Finding Free Money for College

Last week I talked about how it’s important to determine whether your family will qualify for financial aid or not before you embark on that great college odessey. Once you’ve got a pretty good idea of where you stand on that score, you’ll want to look for schools that are either generous with financial aid, merit aid or both.

A quick way to find out if a school doles out merit money is by looking at college profiles on CollegeBoard.com. First you type in the name of the school into the web site’s College QuickFinder. Once you’re looking at a school’s profile, click on the “Cost & Financial Aid” link. Scroll down and you will find what the “average non-need based aid” is. That’s merit aid.

If you see a blank in this space, that’s an excellent tip off that a school doesn’t believe in merit awards. Ivy League schools, as well as some of the other bigger name schools, don’t give out any merit money. So if you don’t qualify for need-based aid at these schools, you are out of luck. (I believe Ivy League schools, by the way, are vastly over hyped.) The majority of colleges and universities do provide merit money.

You can use the same Cost & Financial Aid link to get an idea of a school’s policies regarding financial aid. I’ll use the school my daughter goes to — Juniata College — as an example. The tuition and dorm at Juniata is nearly $37,000. That’s a lot, but the school is very generous to its students. The average merit package is $11,792. And the average need-based financial aid package is $22,124.

What’s important when you’re looking at need-based numbers is how much of that aid package is grants versus loans. Obviously you want grants, which don’t have to be repaid. At Juniata only $3,642 of that $22,124 is loans. That’s a great deal.

What the College Board’s web site won’t tell you is what percentage of the freshmen class win merit awards and what it takes to get one. You can often find the answer to one or both of those questions by visiting the school’s web site. To illustrate what you can find, I’m using Case Western Reserve as an example because it aggressively awards merit cash.

According to the College Board, Case Western Reserve’s average merit award is $16,174. Armed with that information, I visit the school’s web site and learn that more than 93% of first-year students receive some type of financial aid. The percentage of incoming students who snag a merit award is 61%. The average award is $18,590. The school’s own figure is more generous than the College Board statistic, but the outside source might have slightly older figures.

You can get even greater detail about a school’s generosity by looking at its Common Data Set. This set of numbers, which is updated yearly, are generated by every school for use by U.S. News & World Reports and other publishers of college books. Many, but not all schools post their Common Data Set numbers on their web sites. Just type Common Data Set into a school’s web site to find it. If you can’t find it, ask the school. As an example, I’ve provided the Common Data Set to Juniata.

Just because a school is generous doesn’t mean your child, if she is admitted, will be entitled to these hand outs. Your child will have a much greater chance of money if she is in the top 25% to 30% of the incoming class based on grades and SAT scores. Some schools will be more generous with kids who have a special talent such as acting, athletics, painting, music, computer skills etc. Kids who barely get into reach schools will probably get nothing but a bunch of loans.

Obviously, it’s not helpful for a child to receive an acceptance letter for a school that’s priced at $40,000 when the college suggests that the child and the family apply for loans. This only sets up a Catch 22 for a family. The parents will look like callous jerks if they tell their kid the school is unaffordable or they, if they buckle under the pressure, they will jeopardize their own retirement if they take out a second mortgage or drain their retirement accounts to pay the tab.

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