Private colleges and universities across the country are fattening their scholarships at levels never seen before.
In the latest annual discounting tuition survey from the National Association of College and University Business Officers, private colleges are now offering freshmen an average price break of 56.3% off their published tuition rate.
While the published prices of colleges continue to climb so do the offers in the form of merit scholarships and need-based aid.
Even more impressive is how many students secure institutional aid. According to the NACUBO study, 90% of freshmen received some type of award from the private college that they are attending.
While institutional awards are plentiful, affluent families who use the college rankings as their guide often end up aiming for private colleges and universities that give meager merit awards or none at all. Because they just don’t have to.
The high-income parents of a teenager who gets into a school like the University of Chicago, Massachusetts Institute of Technology or Yale are more likely to pay the (exorbitant) full price. For plenty of high-income families, taking this kind of a financial hit for one child, much less multiple ones, will hurt and can jeopardize other goals such as retiring with plenty of assets to enjoy a rewarding retirement.
There are a couple of keys to avoiding this kind of financial body blow during the college years. First parents need to know in advance what the price will likely be at a specific institution and decide before a child applies if they would be okay paying it. If parents wait until a student is accepted to a full-price school, the ability to say no can absolutely plummet. It’s hard to say no to emotional teenagers, who believe their lives are over if they can’t attend their dream school.
One way to zero in on what the net price for a household would be is to use a public or private college or university’s net price calculator. Inputting a family’s financial information and the student’s academic statistics will generate a net price after any need-based aid and institutional merit aid is subtracted from the cost of attendance.
While net price calculators are a valuable tool, too many schools, in particular state universities, have mediocre calculators that often only estimate need-based aid. Some private schools also don’t calculate merit scholarships and, in those instances, the calculator would be meaningless for wealthy families.
Common Data Sets
Another key in the search for schools that offer discounts is for affluent families to get a solid idea of the odds of obtaining merit awards. An excellent tool to help parents answer this question is a document called the Common Data Set.
The Common Data Set is a standardized document that provides a more efficient way for schools to provide higher-ed data to collegiate publishers like US News & World Report and the College Board. The document, which is less than 40 pages, includes information on such topics as freshmen admission statistics, financial aid, merit aid, graduation rates, transfer admissions, academic majors, class size and faculty statistics.
Families interested in securing merit awards should focus on a Common Data Set’s Section H-2, which is the “Financial Aid” section. In this part of the document, you will learn how many freshmen attend the school, as well as the number who received need-based and the number of students who qualified for zero financial aid, but captured an institutional merit award.
What’s equally beneficial in this document is learning what the average need-based aid and merit-aid amounts are. For those needing financial help, parents will want to see what percentage of need the school says it typically meets. Obviously, 100% is ideal, but the vast majority of schools can’t provide that.
Here is an example: Out of 2,111 freshmen who attended Northwestern University, only 14 obtained an institutional merit scholarship. Those awards were worth, on average, less than $21,000. For high-income parents who don’t want to pay $96,000 for one year at this university, that’s bad news.
In contrast, Loyola University, which is located in the same metropolitan area, awarded 863 out of 2,946 freshmen non-need-based scholarships. The average award was roughly $23,000. At this institution, the odds are great that a student will receive either a need-based award or a merit scholarship. Loyola isn’t as highly ranked as Northwestern, so it has to try harder to attract its freshmen class with more price breaks.
Common Data Set Resource
It used to be that looking at Common Data Sets was time-consuming because you had to track down each school’s document. If you just looked for it on an individual school’s website, you were likely to never find it. So Google worked, but you had to start a search for every school. That no longer is necessary.
Thankfully, there is now finally a one-stop resource for checking out Common Data Sets. College Transitionsa highly regarded college consulting firm, has placed links to Common Data Sets of hundreds of colleges in its Common Data Set Depository. The depository is a great tool for ultimately cutting the cost of college.
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