Know the College Landscape
When you and your student are beginning to look at colleges, the process may seem straightforward. You find a school you like, apply, get accepted, and write a tuition check.
The reality, however, is much more complicated. Knowing the college landscape and how pricing works might be the easiest and fastest way to save money when paying for college.
Here are ten things I want you to understand before you write that check:
1. Most families do not pay full price.
Consider the sticker price on the school’s website the MSRP, and most families are shopping at a discount store. Tuition breaks are the norm, not the exception. Most families do not pay a school’s published price.
At private schools, over 89% of students receive financial aid, and that percentage is over 50% at public schools.
2. Prices can be different, even within the same college.
There’s a big difference between schools in the amount of aid they offer. But, there can also be a big difference between the amount of aid offered by the programs within a given school.
For example, honors colleges or business programs will sometimes have extra scholarships that they can provide to promising students. Other colleges within the same university might offer less money on average or even have a policy of not providing merit aid at all. Look into the details of the specific program your student is applying to and see if they offer any special aid options.
3. Financial aid is not just for low-income families.
Need-based financial aid is meant to provide assistance to families with exceptional financial need. The federal Pell grant is one particularly well-known example, but there are many more.
In light of today’s astronomical college costs, demonstrated financial need is also relative to the cost of a school, so the more expensive a school is, the more likely even higher income families may have demonstrated need. Plus, other family considerations are taken into account in determining need-based financial awards.
However, it is important to know that many types of aid aren’t linked to financial need at all. This type of aid gets called different things, including merit aid, scholarships, grants, and tuition waivers. These awards can be huge for families of all income levels.
4. Merit aid is not just for straight-A students.
Being a good student is an easier way to land scholarships. No question there.
But, you don’t need to have straight A’s or perfect SAT scores to win a generous scholarship. Merit aid is often given for leadership, community service, sports, artistic talent, and any number of other talents or achievements.
5. Colleges are the biggest source of financial aid.
Many schools provide tuition breaks in the form of merit or gift aid (money that doesn’t need to be paid back) to attract and retain good students. In fact, the schools themselves are now the single biggest source of financial aid, accounting for nearly 50% of student aid.
Believe it or not, many of the more than 3,000 institutions of higher education in the United States are challenged in filling their seats to enroll a full freshman class. To address this, schools often use merit aid to attract and hang on to more students.
6. Research the Percentage of Students Receiving Merit-Based Aid.
A starting point in determining school generosity is to review the percentage of students receiving merit aid. More importantly, consider the percentage of ‘students without need that are receiving merit awards.’
Of course, there are no guarantees, but a school with a high percentage of students receiving merit aid can give you a better chance of getting aid as well. One resource that provides this information is College Transitions. Simply search for a school, click on the details icon, and scroll down the column on the right side of the page.
7. Research the Average Size of Merit Awards.
While it’s good to know that more students are receiving merit aid, having insights on the average size of the merit awards is really helpful, so that you can compare that to the school’s cost of attendance and have a truer sense of what you might be expected to pay.
Schools that are less generous should fall to the bottom of your preferred college list. You can find this information at College Transitions and College Match Point.
8. Consider both less expensive schools and schools that are expensive but generous.
The first part of this advice might seem obvious, but bears repeating: the tuition is not the same at every school. It’s a good idea to consider schools that from the outset you know will be less expensive.
But the second part of the advice is just as important: schools with a higher sticker price don’t always turn out to be the most expensive when the tuition bill actually comes, because they may offer more generous financial aid packages.
9. Embrace the schools that embrace you.
It can be easy to get hung up on just a few high-profile schools. But, popular schools with low admittance rates and high cost of attendance are less likely to offer generous merit aid.
So, if cost is a concern for your family, expand your college list and consider additional options.
The U.S. is lucky enough to have many great colleges and universities, and some of the best programs are at schools that are solid but not wildly famous. Study after study tells us that at the end of the day, it’s how a student uses the resources open to them that matters more than the name on their diploma. Embrace the schools that embrace you. They know things about the school that you don’t know and might see things in you that you don’t even see in yourself.
10. Get help finding the best options.
When we talk about colleges, we’re talking about a pool of over 3,000 different places. This can be overwhelming for anyone and it can be easy for savings options or scholarships to fall through the cracks.
Working with a College Funding Planner means having an experienced professional guiding you through the process and helping you maximize your savings and minimize your tuition bill.