• Dr. Relax

Financial Decisions: You v. Colleges


When it comes to money, most families are concerned about paying for colleges. So do colleges. While we seldom look into how a college keeps itself running, its approaches are directly affecting admission decisions and financial packages.


Colleges

Admission officers are not the only ones that can determine whom to keep or let go. After the initial decisions are made, enrollment officers will come on the scene. Every final decision is the result of the fight between meeting the institutional need and maintaining the school’s ranking/image. Operating an institute like a 4-year college is expensive, so the more the student can pay, the less the school is responsible for. But meanwhile, regardless of the financial ability, admission officers care about those who are high-achieving. Moreover, with social mobility being one of the ranking criteria, colleges have to consider admitting a certain number of students from underprivileged backgrounds.

A small number of schools can ignore students’ abilities to pay and make decisions based solely on other factors, which is known as need-blind admission. On the other hand, schools that take financial standing into consideration are need-aware. However, does it mean those who demonstrate intensive need should focus on need-blind schools, and students from wealthy families have high-chance of acceptance at need-aware schools?

Not really. A need-blind school is not necessarily committed to meeting the full financial need of students. In other words, it’s possible that one can get into the college but receive a poorly structured financial package. Actually, this is a common strategy adopted by many college enrollment managers. Nevertheless, many high-profile need-aware colleges are using their best practice to assist qualified students in paying for college. Therefore, being need-blind or need-aware is independent of a college’s desire to fulfill students’ financial needs. Whether a student is from a low-income or upper-middle income family, it’s recommended to apply to a range of schools so that one doesn’t rule out any chance, both academically and financially.



You

While every individual financial package is built differently, it’s essential for students and parents to understand its components and how these together may help achieve affordability.

Financial aid can take on various forms. The common elements include:

  • Grant and scholarship aka “free money.” There are need-based grant and sometimes, merit-based scholarships depending on how badly the college wants a student.

  • Self-aid.

  1. Loans. There are many different types of loans available to both students and parents: Parent Loan for Undergraduate Students (PLUS), subsidized loan—no interest until graduation, unsubsidized loan—interest added, Perkins Loan—distribution determined by the school, and even private student loans.

  • Work-study. Funds are provided to part-time, usually on-campus, employment when students are still in school. Once the student earns all the funds awarded, the work-study terminates.

As most of these items are need-based, students must apply through standardized applications:

  • FAFSA. It’s provided by the federal government and used by ALL schools. It’s recommended that all students should apply, regardless of family income. The main goal of this application is to determine aid eligibility by the federal and state.

  • CSS profile. It’s part of the College Board site and used by more than 200 schools, mostly private. Only students applying to the specific schools need to complete this application. The purpose of this profile is to determine the additional non-federal aid.

Besides the need offered by the government and school, students are encouraged to seek additional scholarships. There are numerous independent scholarships out there. Some of them are available to specific schools, and some of them are for particular areas of study. It’s worth a good amount of research.


Final Thoughts

As much as we care about the admission results, we would like to see students be able to go to their favorite colleges. Like college-readiness, students and families should become aware and begin the preparation at an early stage. Some tips for our future college kids:

  • Get a part-time job while in high school to have a taste of work-study.

  • Research the financial options at the schools you like.

  • Be cautious about the scholarship scam.

  • NEVER miss the FAFSA/CSS deadline!



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