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

"Schools will stuff more loans into the package as a rule because the federal direct loan (limit) goes up each year," said Lynn O'Shaughnessy, author of "The College Solution," and a college consultant. "Also, schools don't increase merit awards as their prices go up each year."

The drop in grant aid is particularly steep at private schools. Returning students at private, nonprofit colleges in 2012-13 averaged $2,842 less in grant aid than first-year students, according to The Chronicle of Higher Education, which used IPED data. The average drop-off was less severe for returning students at public colleges: $815.

Overall, the average net price for returning students - what families actually pay after grants and scholarships are deducted - is $1,400 higher than for first-year students, according to Kantrowitz's analysis of National Postsecondary Student Aid Study numbers.

Colleges also do not advertise that they practice front-loading, which cannot be detected by using the net price calculators embedded into college websites. The calculators estimate only the first year's cost of college after expected grants and scholarships are deducted.

Loans are not considered by the calculators since they increase rather than decrease the cost of education.

Only a handful of colleges offer four-year commitments to prospective students that their financial aid won't drop, Draeger said.

Northeastern University is one of them. The Boston institution not only promises grant and scholarship aid won't drop, but that this free aid will increase at the same rate that tuition increases.

The university's grant aid appears to fall when freshmen are compared to undergraduates overall, but school officials say that is because the school follows a cooperative education model that starts in the sophomore year, alternating classroom studies with six months of full-time work in career-related jobs.

Although guarantees are not common, Draeger said colleges have an ethical obligation to be clear in their financial aid offers which grants are renewable and under what circumstances.

When financial aid offers do not provide this information, families need to ask questions, said Martha Savery, Massachusetts Education Financing Authority and a former financial aid director for Harvard Graduate School of Education.

"Families need to ask, 'If all things remain the same, can I expect the same type of aid (in subsequent years,)'"? Savery said. "Being a good, educated consumer is part of the process."