Colleges don't give you money

Tomorrow, December 1, the newly revised FAFSA will open up online, several months later than it usually does.

I haven’t seen the updated website yet, so I don’t have any specific advice about the FAFSA. But I do have some big-picture advice about affordability and paying for college. And that advice comes down that one reminder: colleges don’t give you money.

Pretty much everyone, myself included, goes along with the idea that financial aid is money that the colleges are giving away. We use the verbs “give” and “offer” all the time. If the sticker price is $50,000 and the price that you’ll be charged is $25,000, then they “gave” you $25,000 in aid. You might contact them to see if they can “offer” you more. And that $25,000 is real. It’s money that you’re not paying, and it makes a huge difference in your life. But it’s not money that they’re giving you, it’s just a discount on what they charge you.

Compare it to buying clothes. Imagine you go to Macy’s to buy some jeans. The price tag says $100, but they’re on sale for 20% off. So you pay $80. That $20 difference is real—it’s money that you can spend on something else. But it would sound kind of silly if Macy’s told you they were “giving” you $20 to buy the jeans. It would sound ridiculous if Macy’s added up all the discounts they gave over a year and claimed they “provided” Americans with millions of dollars in aid. That sale price isn’t money they’re giving away, it’s a discount on what they’re bringing in. It’s a slight distinction, but it can have a huge effect.

Unlike Macy’s, colleges do this all the time. They have a sticker price, and they offer you a discount, and then they frame it as money they’re offering you. They can have you focus on how generous their offer is instead of how much money you and your family are paying. You don’t have to play along if you don’t want. You can stay laser-focused on your cost, not their generosity.

And then there’s debt. When colleges offer you loans to help you pay for college, this counts as aid. That actually makes sense, because if you’re able to afford the college by taking the loan and paying over years when you wouldn’t be able to afford it in cash, then they are indeed aiding you in your ability to go to college. But don’t let that aid get too caught up in the language of “offer” and “giving.” It’s money you’re spending. You’re spending it over time, not all at once, and that’s really helpful. But you’re spending it, and taking a risk doing so. Give your future self credit for that money, not the college, because it’s your future self that is actually paying.

This advice is about mindset and perspective. By reminding you that colleges don’t actually give you money, I’m hoping to help you make more rational decisions and have healthier emotions. So when you get your financial aid offers in the coming months, keep a few things in mind:

Stay completely focused on the cost to you, not what the college is offering. If you read a financial aid offer and still aren’t sure what your cost is (it happens often), get in touch and ask them to explain the offer so that you can understand what your cost it. While you’re at it, ask them what the average price increase is every year.

The sticker price is completely made up and arbitrary. On average, only about 15% of students pay the full price. There are lots of factors that go into the sticker price, but one strategy that some schools use is setting a higher sticker price so that they can advertise how generous they are with aid. It’s like Macy’s changing the price of those jeans from $100 to $110 so they can still get $80 but also advertise a $30 discount instead of $20.

The price that you pay is your price, and almost every student has a different price. How much of a discount schools offer is determined based on your family finances and how much you can afford, your perceived long-term value to the school, and how many discounts they’re offering other people. Your perceived long-term value to the school is complex. How much a school perceives your value to them may take into account how likely they think you are to graduate; how much time and talent you may contribute to the campus while you’re there; athletic, artistic, or other talents you have that can be useful to a school team or program; how likely you and your family are to donate to the school in the long term; and what academic and/or social gaps the school is experiencing that you can help fill. When you hear “merit,” you probably think of how well you performed in high school. When the colleges say “merit,” they’re probably thinking about your long-term value to them. They aren’t the same. There’s no way for you to know your perceived long-term value to a school ahead of applying for admission and financial aid.

If you’re trying to estimate your cost at a particular school, skip over their stats about average aid offered or percentage of students who receive aid. Don’t get caught up in the “offers.” Look at two numbers: the average net price and the average indebtedness at graduation. Use those as your reference points. If your family has normal finances, that is likely to be around the price they ask of you. If your family has less money than average, expect a lower price. If your family has more money than normal, expect a higher price.

