Updated: 09/24/2013 11:44 AM
Created: 09/23/2013 7:24 PM KSTP.com
By: Stephen Tellier
As college tuition continues to climb, more and more Minnesota students and their parents are relying on grants, scholarships, and loans to fund their four-year degrees.
But the face of financial aid is changing, and it could be pricing some families right out of higher education.
5 EYEWITNESS NEWS spent months digging into this issue to try to give families the information and tools they need to navigate the new landscape.
Our research shows it's partly because many colleges and universities are changing the way they award financial aid, using millions of dollars to attract the best and brightest students.
That may be leaving less money for those who need it most.
Heather Waulk is giddy. "I was really early to all of my classes the first day, but it was really cool to just realize that I'm on my own now," she said.
It's her first Monday as a college student on her dream college campus, Hamline University.
"It's just a really surreal feeling," Waulk said.
Four years of hard work lay ahead. But she has perhaps already cleared her highest hurdle -- simply getting here.
"Low-income families like myself -- we don't have the same opportunities as everybody else to go to whatever college we want to," Waulk said.
We first met Heather in July, at a session run by College Possible, the Twin Cities nonprofit helping her, and hundreds like her, find ways to finance a college degree. The room was full of soon-to-be college students from low-income families, crafting budgets, right down to the dime, to pay their own way.
Each has overcome obstacles most kids never face.
"My dad passed away my freshman year when I was here at high school," Waulk said.
Heather is a first-generation college student from a single-parent household. She wanted to attend a private university in the worst way. Then, she looked at the numbers.
"It was frightening because I knew I wouldn't be able to afford it on my own," Waulk said.
5 EYEWITNESS NEWS wanted to find out why it's getting harder for students like Heather to pay for college.
The New America Foundation, a nonprofit, nonpartisan think tank, released a report in May, which showed in the mid-1990's, 24 percent of students at private colleges received merit aid, while 43 percent received need-based aid. Twelve years later, the aid equation had flipped. More students now receive merit aid (44 percent) than need-based aid (42 percent).
It was the same story at public colleges, where the number of students receiving merit aid more than doubled, from 8 to 18 percent, surpassing the number who received need-based aid.
The Foundation called the shift "affirmative action for the wealthy," leaving low-income students behind.
"Although we may try our hardest, sometimes financially, it just isn't a possibility," Waulk said.
5 EYEWITNESS NEWS distilled the data for Minnesota's schools, analyzing "net prices" for low-income families -- that's the price actually paid by households making less than $30,000 a year, after grants, scholarships, and other forms of aid are taken into account.
Most of the state's public universities cost less than $10,000 a year for such families. The cheapest private colleges clocked in a bit above the $10,000 mark. But about half of Minnesota's colleges -- all private -- had net prices above $15,000 a year. That's more than half a low-income family's annual income.
The University of St. Thomas topped the list at more than $22,000.
"I think we'd all like to see everyone have the opportunity to go to college without having to worry about paying for it," said Kris Roach, the Director of Undergraduate Admissions and Financial Aid at St. Thomas.
She said that net price is daunting, but doable.
"It's far more complicated than just looking at one number," Roach said.
Roach said living at home and finding savings on books cuts that $22,000 in half. She also touts St. Thomas' "need-blind" admissions policy, meaning families are awarded merit aid before the university even looks at a family's ability to pay.
"For some of these students, essentially, the merit aid takes the place of the need-based aid because I've already awarded it," Roach said.
Roach estimated St. Thomas's aid budget is 60 percent merit, 40 percent need.
"The reality is colleges have limited financial aid budgets, and they have to make very difficult decisions about where those dollars go," Roach said.
"I think fewer schools today are able to say, to make the claim, that they meet a family's demonstrated financial need, and I think that's a loss to these families and to higher education as a whole," said Michael Kyle, the Vice President for Enrollment and College Relations at St. Olaf College, which occupies the other end of the spectrum.
The New America Foundation highlighted the school's remarkably low net price for low-income families for a private college -- about $8,400 at the time of the report. It has since jumped about $5,000 -- still the third-lowest for a private institution in Minnesota.
"St. Olaf College is committed to meeting the demonstrated financial need of every student who's admitted," Kyle said.
Kyle said that commitment means St. Olaf's aid budget is nearly 90 percent need-based.
"We would like to be out of the merit scholarship business if we could, but we're not certain right now that the market would support that," Kyle said. "Any dollar that you're giving to someone who would not necessarily qualify for need-based financial aid is taking away from the overall commitment to demonstrated financial need."
And for students like Heather, every dollar counts.
"I just can't believe that I actually made it here because it's been a struggle to get here," Waulk said.
St. Thomas officials told us they've literally had parents come in and say, "Show me the money." There's a mentality that high school students who excel should be rewarded handsomely for their hard work. Some of that reward money is money that used to help middle and low-income families afford college.
But more merit aid means hard work in high school could chop thousands off your bill for college. Experts also urge students to apply for as many scholarships as you can -- hundreds of millions of dollars are up for grabs each year.
Every financial aid official we spoke with told us families simply need to seek them out. Their advice is free, so don't just assume you can't afford a certain school. Call the financial aid office, or meet with officials face to face.