August 18, 2014
How do you know if a particular college is likely to offer you a discount on their tuition price? Before you even apply, you can get an estimate by running your specific profile data through a Net Price Calculator (NPC), a tool that can be found on every college’s website.
Forbes ran a Net Price Calculation for five schools using several hypothetical scenarios. The results show discount rates (financial aid) that would be awarded given specified parameters.
… two types of students, one from a family with an annual income of $300,000 and another from a single-earner family making a mere $12,000 a year. We tested two different academic scenarios: a supersmart kid scoring 1540 on his SAT, with a 4.0 GPA and in the top 10% of his class, and a “B” student scoring 1250 on the SAT, with a GPA of 3.0 and in the top 50% of her graduating class.
The biggest surprise is that RPI gives more financial aid to English majors than to engineering students.
As you can see all the top institutions except well-endowed Amherst offer discounts or “merit” aid. Only Rensselaer Polytechnic Institute (RPI) differentiates its aid on its calculator by the student’s intended major as well as by income and ability. RPI clearly wants more poets and is willing to pay for them. President Nixon’s alma mater, Whittier College in southern California, clearly isn’t eager to attract lower-income students. In our test it offered an additional grant of only $1,334 to the low-income overachiever. Even after its ample discount, the needy student’s family still has to come up with half the cost of attendance.
This illustration is a reminder that a Net Price Calculator can help guide your college search.
Lucie Lapovsky, “What’s Your Tuition Discount?”, Forbes, 7/30/2014.
August 14, 2014
Julie at the Family CEO has some wise words of advice for parents who are shopping for a college freshman going away to school.
1. Err on the side of less. Let them live at school for a while and figure out what they need.
2. Bed, Bath & Beyond coupons. Save them all (they accept expired coupons) and let the cashier help you figure out the best ones to use.
I wholeheartedly agree, based on my limited experience sending one child away to dorm life.
We went shopping at the crowded Bed, Bath, & Beyond store closest to my son’s campus the day before he moved into his dorm room for the first time. Among the other shoppers, I found I could tell which families had daughters and which ones had sons even before I saw the students who were accompanying their parents. A shopping cart overflowing with color-coordinated supplies invariably belonged to a girl, while the boys’ carts held fewer items with seemingly little color coordination.
Here’s Julie’s exchange with her son:
Reason #458 why boys are different to raise than girls:
Me: Do you want this laundry bag of Lindsey’s? We bought it for her when she went to college.
Grant: Why do I need a laundry bag?
Me: To carry your clothes back and forth when you do laundry at school.
Grant: I figured I’d just use a trash bag or something.
That sounds very similar to conversations I had with my son. It’s not uncommon for female college roommates to coordinate the decor of their shared space well in advance of move-in day. I’ve never heard of boys doing this. If boys agree that one of them will bring the fridge and the other will supply the rug,, neither is likely to ask about their room’s color scheme. In fact, they’ll probably not even think about a rug unless mom suggests it.
July 14, 2014
The college tuition discount rate – the amount of financial aid as a percentage of tuition and fees – is “again at an all-time high”.
College continue their “high tuition, high discount” policy.
Private colleges are continuing unabated their strategy of setting high sticker prices while giving most of their students steep discounts, according to the latest survey of private colleges by the National Association of College and University Business Officers.
The colleges, many of which are struggling to meet enrollment goals, are taking in only 54 cents for every $1 they claim to charge in tuition.
The “high tuition, high discount” business model is often confusing to students and parents, but it’s how things are done at most private colleges: the colleges charge high prices and then offer students they want huge discounts. The discount comes in the form of need-based aid for low-income students and “merit” aid for students with characteristics that make them desirable to a college. At wealthy colleges, endowments may have actual funds to replace lost tuition revenue, but most colleges are just waiving the chance of getting more.
Is steep discounting a desperate, short-term strategy?
“If you do too high a discount, then perceptions of desperation creep in,” says Rao. People start to ask: “Are they going out of business? Is this product a dud?”
Mitchell Hamilton is an assistant professor of marketing at Loyola Marymount University. He says deep discounts are a short-term strategy at best. “When you’re looking at discounts of half off or more, or buy one get one free, those are for businesses that need immediate results,” he says. “Private universities are hoping that this is just a strategy to stay afloat until the economic situation gets better.”
Most observers seem to agree that if this trend becomes a race to the bottom, the losers will be ‘”smaller-sized, ‘no-name,’ tuition-driven schools.”‘ Top ranked colleges will continue to thrive.
Ry Rivard, “Discount Escalation”, Inside Higher Ed, July 2, 2014.
Anya Kamenetz, “How Private Colleges Are Like Cheap Sushi”, NPR Ed, July 12, 2014.
June 23, 2014
The short answer:
Your home equity will count on the CSS Profile, but not the FAFSA.
Michelle Kretzschmar of Do It Yourself College Rankings explains more.
Since each school decides if they use home equity in their methodology and how much to consider, how much home equity will affect financial aid will vary by institution. Mark Kantrowitz of Fastweb, estimates that colleges cap the amount of equity (value of home-mortgage) considered at between two to three times annual income. Troy Onink in Forbes reports that “home equity counts under the Institutional Methodology, but only up to 1.2 times the parent’s adjusted gross income (AGI) under the Consensus.”
When in doubt, ask the school directly.
If you want to know the actual figure, you’re best bet is to ask the college. According to Money Watch.com
If your home has appreciated a lot, ask private colleges how they factor in home equity when determining aid, advises Paula Bishop, a financial aid consultant in Bellevue, Wash. Their answers may differ dramatically. Some schools, such as Princeton University, ignore home equity. Others, such as Boston College and American University, include 100 percent of it as an asset.
Troy Onink, “How Assets Hurt College Aid Eligibility On FAFSA And CSS Profile”, Forbes, 2/14/2014.
Michelle Kretzschmar, “Does home equity affect financial aid?”, Do It Yourself College Rankings, 11/11/2013.