Pay attention to debt. If you graduate college within five years and don’t take on too much debt, then the debt is probably worth it. The average lifetime earnings of college graduates is much higher than that of people who don’t have a college degree. If you already feel like there are obstacles that may keep you from graduating, then you should be very hesitant to take on student debt. You should also be hesitant of taking on more than $30,000 debt total over the four-five years you’re a student. I’d like to say that you can adjust a reasonable debt load based on your career path. Maybe higher debt is fine if you’re going into computer engineering, and you should be more frugal if you’re going into early childhood education. But the truth is that you don’t know what job you’ll have in your first few years after graduation, or how much it will pay.

Talk to your family about money, as soon as possible. You should know your line between “affordable” and “not affordable” before you apply to schools, and definitely before you start getting financial aid offers.

Never skip applying to a college that you think is a good fit because you think you can’t afford it. Wait until you know your cost, and then decide if you can afford it. People are surprised by their financial aid offers, in both directions, all the time. Maybe you’re right and you can’t afford it, but make them tell you so.

Assume that you’re going to attend the least expensive school that accepts you. If you decide to go to a school that is more expensive than other schools that accept you, you should be able to explain—to yourself and others—why. “Because it’s a better school” or “because it’s a better fit” aren’t good enough. Be able to explain why you think it’s a better school for you and why you think the extra cost is worth it.

Thanks for reading! If you enjoyed this post, here are three easy things you can do:

1. Share it on your social media feeds so your friends and colleagues can see it too.

2. Read these related posts:

   Things for parents to know about paying for college

   Not all merit aid is the same

   Three things parent should stop saying to their children

3. Ask a question in the comments section.

Apply with Sanity doesn’t have ads or annoying pop-ups. It doesn’t share user data, sell user data, or even track personal data. It doesn’t do anything to “monetize” you. You’re nothing but a reader to me, and that means everything to me.

Photo by Angela Elisabeth

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Paying for college: some basic principles

It’s really hard to talk about paying for college with a broad audience, because every individual’s circumstances are different. And individual circumstances are really important to college affordability, since the price of college depends to a huge degree on your individual circumstances. One of the great things about college education—but also one of the complicated things—is that most students pay different amounts for the same education. The pricing for college is some of the most complex and opaque pricing out there. Still, there are some basic principles that can help make the process a little easier and more rational in the long run.

1. You don’t know what any individual college will cost you until you apply and are accepted.

You can look at the published full cost of a university, but remember that only about 13% of college students pay full price. On the end, about 2% of college get a “full ride” scholarship that pays for everything. Everyone else gets at least some financial aid, probably including you. How much financial aid? Well, that depends on how much you need. And it also depends on how much the other accepted students need. And, of course, it depends on how much money the school has to give out for financial aid. If a college accepts a lot of wealthy students who can afford the full price, then they have more to give as aid to less wealthy students. But it also means they have a lot more wealthy students and a lot fewer others. Colleges balance these things—the desire for a diverse student body and the money to provide financial aid—on a yearly basis. So your aid package is unknown until you’re part of that year’s calculations. There’s just no way of knowing until then.

There are ways to get an idea of how much financial aid you may get, but it’s only an idea. Each college provides a net price calculator. You enter in some financial information, and the calculator will tell you how much aid to expect based on estimates and averages from the past. But again, you don’t know for sure until you are accepted and get an actual offer.

You can also look up the school’s average percent of need met. The higher that number the better. A school that is able to meet 100% of their student's’ financial need is probably going to be more affordable than a school that can only meet, on average, about 70% of their students’ need. Knowing the average for last year doesn’t tell you how much you’ll be offered this year, but it gives you some clues about what the school is able to do.

You can also look up a college’s average indebtedness. It’s the average amount of school debt that students have when they graduate. For most universities, that number is between $20,000 and $30,000. Be careful for schools where the average debt is higher than that.

The main thing I want you to remember is to never decide not to apply to a school simply because you think you can’t afford it. You may be right, but make them tell you so. Surprises happen all the time. On the other hand, always make sure you keep schools on your list that you’re more confident you can afford.

