Warren Buffet famously stated, “Price is what you pay, value is what you get.” Thus, in valuing the education at one college in comparison to the education at another college (or even a third campus), contrary to popular belief, families have the advantage.
Families can negotiate college price, known in educational parlance as “Cost of Attendance” to reduce out-of-pocket costs, asking for “discounts” in the form of merit aid and grants. The negotiations will likely occur over a series of conversations, families presenting arguments why their student merits additional financial assistance.
When parents and students are motivated to find the greatest value, not just the lowest price, they can work with admissions officers and financial aid representatives toward mutual agreement.
As Paul Hill of EducateToCareer.org writes:
For the past 20 years, colleges have discreetly offered discounts, when pressed or motivated to attract certain students. Competition among colleges in recent years has increased the practice of discounting significantly, and the size of discounts is greater than ever.ZeroHedge, April 22, 2021
Yes, the national average private university tuition discount for the 2020-21 school year, the latest data, is nearly 50% for all undergraduates and nearly 54% for first year undergraduates. Discounts are in the form of merit scholarships and grants.
However, public universities also offer discounts in the form of institutional aid, yet are often more restricted by state mandates in offering additional scholarship money.
So, families have the greatest opportunity to “negotiate” with private institutions, like Mr. Hill states:
Every college has an institutional aid budget, and it literally is a discount plan that they can apply with significant discretion. If a parent doesn’t ask, they won’t get it. Schools dole out institutional aid when they need to top up their enrollment numbers, basically fill seats, no differently than an airline.
And, parents I’ve advised over the years can attest to, “If you ask, you shall receive.” One parent, who during a college visit to a Midwestern liberal arts college with a roughly 35% admit rate, was told by the Dean of Admissions, that they rarely awarded additional merit aid when requested, but the parent was welcome to write a letter. 30 minutes and one email later, the student earned $40,000 more over four years.
Usually, students are choosing a college from a range of options, with a variety of merit scholarship amounts, which is “leverage” in requesting more merit scholarships. While families are not obligated to share the exact amounts of merit scholarships or names of the other colleges, admissions officers who seek the specific student’s enrollment over their competition may be motivated to offer additional institutional aid.
Furthermore, Mr. Hill recommends:
Ask the admissions officer what the lowest net price that a “similarly situated” student (same grades, same family finances) is paying.
Then, families can use databases like MeritMore, which companies National Center for Education Statistics from the Federal Department of Education, or TuitionFit, which catalogs actual financial aid award letters from students in previous application cycles, to compare and verify the admissions officer’s proposal, so they can determine their next response.
Additionally, families should be sure to understand what they can pay out-of-pocket, from current income, including scholarships and the student’s own wages, as well as assets or gifts from family. Then, families can more accurately “price” a university’s cost so they know how much discount would make the college not only “affordable”, but more importantly “valuable.”
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