Every year I do college planning workshops for parents of college bound high school students. These workshops are held at local high schools and parents often contact me afterwards for an overview of their situation. Often, I can help them make more well-informed decisions about how to pay for college and educate them how their college goals affect retirement.
One of my strongest recommendations is to be careful about the school your student chooses to attend. How much you pay for college ultimately comes down to the school your student chooses to attend.
A while back I met with Jennifer and her husband, Michael, to discuss their situation. Earlier this fall Jen sent me the email below. Jen and Mike’s son is exceptional. Their story isn’t necessarily a reflection of what you might experience when shopping for colleges. However, it’s a great example of how one family was able to leverage their student’s unique talents to their advantage.
After the email, I share some of the key takeaways below.
Names and other identifying information have been changed, and I edited the email for length.
Mike, I attended your presentation at our local high school last year and we met once in your office for a college and retirement planning strategy session.
Just thought I’d update you on what has happened in our situation. You may find the process interesting since it’s atypical.
Our oldeest son is a Freshman at Minnesota State. Our income was too high for him to qualify for any grants, etc. so the only free aid he can get is from private scholarships. With what we have saved and his employment, the loans he’ll take will be minimal.
Our younger son was being recruited by Stanford for sports. Stanford decides how much you’ll pay via Needs Based Aid. There is a Parent Component and a Student Component. The Student Component is about $5,500 and can be covered by outside scholarships, savings, or work study. Having the older son in college reduces the parent component for our younger son for now.
Stanford doesn’t use the Academic Performance Index that the Ivy leagues do. The API is a scoring model that allows coaches to compute an average for their athletic recruiting class. It normalizes grading scales and test scores for comparison purposes. If the school (i.e. Princeton or Columbia – 2 others he visited) requires an average API of 215, that means the coach can bring in some top athletes who meet the team needs but who are less scholarly, if they also can bring in some athletes that maybe won’t be the starters but who bring up their recruitment class API average.
My son had an API of 230. He has a 35 ACT and a 4.1 GPA with almost all AP and Honors classes. He is also one of the top 100 2018 recruits in the country for his sport. So, the Ivy schools really wanted him because he met their athletic and API needs.
The Ivy League schools don’t compete with one another on price. They do offer Needs-Based Aid, but Princeton was the cheaper financial estimate so Columbia matched to Princeton. Stanford doesn’t officially price match to anyone. BUT – when they learned that our packages from the Ivy League schools were several thousand below their offer, they took a second look at our financials. They didn’t end up exactly matching to the Ivys, but the price got into the same ballpark.
So, Stanford doesn’t use the API & they are the most selective school in the country with a less than 5% Admission rate. They turn away kids with perfect ACT/SAT scores. They want attendees to give back and be part of the Stanford experience, not just be a smart student. All athletes must meet Admission standards, however coaches can advocate for their recruiting class. The thing an athletic advocacy helps with is that admissions knows the coaches need to fill their teams with quality athletes. So, if there are 2 applications on the desk with a 35 ACT and 4.1 GPA and one has a coach advocating for him, that kid gets some preference because he will be representing Stanford and Stanford will benefit by winning more championships.
So long story short – my kid is going to Stanford and we are over the moon excited. He doesn’t get an Athletic Scholarship, but he is basically going there for the price my older one is paying for at the state college. The school’s booster club will also cover any gap in the student portion. My son will apply for outside scholarships and will definitely get some but it’s nice to know that if he only gets $4K per year in scholarships that the extra amount he owes doesn’t come out of my pocket and he can use his summer job money for his misc. expenses during the year since he would have a hard time working and maintaining D1 athletic obligations during the school year.
Interestingly, if he were to get $6,000 in Scholarships, that would only reduce our grant, not the parent contribution. Parents can, however, pull from Student Savings vehicles to meet the parent contribution.
Just thought you might find this interesting for any future questions you get asked about scenarios such as ours. Thx!
Wow, what an amazing story. Thanks “Jen and Mike” for sharing.
Here are 3 key takeaways and some details you might have missed.
First, leverage your student’s unique talents. Of course, having a super talented student-athlete really helps. You probably didn’t miss that detail, but the key is to leverage your student’s unique talents to find schools that will reward your student with academic, merit-based financial aid. Whether it’s their ACT score, GPA, athletic or musical talents, etc. (or more likely, a combination of those things) you want to try to find a school (or schools) that want more students like yours. Most schools that offer merit-based aid will increase their awards for the most talented students. Your job is to do the legwork to find those schools. In this case, Stanford doesn’t offer merit-based financial aid, but they did increase their overall financial aid award which, in my opinion, is basically the same thing.
Second, schools never “negotiate”, but it’s interesting what they will do when they really want your student. Just by asking for more help and using the financial aid awards from the other schools Stanford was motivated to find ways to make their school more competitive from a financial standpoint. Stanford doesn’t match other schools offers, but apparently, they are willing to be competitive with other similar schools, at least for the right student.
You can use this technique at just about any private college. The idea is to let the college know what other offers you are mulling, ask if there is anything else you and your student can do to make attending their school more affordable, then ask if there is anything they would be willing to do to make their school more affordable for you and your family.
Most schools have a process for appealing their financial aid award. If you are not satisfied that you have received the best award possible, consider making an appeal.
Third, additional scholarships don’t always mean you pay less for college. Re-read the second-to-last paragraph in the email, “Interestingly, if he were to get $6,000 in Scholarships, that would only reduce our grant, not the parent contribution”. This is not unusual. Often when a school offers to meet your financial need, they also will reduce the amount of their need-based aid by the amount of your outside scholarship.
From the school’s point-of-view, your need is less because you were just awarded an outside scholarship. Therefore, if they are meeting your need and your need has been reduced, their obligation to meet your need is reduced as well. One way around this is to ask a school how outside scholarships will affect your need-based award.
Being a well-informed consumer of a college education pays off. Financial aid varies from school to school, family to family and even student to student within the same family. Jennifer and Michael’s story will be different than yours. However, doing your homework, leveraging your student’s unique talents and being a smart consumer of a college education may be your best strategy to pay less for college.