WHY SOME PEOPLE PAY FULL PRICE FOR COLLEGE
Most people don't pay full price for college. If you've read any prior College Focus Newsletters or watched any of the workshops, you may already be aware of this.
But an analysis of data collected from the U.S. Department of Education provides insight into who pays full price for college and who doesn't. Nationally, only 25% of freshmen and 38% of all undergraduates pay the full sticker price.
At state universities, only 29% of freshmen pay full price while just 14% of freshmen at private colleges do. The students most likely pay the sticker price for their bachelor's degrees attend these types of universities:
Students who are more likely to skip paying full price attend these institutions:
Below is an analysis conducted by Mark Kantrowitz, the publisher of Cappex, a popular college admission website. Kantrowitz's analysis shows that the more selective the college is, the more likely students are to pay full price. You can see this phenomenon in his chart below:
The most elite research universities with their extremely high rejection rates can charge full price to wealthy students without depressing their applications. Many high-income parents will also pay full price (willingly or not) if their students get into elite trophy schools. And that’s true even though the price of a bachelor's degree at some of the most coveted universities has no reached $300,000!
Universities in this exclusive category include:
It's possible many of the schools like the ones above could double or triple their price and would still have no trouble attracting more than enough applicants.
It's the same story with the most elite liberal arts colleges that are also perched at the top of their U.S. News & Work Report category. Despite having less visibility than their highly ranked research university peers, the highest ranked liberal arts colleges don't provide any merit scholarships:
While none of the above-mentioned schools so far provide merit scholarships, the most elite colleges and universities tend to provide the very best need-based aid for students. The challenge, of course, is getting admitted to these institutions.
Application: If you are a parent unlikely to qualify for need-based aid due to your income and assets, you can expect to pay full sticker price if your child is interested in schools similar to those mentioned above. If this is a concern, it may worth exploring excellent, but lesser known smaller colleges that can offer merit scholarships for your student. Similarly, if your student is likely to qualify for need-based aid and is gifted academically, know that aid is often readily available at these schools if your student is admitted.
Q: In filling out the FAFSA (Free Application for Federal Student Aid), it asks you to report untaxed income. I'm confused by what this means?
A: This is a common area of confusion for many parents. Here are major sources of untaxed income that must be reported on the financial aid applications:
You also many have other items come out of your paycheck that you would not include in the above as untaxed income. For example, medical insurance premiums are not considered untaxed income.
This research material has been prepared by Horsesmouth
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.