drop grants to students. We compared average grants for first year students versus non-first year students. On average, there is a $1,308 drop in average grants offered when comparing first year versus 2nd or later year students. This is highlighted by the fact that 84% of the roughly 5,500 colleges that we looked at data from have decreased their aid between the first year and later years. Some colleges significantly drop aid, which is demonstrated by roughly 200 colleges dropping grants offered by over $5,000 between the first and other years.
Additional loans offered can offset some of the dwindling grants offered. Remember that Stafford Subsidized loans max out at $3,500 offered for the first year and then rise to $4,500 in year two and $5,500 in year three. We will talk in a later article about these trends in loans offered to first year and later year students. Loans offered often offset the decreases in grants, but remember you have to pay loans back so it is not ideal!
So what does this all mean? It is important to get in contact with financial aid offices to ensure that grants, especially grants offered directly from the college will recur after the first year. You do not want to be on the hook for unexpected expenses for another 3 years of colleges that can amount to tens of thousands of dollars in additional costs. While some colleges only experience minimal decreases in aid that can be made up for in additional loans offered through the federal government, some private colleges significantly drop aid after the first year. Beware of declining grants!