College Freshmen Need To Beware Of Bait-And-Switch Aid Offers

Families receiving college financial aid offers this spring should beware: what they see this year may not be what they get next year.

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.