This is a segment of Bautis Financial’s college planning series, which includes webinars, podcast episodes, blog posts and downloadables to aid college-bound students and families in the admissions process. Visit our college planning hub for more valuable resources.
Evidence finds that the price of higher education is now one of the biggest financial considerations among college-age Americans and their parents. And, according to a CNBC and Acorns survey conducted in 2019, 58% of participants believe that the value of college education is inextricably tied to whether they have to go into debt to pay for it. In other words, college is worth the money — but not if it means taking on too much debt.
So, what schools provide the best bang for your buck? When it comes to college affordability, the sticker price can be deceiving because it doesn’t account for need-based and merit aid. These means of financial assistance can offset the sticker price and, oftentimes, some additional educational expenses that are just as important. That’s why focus should be shifted to these means of assistance.
Among all of the colleges and universities in the country, there are 72 schools that claim to meet 100% of the demonstrated financial need of all or most of their students. See below, Amherst College – Yale University.
Schools That Meet a High Percentage of Need
As a refresher, a student’s financial need is based on his or her expected family contribution (EFC), which is generated when a parent files the Free Application for Federal Student Aid (FAFSA) and, when required, the CSS Profile. This EFC is what a family would be expected to pay, at a minimum, for one year of school. Not sure what you should expect? Get the details.
A school that meets 100% of need is providing their students with an aid package that fills the gap between a family’s EFC and a school’s cost of attendance.
Here’s an illustration to provide clarity.
| Institution’s cost of attendance | $63,000 |
| Student’s household EFC | -$35,000 |
| Demonstrated financial need | =$28,000 |
In this scenario, a school that meets 100% of the student’s financial need would provide an aid package that includes $28,000 in assistance.
Along with grants (free money), most schools will include the Federal Direct Loan in the package. For freshmen, this loan would be $5,500. Only the most generous schools will not include a loan in the award.
Here is an example of a school that only meets 93% of financial need.
| Institution’s cost of attendance | $63,000 |
| Student’s household EFC | -$35,000 |
| Demonstrated financial need | =$28,000 |
| $28,000 x 93% | =$26,000 |
| “Out of pocket” expenses/difference | $1,960 |
This aid package wouldn’t be quite as good as a school meeting 100% of a student’s need.
The Figures Can Be Misleading
It’s important to point out that the institutions self-report their demonstrated need figures, so a school’s generosity depends heavily on the institutional financial aid formula that it uses.
And, while the internal aid formulas of two schools can produce different aid packages, the numbers can vary for another important reason: An institution’s percentage of need figures are based on the applicants who actually enrolled in a school. Presumably, the students who accepted a college’s offer would, in general, have received better awards than those who decided to enroll elsewhere.
For clarity, let’s look at this example.
Student #1 received a low award from a school that only met 50% of their need.
Student #2 received a great award from the same school that met 95% of their need.
Student #2 decides to enroll in the school, while Student #1 decides to enroll elsewhere. The school who offered both of these award packages would only record and report the 95% award package, not the 50% award package.
Key Takeaways
Here are some key findings from studies and surveys conducted by Student Loan Hero and CNBC that offer valuable information on what financial assistance you can expect, and where to look for the most generosity.
- The average value of financial aid packages was $47,895 among the top 50 most generous colleges. However, the gap between aid packages charts with higher costs, as the average annual tuition and fees across 1,244 colleges surveyed by Student Loan Hero was $24,042.
- At private colleges, the average scholarship award is just over $35,000.
- At public schools, the average scholarship award is more than $11,000.
- All Ivy League schools made the list, with Columbia University leading the pack by offering aid packages averaging $55,521.
- Of the top 50 colleges with the largest financial aid packages, 46 reported meeting the full demonstrated financial need for every qualifying student.
The FAFSA opens October 1st, which is the first step to beginning the financial aid process. To better prepare for the open enrollment date, read 15 Answers to the Most Important FAFSA Questions.
Begin your journey of mastering the college admissions process with Bautis Financial. Whether you’re a parent or guardian, student or school counselor, book a free consultation to discuss how our financial advisors can be a college planning resource.
Everything You Need to Know About College Planning – Daily Flash Briefing