How to Create a Financially Balanced College List

Rounding out the previous two blogs on FAFSA and EFC by Edmit.me, this week, Edmit will address one of the most critical elements of a college list - creating a Financially Balanced College List. Edmit.me is a college financial planning platform with the mission to help families make great financial decisions about college. 

Key Takeaways:

• Don't gloss over the financial research as you do your college exploration. Gather information on financial aid and scholarship opportunities from the start.
• Make sure you have "financial reaches" and "financial safeties" on your list.
• Position yourself for financial aid appeals by applying to colleges that consider appeals and also colleges that are similar to each other.
• As you do your college research, you will probably have a running list of colleges and perhaps even a spreadsheet that’s tracking your research and keeping tabs on the colleges you like.

 

At some point soon, you’ll need to stop adding new colleges and start removing the ones you won’t be applying to. So how do you make sure you keep finances in mind when you do that narrowing?

We occasionally come across families who find they can’t afford any of the colleges they have been accepted to—after all the heartache and effort of the application process! This is a highly preventable situation: with a little extra homework, every family should be able to find a few colleges that are financially safe for them.

Here are three steps to take to make sure you have some affordable colleges on your list:

 

Round out your financial research

Hopefully, you’ve filled out your FAFSA and have completed net-price calculators for the colleges your student is most interested in. You’re familiar with the type of financial aid you’re expecting (whether need-based or merit-based), and are narrowing your search according to what schools will be generous with students like yours.

Here are the top recommended financial items you should track for every college you’re considering:

• Published cost of attendance (in-state or out-of-state)
• Percent of financial need met
• Is merit aid available?
• What are the requirements to get merit aid? (Sometimes you might automatically qualify for something based on your SAT/ACT; in other cases there’s no separate application, but the outcome is unknown; and, for some schools, there might be a separate application)
• How many students typically receive merit aid? In what average amount?
• Average SAT scores or GPA (to see relative strength and merit qualification)
• Net price estimates (from Edmit, the college’s net price calculator, or your own research—it’s often helpful to estimate this a few different ways to see the range)
• Financial aid or scholarship deadline (if different from application deadline)
• Forms required (FAFSA, CSS Profile, and/or other)

As you narrow your list, review colleges’ financial aid and admissions websites to learn about the application process and what aid is offered to incoming freshmen. Search for the college’s name, plus “merit scholarships” or “financial aid” to zero in on the right pages or other helpful sites.

 

Make sure you have “financial reaches” and “financial safeties"

Now is the time to make sure that your application list is balanced. In the same way that the list includes academic “reach” schools, some of the schools on the list might be a reach financially.

For example, these could be financial reaches:

• A college that awards generous merit awards, but only to a small number of students. Even if your student is a strong applicant, there are no guarantees that the pricing will be in your range.
• A more selective college whose net price calculator is slightly out of range for you, but you’d be willing to stretch given the opportunities that would be presented by that college.
• A college where you have to apply for merit scholarships and you aren’t sure if you’ll receive them.
• A college that is very generous with need-based financial aid but does not give merit scholarships. You aren’t sure how the college will gauge your financial need as your financial situation is complex.

A financial “safety” is a college that you are confident will be affordable for you.

• Your in-state university, where you will pay low tuition and could even live at home if needed
• A college with low tuition rates and affordable cost of living (not in an expensive city)
• A college where your grades and scores automatically qualify you for significant scholarships.

You’ll find as you do your research that some colleges are more noncommittal or vague than others about what they will cost you. Sometimes this is because they don’t know themselves—they are leaving their options open to see how their applicant pool shapes up! In other cases, an admissions or financial aid office could be fairly clear with you that a price is the price, and not to expect much of any additional scholarships or discounts. You should pay attention to those signals also. If a college has a very detailed net price calculator and does not award much merit aid, the price you see is probably close to the price you’ll pay.

 

Position yourself for financial aid appeals

You can also think like an insider and consider what factors the college will be responding to when it sets your financial aid. Harvard isn’t hurting for students or tuition dollars—but many colleges in America are. Financial aid appeals are a process by which you can ask for more financial aid after receiving your initial acceptance and offer (kind of like a negotiation, though colleges don’t like to think about it that way). One of the things that makes appeals most successful is having other offers that you are considering which are lower—especially if those offers are from similar colleges.

Here are some good guidelines for positioning yourself for an appeal:

• Apply to at least one or two private colleges that are tuition-dependent, as they tend to have more flexibility on pricing. Factors like smaller endowments, small class size, or lower selectivity can tip you off about a college’s tuition dependency.
• Apply to schools that compete with each other for students so that you can base an appeal on another college’s lower offer. Colleges that are similar to each other, in the same region and with the same student profile, tend to be competing for students.
• Make sure you have a public university on your list. Smaller private colleges are often competing with local public universities for students, so they’ll be more willing to come close to in-state pricing for students who are more price-sensitive.
• If your admissions ‘safety schools’ are generous with merit aid, even better—since a stronger student is more likely to get scholarship dollars.