If you're following along, you've read my posts about determining your affordability and what your EFC tells you. You have a good idea about how much you can afford to pay for your child's education, and you understand what the government thinks you can pay.
So what do you do now?
Now the hard part comes in starting to help your child come up with a list of schools. I'm a big fan of the book Right College, Right Price by Frank Palmasani. In it, he separates schools out into categories based on selectivity, size, and public v. private. I was really excited that these categories would have clear delineations about how much financial aid they offer. And they do, kind of. But there was no clear winner, that's for sure. More on that later.
The first thing you need to understand is that schools have two different types of money they can give you - need-based financial aid, and non-need based money (sometimes called merit aid, tuition discounts, or scholarships). For need-based aid, you must show financial need. Your EFC must be below the school's cost of attendance (COA). For the other types of money, there isn't a hard and fast rule on how you qualify - sometimes it's grades/test scores, sometimes it's a special talent, a special student quality, and sometimes it's the fact that you can pay a significant amount out of pocket.
In order to estimate what a particular school might give you in need-based or other money, every school is required to have a Net Price Calculator on their website. Some schools' calculators are better than others. Typcially the more information they ask for, the better estimate they give you. If they don't ask about grades or test scores, they won't be able to give you an estimate of merit aid. Some of these calculators are just plain crappy. I've seen ones that are still using 2014 numbers in their current version.
I'm going to throw out some broad categories of schools, and rules of thumb about their financial aid. To start getting an idea of what you might qualify for, check out the net price calculators for different categories and see how widely the net prices you get are, based on your financial situation.
Highly Selective Schools - These are the ones everyone knows. The Ivies. Schools like Northwestern or University of Chicago if you live in Chicago. They admit a very small percentage of students that apply. This means they don't NEED to give out aid to convince kids to attend. The difference comes in with need-based aid. If you show financial need (and you get admitted), many of these schools will cover 100% of it. They have large endowments, and they want to diversify their student bodies.
Large State Flagship Schools (either in or out of state) - These are also typically well known. They also get a ton of applications and can be very selective - hello, University of Michigan. Some give preference in aid to residents of their state. They are more likely to offer loans as a part of financial aid they do offer, and don't offer much in merit aid unless the student is truly outstanding. Out-of-state tuition to one of these can cost as much or more as a highly selective school. And the aid to attend just isn't there.
Non-Flagship State Schools (either in or out of state) - They are typically less expensive than the flagship schools, and may be less selective. However, that doesn't mean they give more aid. All public schools are getting squeezed by shrinking state budgets, and that includes financial aid. It's worth checking out a few net price calculators for these institutions in your state, but my guess is the out-of-state ones won't be very generous. That being said, there are some that are lowering tuition to attract out of staters.
Mid-Sized Private Schools - There aren't very many of these, but if you're looking for more aid, less selectivity, and larger student bodies, you might check out a few of them. From what I've seen, the net prices of these schools are all over the board. It all depends on who the school is trying to attract.
Smaller Private Schools - There are a large number of these schools, and although they are private, don't assume they aren't affordable. These are the institutions that can give out great financial aid packages that cover 100% of financial need. They can also have significant merit scholarships meant to attract the kinds of solid students they want. They offer a wide range of settings, programs, and social situations. For the student with some financial need, solid credentials, and a willingness to think outside the box, these schools can be very affordable.
So back to my test case. I made up a fictional student with a GPA of 3.8 and an ACT of 32. The family had an income of $175,000 and assets of $100,000. I ran this student through the NPC of 9 different schools, and tried to keep the test consistent even though the schools asked for various other data points. The results are below (all figures are before loans are taken into account):
Highly Selective - Northwestern University
- COA - $70, 496
- Estimated Net Price - $51,846
Flagship State Resident - University of Illinois
- COA - $35,710
- Estimated Net Price - $35,710
Flagship State Non-Resident - Indiana University
- COA - $48,666
- Estimated Net Price - $48,666
Non-Flagship State Resident - Northern Illinois University
- COA - $28,354
- Estimated Net Price - $24,354
Non-Flagship State Non-Resident - Kansas State University
- COA - $34,662
- Estimated Net Price - $30,362
Mid-Size Private - DePaul University
- COA - $54,481
- Estimated Net Price - $36,481 - $44,481
Small Private - DePauw University, Drake University, Beloit College
- COA - ranged from $48,000 - $58,000
- Estimated Net Price - ranged from $32,000 - $38,000
What These Results Told Me
- There are a wide range of net prices out there depending on the institution you choose.
- The lowest net price was around $24,000, so saving for college and being able to pay out of pocket is important. Loans are important too. But if you can't figure out a way to pay Northwestern $52k, it might not make sense to apply there. It's a lot easier to figure out how to pay $24k than $52k.
- Room and board can make a big difference. If you can live at home, it might make an unaffordable college affordable.
- If you're in a situation where you have high income and won't qualify for need-based aid, you are going to have to work harder to find a school that will offer other types of aid.