Scholarships - Where does turned down money go?

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DaftAndDirect
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Scholarships - Where does turned down money go?

Postby DaftAndDirect » Mon Jan 23, 2012 9:51 am

I looked around in the fin aid forum for a bit and couldn't find a thread addressing this topic specifically but I'm curious to know:

What happens to the scholarship money that is offered but then subsequently turned down by a candidate presumably in order to attend a higher ranked school?

For example, does the turned down cash go back in to a school's scholly budget for this cycle, or do schools typically set aside the cash for the following admissions year?

I am curious to know because if the former is true, there would be some value in timing a well written negotiation note when most candidates have already made their final decisions (i.e., withdrawn from the lower ranked schools).

I imagine it changes from school to school and policy to policy, but interested to see if anyone has insight.

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Entchen
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Re: Scholarships - Where does turned down money go?

Postby Entchen » Mon Jan 23, 2012 9:53 am

DaftAndDirect wrote:I looked around in the fin aid forum for a bit and couldn't find a thread addressing this topic specifically but I'm curious to know:

What happens to the scholarship money that is offered but then subsequently turned down by a candidate presumably in order to attend a higher ranked school?

For example, does the turned down cash go back in to a school's scholly budget for this cycle, or do schools typically set aside the cash for the following admissions year?

I am curious to know because if the former is true, there would be some value in timing a well written negotiation note when most candidates have already made their final decisions (i.e., withdrawn from the lower ranked schools).

I imagine it changes from school to school and policy to policy, but interested to see if anyone has insight.


I suspect they give away offers for much more than they actually have, knowing a certain percentage will turn them down.

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observationalist
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Re: Scholarships - Where does turned down money go?

Postby observationalist » Mon Jan 23, 2012 10:40 am

Think of scholarships as normal discounts off the sticker price, except they're framed as merit awards so that you value them higher than if they were just labeled as "15% off." Like a car salesman, the school advertises a $150,000 law degree but they'll still turn a profit so long as on average they're selling each seat for 15% off, or $128,000. Schools are trying to sell anywhere between 100 and 550 seats each. They're hoping to sell as many at sticker as they can, but that's difficult as the brand name of the school goes down. Given that tuition at most schools is much higher than the value they can possibly give back to their students, schools are prepared to offer as many discounts as they can afford. The scholarship pool is actually built into the sticker price, meaning that applicants who agree to pay full tuition are effectively subsidizing their future classmates who receive scholarships. This is unfortunate, considering on average scholarship recipients (who have higher LSAT/gpa combos) stand a better shot at performing well in law school and securing full-time, permanent legal work after graduation. What this means is that if 50% of a graduating class found full-time legal work from a particular law school, your chances as a scholarship recipient may be a little higher than 50% while your chances at full tuition are worse.

In answer to your question, if one person turns down a discount they'll turn around and offer the same discount to someone else. I expect many schools are going to struggle to fill their seats and still maintain LSAT/gpas unless they have the means to offer more and deeper discounts this year. I wouldn't call it a buyer's market yet, but people should do everything they can to negotiate scholarship funds and try to land up at a school that's offering decent job prospects and won't put you into six figures of debt. In this market anyone who is still willing to pay sticker price needs to seriously consider why they're willing to subsidize better-performing applicants. G'luck.

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sunynp
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Re: Scholarships - Where does turned down money go?

Postby sunynp » Mon Jan 23, 2012 10:57 am

This is an excellent question. As merit scholarships come out of the tuition of the people who are paying the full ride, it isn't clear what happens to the money that isn't used. Merit scholarships are paid for by other students in your class, it isn't the same as a donated or named funded scholarship. I know the named scholarships can only be used for that purpose, but I think that any money left over from merit scholarships can be used for any purpose.

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DaftAndDirect
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Re: Scholarships - Where does turned down money go?

Postby DaftAndDirect » Mon Jan 23, 2012 2:37 pm

observationalist wrote:Think of scholarships as normal discounts off the sticker price, except they're framed as merit awards so that you value them higher than if they were just labeled as "15% off." Like a car salesman, the school advertises a $150,000 law degree but they'll still turn a profit so long as on average they're selling each seat for 15% off, or $128,000. Schools are trying to sell anywhere between 100 and 550 seats each. They're hoping to sell as many at sticker as they can, but that's difficult as the brand name of the school goes down. Given that tuition at most schools is much higher than the value they can possibly give back to their students, schools are prepared to offer as many discounts as they can afford. The scholarship pool is actually built into the sticker price, meaning that applicants who agree to pay full tuition are effectively subsidizing their future classmates who receive scholarships. This is unfortunate, considering on average scholarship recipients (who have higher LSAT/gpa combos) stand a better shot at performing well in law school and securing full-time, permanent legal work after graduation. What this means is that if 50% of a graduating class found full-time legal work from a particular law school, your chances as a scholarship recipient may be a little higher than 50% while your chances at full tuition are worse.

In answer to your question, if one person turns down a discount they'll turn around and offer the same discount to someone else. I expect many schools are going to struggle to fill their seats and still maintain LSAT/gpas unless they have the means to offer more and deeper discounts this year. I wouldn't call it a buyer's market yet, but people should do everything they can to negotiate scholarship funds and try to land up at a school that's offering decent job prospects and won't put you into six figures of debt. In this market anyone who is still willing to pay sticker price needs to seriously consider why they're willing to subsidize better-performing applicants. G'luck.


Thanks for the detailed response observationalist. I think you're absolutely correct when you say it's better to view scholarship money as a discount on the amount by which you're subsidizing applicants with better numbers rather than a merit based award. The latter obviously gives more warm fuzzies.

If what you say in your second paragraph is dead-on balls accurate, then timing a negotiation letter to coincide with the wave of withdrawals by students who will be attending higher ranked schools than my target may actually be worthwhile. How worthwhile I think will be dependent on the size of the variance between the expected and actual acceptance rates of scholarship recipients. Hopefully you're right about schools finding it harder to fill seats this year.

Thanks again. Delighted to have one of the LST guys respond to my post.

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observationalist
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Re: Scholarships - Where does turned down money go?

Postby observationalist » Tue Jan 24, 2012 9:13 am

Good luck! We like seeing applicants think of themselves as consumers who can negotiate the terms by which they're going to take on significant amounts of non-dischargeable debt. The more of you who take that approach, the more likely schools will start thinking about how to provide you a return on all that money you're going to give them. Once the excitement about getting accepted somewhere wears off it's time to start thinking of how to minimize your future debt while still ending up at a school whose graduate outcomes indicate a level of risk you're comfortable with. FWIW I think the idea of timing requests, to the extent you're lucky enough to pin down when those events are happening, is a great idea. g'luck, and thanks.

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J-e-L-L-o
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Re: Scholarships - Where does turned down money go?

Postby J-e-L-L-o » Sun Jan 29, 2012 3:10 am

DaftAndDirect wrote:
observationalist wrote:dead-on balls accurate


My Cousin Vinny...Love that movie!




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