Finding Colleges That Are Affordable

When it comes to your child’s college list, everyone talks about finding schools that are a great fit. To most people, this means two things: academic and social. Academically, these should be schools that have strong programs in the disciplines your child expects to pursue, places where they will be challenged and successful. Socially, these should be schools where your child will fit in, will be honored for who they are, and will find friends for life.

But there is a third leg of the stool that most people think is too complicated to factor in—financial fit. If they choose wisely, families can literally save tens of thousands of dollars each year in out-of-pocket costs. Here are the answers to a few of the questions you might be asking while your rising senior is building his/her list this summer…

Is the sticker price of a college the price we will have to pay?

No. Eighty-six percent of undergraduates pay less than the sticker price, many significantly less. All colleges provide federal and/or institutional need-based grants. These awards are based strictly on a family’s finances and not on the student’s academic achievement. For families whose earnings and assets are too high to demonstrate need, many colleges also provide non-need grants called merit awards. Millions of students enrolled in college today receive one, the other, or both.

Do all colleges offer similar amounts of need-based aid?

No. The size of these awards differs substantially from one college to the next. About sixty colleges meet 100% of demonstrated need, and several of these have done away with student loans in their financial aid packages and have replaced these with institutional grants. About 100 schools meet at least 90% of demonstrated need. On the other hand, many well-known institutions—household names—meet as little as 70% or less of demonstrated need. This unmet need can easily add tens of thousands of dollars annually to your out-of-pocket costs.

Do all colleges offer merit aid?

No. In fact, many of the most selective schools, like the Ivies, offer no merit aid at all. But many schools nearly as selective are quite generous with merit aid because they want to entice students to apply and enroll. Each year, many of my students are offered $10,000 to as much as $45,000 per year in merit awards from top institutions. And these are four-year awards as long as the student maintains a 3.0 GPA through college.

Does a B student have a shot at receiving merit aid?

Yes, absolutely. Merit money is an enrollment tool, and there are many factors beyond high grades and test scores that could make a student an attractive applicant at a particular college. These can include accomplishments in the performing arts, strong leadership in one or two activities, athletic achievement at D3 schools, demographic diversity, and geographic diversity. Even the fact that you are not applying for need-based aid might be enough to win your child a merit award.

If we think our family is eligible for need-based financial aid, how do we find out how much aid we might receive?

One way to get an early approximation of how much a particular college might cost is to go to that college’s net price calculator located on the institutional website. These calculators vary college to college—some are more accurate than others and they are not binding estimates. Another excellent place to go to get an early read on how much you will is the College Board’s EFC calculator. This will compute your Expected Family Contribution, not what you will actually have to pay, but a good starting point to approximate how much you will actually be expected to pay towards your child’s college education annually.

How does financial fit factor into which schools belong on my child’s college list?

If you’ve learned that your EFC is, say, $30K and your child is applying to schools with price tags of $70K, your demonstrated need at these schools is roughly $40K. This is substantial need, and you should be looking for schools that meet between ninety and one hundred percent of need in their financial aid awards. On the other hand, if you learn that your EFC is $60K or more, you will have little or no demonstrated need at these schools. Instead, you should be looking for schools that are generous with merit aid with average awards of at least $15K going to at least thirty percent of their undergraduates. 

Where can I get this information?

Jennie and I publish two amazing financial aid charts available for free on the Resources page of our website. One is for domestic applicants, the other for international applicants. It has all the great information you need to know which schools are a smart financial choice for your family, and which are not.

College is one of the most expensive purchases a family will ever make. It is the single best investment in your child’s future. It is crucial that you become an informed shopper as your child  assembles the list of colleges he or she will apply to.

Jeff Levy, CEP