College Financial Aid Myths

Just after writing about the secrets of college admissions, I have a couple of reasons to focus on myths related to college costs and financial aid.

  1. I’m smack dab, as they say, in the middle of completing Mod Squad Pete’s CSS financial aid Profile, and
  2. Monday’s twitter feed served up two lists of myths, both of them listing a big one related to financial aid.

First, a column in the Washington Post by Jenna Johnson, Seven College Admissions Myths, included the following about tuition discounting. There’s a lot of great information in the article, and in this paragraph, but I’m adding italics to emphasize the last sentence.

2. The tuition price listed in brochures is what everyone pays.

Flipping through college guides can be heart-stopping, especially with dozens of private schools now charging more than $50,000 a year for tuition, housing and fees. But that’s just the sticker price. Last year, that rate was reduced by more than 40 percent for the average student through institutional grants and scholarships, according to an industry study. In an effort to make it easier for families to compare pricing, the federal government now requires that colleges and universities put a “net price calculator” on their Web site. Although these estimates are not perfect, they give students a better idea of what they might be asked to pay each year. And everyone should fill out the free application for federal student aid, even if you think you won’t qualify for aid; 1.8 million students who would have qualified for federal financial aid did not apply, the council reported in 2006.

Then, from Unigo, Five Myths About College Today. Again, the money sentence is the last (my italics).

Myth #2:  We can’t afford a private college or university.

Depending on the financial aid package offered, the out-of-pocket cost of attending a private college can often be lower than that of a public university.  In a simplistic example, a $25,000 bill at a UC would be reduced to $20,000 with $5,000 of financial aid, but a private liberal arts college with a sticker price of $50,000 would cost $15,000 if the financial aid package totaled $35,000, making it cheaper than the UC. Of course, financial aid is more complicated than this, but private colleges with strong endowments often offer generous merit and need-based scholarships.  In the end, award offers must be weighed against each other carefully, taking into account whether the award is made up of loans (which must be paid back) or grants/scholarships (which do not get paid back).  The bottom line?  Research the possibility of financial aid before eliminating a college from your list just because it sounds too expensive.

How do we find out whether a college will be too expensive or not?

Here’s one place to look:  EduLaunchPad has developed a ‘generosity rating’, looking at teach college’s pattern of aid over time and identifying which colleges are most generous.

The rising cost of higher education makes for good headlines and gets a lot of attention but it is important to remember that almost no one pays the sticker price for college. At eduLaunchpad.com, we want to avoid sticker shock so we don’t show you prices right away. When you visit our search page, you’ll notice we’ve emphasized each school’s GENEROSITY instead. Identifying colleges and universities which are more generous provides more valuable information to you and is a more effective comparison tool than sticker price.

Here’s another:  Grace, who blogs at Cost of College, has written an excellent post identifying “Some basics on how colleges use financial need in admissions decisions.” The post is well worth reading. Here’s the intro and the categories she explains:

Here are some terms used to describe the ways in which colleges may incorporate student financial need into admissions decisions. This generalized information can serve as an introduction to a topic that comprises many shades of gray and is often confusing to families.

  • NEED-BLIND ADMISSIONS
  • NEED-AWARE, NEED-SENSITIVE, OR RESOURCE-AWARE ADMISSIONS 
  • FULL-NEED SCHOOL
  • GAP STUDENT
  • ADMIT-DENY ADMISSIONS

From CollegeData.com

To find out which colleges use which sort of financial aid policy in admissions, dig into the data in whichever interface you prefer. Since I like CollegeData.com, here’s a link to the admissions info for the University of Virginia, and here is a screen shot of where they provide the answer to that question, “Financial need is not a consideration in the admissions process.”

It’s easy to miss, since the reverse policy is the same sentence without the word “not.” Just one more detail to catch — and a huge one.

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5 Comments

Filed under Paying for College

5 responses to “College Financial Aid Myths

  1. Interesting. I have to admit that it would never have occurred to me that we might qualify for financial aid.

    • Yes, Jen, and there’s another reason to go through the incredibly frustrating process of completing the applications: Many scholarship apps — whether they are merit-based or need-based — require that the student have a completed FAFSA on file. Good thing I’m not stressing about Mod Squad Pete’s common application this week; one stressor at a time!

  2. Pingback: Financial Aid Application Dont Take This Step Lightly | Financial Aid And Student Loans

  3. Pingback: Grading Financial Aid Award Letters | Dr. StrangeCollege or, How I Learned to Stop Worrying and Love the Journey

  4. Pingback: How to look at the cost of college… in Virginia and 49 other states. | Dr. StrangeCollege or, How I Learned to Stop Worrying and Love the Journey

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