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Want an affordable college? Shop like you are buying a car!

Updated: Apr 21

True story:

A few years ago, a parent casually said to me, “I am taking my son to visit Wake Forest this weekend.” As a college admissions consultant, it was not a school I put on his son’s college list. I cautioned the parent that Wake Forest would cost $75,000 a year for his family. He explained a neighbor’s son was going for basically “free,” and I confirmed that high-need students could attend schools like Wake for free or at a reduced rate.

According to Visual Capitalist, college tuition and fees have risen by 1,200% since the 1980s. Unfortunately, the system by which colleges award financial aid is complex and difficult to understand. Comparing financial aid information with friends can cost you time and money.


How can a family control college costs?

If you want to control college costs, you should start with the college list and understand that different colleges offer different types and amounts of aid for different types of applicants and families.

Like buying a car, you want to ensure your student is applying to colleges your family can afford. Most families don’t test drive a Lamborghini unless they have the budget for one. Sometimes, students will fall in love with a Lamborghini school without knowing it.

Example: A high-income family at a school that only offers need-based aid.

Where does the "free money" come from?

The majority of gift aid (free money) is awarded from the institution a student attends. The plan to later chase outside scholarships or take out significant student loans does not make up for this. Most students are limited to borrowing only $5,500 in federal student loans during the first year of college. Additional non-federal student loans will likely require a co-signer. Parents can take out loans but should never leverage retirement for a child’s education. If parents have to take out a loan for year one, the school might not be affordable for the family in the long term.

How does a student qualify for need-based money?

The federal government uses the Free Application for Federal Student Aid (FAFSA) to determine need-based aid eligibility. Filing the FAFSA gives the family a Student Aid Index (SAI), which is used to determine need. However, institutions generous with need-based aid also often require the FAFSA and an additional CSS Profile form. Filing the CSS Profile results in an institutional Expected Family Contribution (EFC).

Note: CSS Profile schools decide how they calculate your institutional EFC, and unlike a FAFSA SAI, it is not standardized. One school may factor in home equity, and another may not. Some schools have student contribution requirements or may package loans in the aid award. A few well-endowed schools don't package loans.

ACC TIP: Most of my ACC families do NOT qualify for federal need-based grant aid

under the FAFSA (Federal Methodology)

because they earn more than the national average family income.

How can a family research their SAI/EFC?

I recommend all families run SAI and EFC estimators for data points in their planning.

Most families are shocked by how high their SAI/EFCs are. The key to remember is that need-based aid is meant for the neediest of families, and SAI/EFCs indicate wealth, not debt or willingness to pay. The federal government and institutions expect most families will need to use their current income, savings, and future income to pay for college.

It is also important to run a Net Price Calculator (NPC) at every school on the student’s list and understand that it is just the first data point. Some NPCs are old and inaccurate; the more questions the NPC asks, the more likely the accuracy. Remember, it is just a starting point; you will want to do more research and add a 5% cost increase annually to be safe.

ACC Tip: Students can chase prestige (brand) or merit but typically not both.

Families should know that non-need-based aid (merit aid) is rarely given at the most prestigious colleges. Specifically, Ivy League schools do not offer merit-based aid.

Every school determines its priorities in awarding its limited dollars to meet institutional needs. With time, priorities can shift. Over the years, Davidson College has moved to a meet-needs school, and Tulane is moving from awarding a lot of merit to awarding more need-based aid. Currently, both the University of South Carolina and the University of Alabama award significant automatic merit aid to students at the top of the applicant pool.

Families need to determine early in the process what their family can afford and, if needed, the type of aid they are eligible to receive. Need? Merit? Combo? Parents should recognize that different types of schools cater to different kinds of students and their financial needs.

ACC Tip: The best scholarship is typically in-state tuition.

In researching colleges, it is helpful to understand how a school has historically awarded need-based and merit aid while knowing it can change. Be aware that some schools don't give much need or merit add. Others may displace need aid with merit aid. So, if a student is awarded merit aid, a school might reduce need-based aid. In some cases, I have seen a student be expected to pay more when a merit scholarship was added to the financial aid packet. The key is for families to ask if the school "stacks" scholarships on top of need-based aid and appeal if there is an issue.

Below is a general framework to help classify the types of schools out there.


Types of Schools:

  • Meet-Need Schools: Generally, elite/competitive schools with large endowments committed to serving the underserved. CSS Profile is usually required. Some meet 100% of the demonstrated need. Many will offer little to no merit aid. Examples include:

    • Ivy League, NESCAC & very selective (Duke, Wake Forest, Georgetown, UVA, UNC-Chapel Hill)

    • Note:

      • May meet 100% of demonstrated of need only below a specific poverty line.

      • May offer limited uber-competitive scholarships.

      • May add loans and work-study to the package and call it aid.

  • Automatic Merit Schools: These schools use their limited institutional dollars to recruit students with strong GPA/test scores to increase rankings and meet institutional priorities. They tend to use a grid/metric methodology with GPA and test scores and typically do not meet the need (gap). Examples include:

    • University of South Carolina, Alabama, Auburn

    • U of Arizona (only need to meet GPA requirement); honors college students can access additional merit.

  • Combo Merit/Need Schools: Schools that award some merit aid and meet some financial need with limited institutional dollars but will gap need. Examples include:

    • Elon, Furman, Wofford, Meredith, Rhodes, Dickinson

  • Merit or Talent Scholarship Schools: Schools that gap need but offer students the opportunity to compete for some merit money. These are typically public schools but can be private. (University of Tampa)

    • Some have full-ride scholarships, but they are very competitive. (NCSU Park, ECU Scholars, Charlotte Levine)

    • Some disperse a small amount of merit to some students, often to top students. (UNC Wilmington, Appalachian State)

    • Some award talent scholarships or scholarships for community service. (Pace University/St Olaf)

    • Some take part in the Bonner Scholarship Program for students with need.

  • Discount Schools: Some schools will mark up their prices and offer most students a discount in the form of a scholarship similar to a coupon.

    • Any school where most students receive “merit aid” is really a discount. (Guilford College)

    • Midwest public schools that need students will tend to discount. (Iowa)

  • These schools will often add more money to the offer if asked.

Full Implementation of the NEW FAFSA

The class of 2024 is the first class using the new "Better" FAFSA. One of the most significant changes is that families with multiple students in school do not have a reduced Federal SAI. Also, family-owned businesses of 100 or fewer employees are no longer exempt from the SAI calculation. The CSS Profile continues to factor in multiple siblings in college and has always considered family businesses.

Bottom Line: Research before you visit!

Before you take your student on visits, research to determine if you are heading to the right “car” lot. For additional information, check out Resources — BigJ Educational Consulting.

Don’t be afraid to ask colleges how they award aid and verify it through a resource like College Navigator or the school’s Common Data Set. Assume nothing, and don’t let anecdotal information influence your search.

Final ACC Tip: It is key to remember that college is a consumer purchase, and we don’t buy a car or home without understanding the cost. So, buyers beware and remember that knowledge is power!

Best of luck shopping! Enjoy the test drives!

Sources: IECA, Subcommittee for College Affordability Resource provided by Cyndy McDonald (Guided Path Data) at IECA Nov 21 Conference, College Websites & Data from College Planner Pro, BigJ Educational Consulting.

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