One question I ask juniors and seniors all the time is, “Why would you spend your own money on college if they will pay you to come to their school?” After all, this is good financial stewardship, right? Please come to our annual Financial Aid Planning Night here at DC on Tuesday, October 8th, where we will be diving into this topic a bit more.
We all agree that the cost of college is very expensive and is getting more expensive each year. The presence of federal government and private loans has allowed colleges to spike their prices because they know that they can get students to borrow whatever money they need in order to attend their school. So how do parents respond to this mounting pressure to be able to pay for college? They start saving thousands of dollars when their child is young to make sure they provide their child with the opportunity to go to the college that they want to attend. Is this a bad approach? Definitely not. Whether it’s through a 529 plan or a different savings plan, it’s always great to save money for the future expense of college. Obviously, the amount some are able to save compared to others varies but it’s all for the same purpose.
However, what if I told you there were other ways to lower the cost of college that didn’t involve saving money in advance (which is still not a bad thing to do)? Below are a few ways students can pay less for college without spending a lot of your own money.
- Apply to colleges that are good fit schools and where you are competitive for merit based scholarships.
It’s great if a senior applies to a college that they deem to be a good fit in many areas, but if it is going to cost $40,000 a year, is it still a good fit? Some seniors and their parents may say, “yes” if it is a school that is ranked in the top 40 of the US News and World Report. However, if your child was able to get into a college that is ranked in the top 40, there are probably one hundred other really great colleges that they could attend for far less money because they are able to receive a lot of merit based scholarship money (scholarships based on grades and scores). I am not saying that you are making a bad decision to pay a lot more money for a more “prestigious” college however, I would like you to at least consider expanding your options and applying to a few of the very good colleges ranked beyond 40 that may provide a similar experience (or maybe even better) for a lot less money. if a senior has done well in high school, colleges will do what they can to try to get that student to come to their school, and the way they do this is by offering merit based scholarship money. There is a great blog post by Lynn O’Shaughnessy that I would love you to read titled Saying No To a Dream College: A Success Story. I appreciate Lynn’s perspective and share a number of the same ideas. If you are interested, I am happy to email you a list of “hidden gem” colleges that I have put together that are based on colleges I have had students go to, have had great experiences and are doing well after they graduated. Feel free to e-mail me and ask for this list.
2. Expand your options
There are hundreds of great colleges in the United States. I understand that you may want to stay in a certain region of the country, or attend a college with less than 15,000 students, or attend a Christian College, etc., but what I see happen too often is that some settle to know about only a handful of colleges and they don’t put the time in to researching and expanding their list of schools that they at least look into. Do you want advice on how to start? If you like to know what a school is ranked, look at the US News and World Report Ranking, Money Magazine College Rankings, Forbes College Rankings, Niche College Rankings and the Wall Street Journal/Times Higher Education Rankings. Didn’t know there were that many companies that ranked colleges? It is surprising but they each are a little unique in the way they calculate their rankings. You may see similar colleges at or near the top of these rankings but I would encourage you to look at the schools ranked at or near the top of their region or the colleges that are ranked between 50-150 and see of any of these colleges are a good fit. One other piece of advice I give just to get a broader perspective of colleges you may not have considered is to go through Princeton Review’s book of the 385 Best Colleges. This is a great way to know that there aren’t just 50 colleges out there that we can go to and be successful at, there are 385!
3. Go to college farther from home
I am going to refer to a previous post I wrote back in February that I wrote. Please read!
4. Follow the money
Sometimes this is hard and I am not going to say that you should always pursue the cheapest option when it comes to the college you will attend. Nevertheless, you need to get your Return on Investment (ROI) (see previous post on this topic) when it comes to the college you attend. Obviously, the ideal is not to have any debt when you graduate from college but for many, this isn’t possible. The best advice that I know to give in order to make sure that you do not have overwhelming debt is to have the total amount of loans after four years of college be less than what your expected starting salary is. If you have done your research and your homework and applied to a few colleges that are great financial fits as well as good fits in the other areas you are looking for, it would be hard not to attend the college that ends up paying you more to go to their school. I would caution that you not put prestige, promises of future success, reputation or legacy above making sure the college you attend is a great financial fit as well.
