Universities Vowing to Take Bidding From Loan Process.

SOME big-name private colleges and universities say they're taking a new tack on student aid.

They're going to judge every incoming student by roughly the same set of financial standards. Families with similar incomes and assets, applying to similar schools, should be offered similar amounts of loans and grants.

That's the way it used to be. But in recent years, these expensive schools have gone in different directions -- applying different yardsticks for student aid. Students might get a much higher offer from School A than from School B.

When families saw this, they took it as a signal to negotiate. If Sally wanted School B, she'd ask it to match the deal offered by School A -- and she often got it.

Money is going to the squeakiest wheel. "Financial aid offices have had to staff up to accommodate the calls from families," say Betsy Hicks, director of financial aid at the Massachusetts Institute of Technology.

I'm talking here only about the high-cost, high-prestige private schools -- those charging $30,000-plus a year. State colleges and universities are much cheaper to attend, especially in your home state.

The private schools don't negotiate against lower prices that state schools charge. But they do negotiate against their high-cost competitors.

Twenty-eight well-known private colleges and universities are establishing voluntary guidelines so their offers of financial aid will look more alike.

They include such schools as Amherst College, Cornell University, Duke University, Georgetown University, Middlebury College, MIT, Northwestern University, Pomona College, Rice University, Stanford University and the University of Notre Dame.

Impact of family finances

These schools base their aid awards on a student's financial need. They analyze the family's finances, calculate how much they should be. able to pay, then create an aid package to cover the rest of the cost.

Financial-aid programs based on need don't give athletic scholarships.

Athletes are judged by the same standards as anyone else.

Nor do they give the "merit" awards that are now so popular at second-tier private colleges.

Merit aid goes to good students whose families make too much money to qualify, for need-based help or who have already received a full award based on financial need. The school gives them a big bonus to encourage them to attend.

For these schools, merit aid is a way of attracting desirable students. For parents who didn't save for college, it's a gift.

But merit awards use scholarship funds that otherwise would go to needier students. That's one of the reasons it's getting harder for families with modest incomes to send their children to private colleges and universities.

The 28 prestigious schools that developed the new student-aid guidelines have themselves been drawn into bidding wars for the students they want.

They don't call it merit aid, because they base all awards on financial need. But need can be interpreted differently. Hence the new agreement. If they all spend less on special students, they hope to have more grant money to spread around.

Under the guidelines, some, students would get less and others more. But don't think that families with extra assets will necessarily have their awards reduced.

The schools plan to stop counting certain assets held by middle-class families. This amounts to a price cut, in disguise.

The details of the new aid plan are still under construction. But parts of it will get a tryout in the 2002 or 2003 college-application season.

Each school will formulate its own plan, but here are some of the principles they're going by:

* For homeowners. They plan to count less of your home equity. Your home will be treated as being worth no more than 2.4 times your income minus your mortgage debt.

* For families who save for college. Currently, the schools count 25 percent of the money saved in a child's name when figuring how much college aid to give. They count only 5 percent of the money held in a parent's name.

In the future, they'll treat both sources of savings as parental assets, including any money invested in tax-deferred college-savings plans.

"Family money is family money," says James Belvin Jr., director of financial aid for Duke. "The family made the effort and shouldn't be penalized if some of it is in a child's name."

Belvin hopes this change will encourage more parents to save for college. The change is going to be expensive for schools, however, so they plan to phase it in over a period of years.

Medicare Mail Order To Help Beneficiaries

A judge just told the administrators of Medicare that they're in "blatant violation" of the law.

Every October, they're required to send beneficiaries, by mail, some basic consumer information about Medicare managed-care in their area, to help them choose.

This year, they arbitrarily decided not to. The new administrators argued that consumers could get the same or better information by telephone and Web.

Judge Henry Kennedy Jr., of the U.S. District Court in Washington, D.C., wasn't' buying. Mail it, he said. Older people and the disabled are supposed to have comparative price and benefit information in their hands.

This year, that's more important than ever. You'll be locked into any managed-care plan you choose for the first six months of 2002. Previously, you could switch at any time if the plan was taking new members.

Medicare argued that it was too late and too expensive to do such a mailing now.

"The court looks dimly on such excuses," Judge Kennedy wrote. "Any timing or budgetary problems" are of the government's "own making."

Ultimately, you'll comparing managed-care plans this year:

* The government's mailing, whenever it comes.

* The 800-633-4227 phone number. You can ask questions about a specific managed plan. The operator is supposed to be able to check the answer on the Web.