The College Board recently reported that there are now 57 different private colleges and universities in the U.S. (up from less than 10 schools last year) with a total price tag greater than $50,000.00 per year (tuition/room/board). $50,000.00 plus per year times four--- that’s more than $200,000.00 for one undergraduate degree when you consider tuition increases that are almost a given each year. Even our public university system is no longer the “bargain” that it used to be. Just recently the University of California announced a 33% increase in total fees, making the UC system now one of the most expensive public university systems in the country. With fees, room & board, books, and transportation costs, a UC will cost more than $25,000.00 per year. Add to this the fact that it’s almost impossible to graduate from a UC school without doing at least five, if not six years, and the price tag quickly approaches the cost of some private colleges. Now consider the fact that the vast majority of Webb graduates attend either one of those 57 private colleges or a UC school, add the cost of attending Webb, and you have a total bill as large as some home mortgages.
So, how does a family pay for college? Well, if you are among the fortunate few that have the resources to pay full price for your child to go to any college regardless of cost, you don’t have to worry about it. And, yes, some colleges will be extra nice to “full-pay” families in the admissions process, so count your blessings! If you are among those that earn less than $60,000.00 per year (total family income) you also don’t have to worry too much, because you will likely end up with a very generous need based financial aid package that could make it almost free to attend college. However, if you are among those of us that make a good living but don’t have almost a quarter of a million dollars for each of our children that plan to go to college stashed away in a high yield savings account (do high yield accounts even exist anymore?), we need to have a different plan. Knowing what forms to file and when to file them is important. Researching possible merit scholarships can also make a difference. Applying to colleges with healthy endowments and generous financial aid policies is also helpful. Having a really smart kid with top grades, top scores, and an impressive “resume” to college is even better. Hoping your 99 year old rich uncle kicks the bucket right before the first tuition bill from the college is due – never gonna happen!
“Colleges have millions of dollars to give away…” How many times do we see these headlines in the news, or from the colleges themselves? Yes, it’s true, but read the fine print first. Colleges may give away large amounts of money in forms of scholarships and grants, but most of the time that money is being distributed very carefully in form of either merit awards or need based financial aid. No college just “gives away money” to anyone for no good reason.
So, let’s say your kid is one of the lucky ones that has an impressive record and will likely be considered for special scholarships. These merit awards are based mostly on performance or talent (high grades, high scores, top athlete, gifted artist, etc.) and usually come directly from colleges without having to do anything besides apply for admissions (though there are a few schools that require special application filing dates for merit scholarship consideration as in the case with USC, or a special scholarship application or nomination as is the case with Davidson College). If the college wants your student more than others, they may sweeten the deal by offering merit money along with the admissions letter. Many Webb students get merit awards, and sometimes they are too good to turn down (our first two seniors to be admitted to college this year both received major scholarships to their top choice school making it absolutely free for them for all four years!). Sometimes, however, the merit award comes from the student’s “safety school,” and the family must make the choice to take the offer or pay more for a school that is perhaps more prestigious or selective. What would you do if your son/daughter got admitted to, say, Harvard or Stanford with no financial support of any type from those schools but also got a full four-year merit scholarship from Boston University or George Washington University? All good colleges, but some might say “go to your dream school even if we have to mortgage our home;” while others might “take the money and run!”
Need based financial aid is given out differently. This money is distributed by the colleges based on how much (or how little) a family can personally contribute to the cost of attending college based on the family’s personal financial picture. Family income and assets must be disclosed, many times in great detail. Tax Returns must be sent in, questionnaires filled out, justification for certain expenses explained, etc. The FAFSA (Free Application for Federal Student Aid) must be filed for most colleges, and some private colleges also require the College Board CSS Profile as well. These forms are filed in the senior year by the deadline that each college requests (Profile in December and FAFSA in January usually). These forms ask what feels like an endless stream of questions about the family and student’s assets and income. When your child is admitted to the college, the Financial Aid Office at that college will issue a “financial aid award” if you qualify for need based aid, and it will tell you how much of the tuition and other costs associated with attending that college (Room & Board, books, transportation costs, etc.) might be discounted from the sticker price. For some families, need based aid can be a Godsend and make it possible for their student to attend the college regardless of how expensive the school may be. Many top tier colleges (like the Ivy league & Stanford) only offer need based aid and choose to put all of their scholarship money into that pool instead of awarding merit money. After all, given the high caliber student that gets admitted to these types of schools, all the students would likely qualify for merit money making it financially impossible for these institutions to meet such demands.
Okay, so the hypothetical family survived the college admissions process. Your child got into college, and you are neither rich enough nor poor enough to not have to worry about how to pay for it. You child applies for merit scholarships wherever possible, and you also apply for need based financial aid. Merit aid doesn’t pan out, and the need based aid award isn’t enough. What do you do now? Well, you either hope your child was admitted at another college with a better financial aid award that the family would be happy to accept, or you can call the college that is top choice (but with a lower offer) and speak to a financial aid officer in hopes of explaining your situation. You must show justification as to why you think that college should re-calculate your award and up the offer. Sometimes they do, and sometimes they don’t. It all depends on how much money that college has to give out in financial aid and how compelling your situation really is to them. Word of advice—BE REALLY NICE TO THE FINANCIAL AID OFFICER YOU SPEAK TO NO MATTER WHAT!
Finally, is there any good news when it comes to affording a college education? YES! Even today with our economy in distress and families being stretched financially more and more each year, going to college is still very much a possibility. Most Webb students apply and get admitted to colleges that do have healthy financial pictures (strong endowments, generous financial aid programs, and special financing options to fit most families). Even students in the bottom third of each graduating class get to go to colleges that are highly regarded and pride themselves on the strength of their program (academically, socially, and financially). Webb students don’t usually have to go to colleges that “play games” with their financial aid offers like “gapping” students by offering them less money. Year after year, I am always impressed by how careful and understanding colleges are with Webb families when it comes to financial aid issues. It is rare when a college refuses to consider special circumstances and it is more often that a financial concern can be addressed in favor of the family if it is justified. After all, good colleges want to do everything possible to assure that any student they admit does not turn them down because of affordability issues.
Ultimately, going to college is still a very wise investment, even if you end up having to pay more than you had hoped. Not only is a college degree valuable for future earnings at staggering rates higher than those that choose not to attend college, but I can think of no other investment that will have a return as powerful or as rewarding as a formal education. My mother said to me when I became a parent for the first time, “You can do two things for your child. You can love them unconditionally with all your heart, and you can give them the very best education possible.” It’s what she did for me, and it’s what I’m doing for my children in hopes that they will do the same for theirs.