A Quick Look at College Finances and Financial Aid
by WILL DIX
All too often, families beginning the college search process automatically rule out many colleges based strictly on the published “comprehensive fee,” the total including tuition, room and board, and estimated charges for books, fees, and other common elements. However, it’s a real mistake to base the college search strictly on those figures. It’s better, especially in the early stages of the search, to focus on colleges’ characteristics and other elements that match a student’s needs and goals, while also considering what the student has to offer the colleges.
With many colleges now breaking the $50,000.00 per year barrier, it’s understandable that parents would balk. Very few families can afford to pay that amount in full, and it’s daunting to contemplate having to do so. But that number is only a beginning; families should consider it flexible and proceed accordingly, since colleges have many ways to make themselves affordable.
Financial aid, of course, is the major element involved. It is effectively a “discount” on the comprehensive fee, and can range from a few thousand dollars to the full charge. By completing the Free Application for Federal Student Aid (FAFSA) and, in some cases, the College Scholarship Service Profile (CSS Profile), families share information that enables colleges to make a reasonable attempt at matching their need to the costs involved.
This system isn’t foolproof, but it takes into account many circumstances not immediately apparent when researching colleges. For example, consideration is given to overall family income; the number of other children in the home or in college; custody arrangements (if necessary); illness or disruption of income; other financial obligations; and many other elements that may affect a family’s ability to pay the fee. (However, don’t confuse “financial need” with “financial want:” If you’ve just bought a speedboat, don’t expect your payments there to affect a college’s financial aid package!)
Over and above basic financial aid packages of grants and loans, colleges have a good deal of discretion in granting scholarships, the free money awarded for any number of reasons, most often based on merit. If students create their lists well, it’s possible to put themselves in line for awards for high academic achievement, talent in some desired area, or for simply being from a background or area of the country not often seen at the institution. Generally these awards aren’t labeled as such; they are given generalized names like the “Presidential Scholar Award,” or possibly not even named at all, simply appearing as a line item in the award letter.
Schools trying to raise their academic profiles have a great incentive to offer high-achieving students very favorable financial packages, in effect “bidding” for their attendance. Institutions with highly competitive admissions do not. In creating college lists, students should think about what they have to offer a prospective college as well as what the college has to offer them. In that way, they can find a selection of colleges that fit their criteria but also put themselves in a favorable position for financial aid and scholarships.
Many people don’t realize that expensive private colleges and universities can often cost less than an applicant’s state institution because they have more financial aid dollars at their disposal and can distribute them more freely. Families considering a state institution’s relatively inexpensive full cost may be surprised to learn that they are eligible for private college financial aid that makes it equal or even less expensive than the state school.