Show Me the Money!!!!

Every year the question becomes more persistent and pervasive with parents.

Where is the money?

That's code for merit-rewarding schools.

I understand.

The cost of college continues to rise.

That's where I often point again to the pyramid.

The US college landscape is still sharply bifurcated between schools that are need-centered and merit-centered.  Almost all schools, however, have some form of both, it's just that some schools have more of one to offer students.  The good news is that the majority of schools still offer more scholarships based monies based on GPA, test score, leadership, community service, etc.  The bad news is that the minority of schools at the top don't.  They have a lot more of the other.

Take Stanford, for example.  Click here and you will find Stanford's annual Common Data Report.  Scroll down to the financial aid section and you will discover that Stanford had $141 million to give in "need-based" aid, compared to only $6 million in merit-based aid.

Now click here to compare with SMU's Common Data Report.  You will discover that SMU had $59 million to give in "need-based" aid, but $29 million to give in merit aid.

So what kind of merit package can you expect from schools?

The NY Times Choice blog recently provided a list of major colleges and universities that included the 1) cost of tuition/fees, 2) the % of freshman who received a merit aid, and 3) the average merit award.

It's interesting to note how our flagship university, the University of Oklahoma, for example, costs $8,021 (tuition/fees).  12% of the incoming freshman received merit aid, averaging $1940.

Take Baylor, as another example.  Baylor charges $31,658 (tuition/fees), 34% received merit aid, averaging $12,943.

Or Tulane.   Cost $42,729.  36%, however, got a merit package, averaging $20,521. 

Often times our students and families will discover that private institutions (particularly liberal arts colleges) are often able to provide generous merit packages that can make a private education almost as affordable as a state public.

It comes down in the end to "value" decisions.

If a family values the prestige (name) of a school, then they have to be willing to pony up for that brand.  There is enough of a high demand and low supply for that brand name, that families that "want more" merit money are going to be passed over.  Too many people are willing to pay.

If longevity and "stretching out your buck" (undergrad + grad school) is your premium value, then it's wise to look for schools where your student is not only admissible (mid 50% range test score and GPA) but also competitive (top 25% in terms of test score and GPA).