Archive for May, 2015

Sticker Prices Hide the REAL Cost of College

Tuesday, May 19th, 2015

 NetPriceVsStickerPrice     One of the many acronyms that college bound students encounter is COA or cost of attendance. It constantly amazes me when media only talks about “tuition costs” when they run stories about colleges. What they should do is include the fees, room and board and personal expenses to that figure. That will often bring the COA up another $18,000 or more.

Private colleges that use federal money in their financial aid packages are generally running about $55,000 to $65,000 per year “soup to nuts”. With the exception of about 50 so-called elite colleges, most offer merit money to highly qualified students or meet the criteria for those scholarships. Admittedly, a good 30% of private colleges and out of state publics simply offer “tuition discounts” in the guise of scholarships simply to get students to commit.

Having said that, I have had many students graduate in four years form fine private colleges at less cost than they would have paid at an Ivy League college or state university where the latter would be offering only student loans. For many middle income families state schools often create the largest financial burden to a family despite the lowest published cost.

In addition, due to the ever increasing strategy of financial aid leveraging and preferential packaging, an applicant’s academic profile will greatly effect how much grant or scholarship aid he or she will get. While not used by all colleges, these practices will negatively impact the aid a student who is in the lower quartile of the applicant pool. That is why I place a great deal of emphasis on researching the current class profile or ‘common data set’ to measure where the student may fit in that demographic.

Education-Savings

      In other words, if two colleges have similar costs of attendance, a student may be offered entirely different financial aid packages should one of the colleges be using leveraged analysis or preferential packaging. Unless, you do a money saving “Dry Run” with us or someone else who is familiar with the financial aid practices at many colleges, you will seldom know which college is offering the best value from a financial standpoint. Even now with the required “College Cost Calculator” on college websites, you still won’t know the true bottom line cost of that college until one week following the student’s acceptance.

     The differences outlined above can be as large as $15,000 a year or more.  These differences are often masked by sticker price. That is why we encourage all families to include a realistic money-saving “Dry Run” step in their college planning. If you have not done that yet, then what are you waiting for? Do not repeat the experience that this parent had.

 

Brand Name Paralysis

Wednesday, May 13th, 2015

bromwich_1-081414_jpg_600x636_q85 If you were to ask a random group of kids “Name three competitive colleges.” Most would reel off Harvard, Yale and Princeton without any hesitation. In fact ‘HYP’ has practically become an acronym for any “brand name” college. It is at this time of year that the mail box gets the most attention. Especially if the college bound senior has applied to the most competitive colleges in the country.

With all the attention given to magazine rankings, colleges that are on the top of the list are often the only ones bright high school students think of when developing his or her initial list. I smile inwardly when I realize (after a few minutes of conversation) that a family has what I call “Brand Name Paralysis” or BNP.

It is a neurological disorder, but not a serious one. However, not treated, it could result in unnecessary stress, abdominal pain and a depleted investment account. Of course, I am joking…kind of.  Treatment is painless but does call for the patient to have an open mind and a modest ability to think “outside the box”. Review our college planning timeline to understand how we do this.

In our offices we have large maps showing the colleges in all 50 states and Canada. We have placed pins into the colleges so that families can see where other students we have guided have Grove City Greenmatriculated. It is great fun to place a pin on a college name that a student (or parent) has never heard of prior to meeting with us. Two such examples would be the college to the right and in the upper left of this page. Can you tell me the names of those colleges?

One is in Pennsylvania and the other is in California. In both instances students have received wonderful educations without any debt, yes ZERO! But there is more to it, much more. All of which we can cover in a complimentary “get acquainted” consultation. We look forward to sharing more with you.  Call (978) 820-1295.