2. Talk to your family about money. Soon.

There’s a line, or at least a range, between your family saying “yes, we can afford that” and “no, we can’t afford that.” There’s a line, or at least a range, between “yes, that’s an acceptable amount of debt” and “no, that’s too much to borrow.” There’s a line, or at least a range, between “I can work after school to cover that cost” and “I can’t make that much money on top of full-time school.”

We may not want to think about those lines, and we may not want to talk about them, but they’re there. The sooner you talk about where those lines are, the better. It’s not always an easy talk. It’s almost never an easy talk. But it’s a talk you must have with your family. It’s better to have it now, before you have your mind set on a school, than after you think you’re going to a school and are then told “no, we can’t do that.”

3. Most or all of your financial aid will come from the college.

Think like a donor. If you want to donate $100 to help a student afford college, how are you going to go about that? By spending hours and thousands of dollars setting up a scholarship fund? Nope. You’re probably going to donate your hundred bucks to a specific college for their scholarship fund. Even if you have $1,000 to donate for scholarships, it’s much simpler to give it to a college for their funds. Even Michael Bloomberg, who donated almost two billion dollars to help with college affordability, gave it to a single school for their financial aid funds. That’s why your biggest financial aid awards are going to come through the college.

Lots of financial aid actually comes from the federal government, in the form of Pell grants and subsidized student loans. Many states also have grants for college affordability. But it’s the financial aid office at the school you attend who coordinates all those awards and loans. The money, even when it isn’t the school’s money, usually makes its way to you through the school.

There are some big private scholarships out there that you apply to directly, not through the college. The Coca-Cola Scholarship is a well-known example. So yes, there are other sources of funding outside the school. But it’s a very small portion of overall funds, and those national scholarships are fiercely competitive.

There are also tons of smaller—$100 to $1,000—scholarships out there. A lot of students find, though, that these simply aren’t worth the time it takes to find and apply to a bunch of them.

4. There’s paperwork to complete.

It’s not simple or easy. It requires your family’s tax forms and sometimes other financial statements.

Luckily, it’s consolidated. Everybody should fill out the FAFSA. Do it as soon as you can. It opens up October 1. Don’t wait any longer than you have to, even if you haven’t decided where you’re going to apply. It’s a federal, standard form that all the schools will ask for, so just go ahead and do it. Even if you’re not expecting to get any financial aid, fill out the FAFSA. Surprises happen all the time. Plus, plenty of places won’t even consider you for merit aid if you haven’t filled out a FAFSA.

Some colleges, mostly private schools, will also ask you to complete the CSS Profile. It’s similar to the FAFSA, but administered by the College Board. It’s more detailed and broad than the FAFSA.

5 There are some terms to understand.

I’ve already covered the basics. Click the links below for a longer explanation of:

Expected Family Contribution

Gapping

Need Aid vs. Merit Aid

Need Blind

Thanks for reading! If you enjoyed this post, here are three easy things you can do:

1. Share it on your social media feeds so your friends and colleagues can see it too.

2. Read these related posts:

   Schools can, and should, teach college affordability

   Three things parents should stop saying to their children

   Don’t pass up a full ride

   Asking for more financial aid

3. Ask a question—or share other resources—in the comments section.

Apply with Sanity doesn’t have ads or annoying pop-ups. It doesn’t share user data, sell user data, or even track personal data. It doesn’t do anything to “monetize” you. You’re nothing but a reader to me, and that means everything to me.

Photo by Angela Elisabeth.

Apply with Sanity is a registered trademark of Apply with Sanity, LLC. All rights reserved.

Should you go to a community college?

I worked for four years as an English teacher at a large high school in suburban Houston. Talking with my students—all of them juniors—I got the sense that the school counselors gave the exact same advice to every single student: go to community college first; get your basics out of the way; save money. I got really annoyed by this. It wasn’t annoying that they advised community college. Community college is real college, and don’t listen to anyone who tells you different. What annoyed me was that they made the advice universal, the same for everyone. Community college is real college, but like any other type of college, it isn’t the best fit for every single student. In fact I think it’s a bad fit for most college-bound high school students.

I’m going to explain why you should be cautious about planning on community college, but then I’m going to tell you when you shouldn’t listen to me about that. My advice to avoid community college isn’t any more universal than the counselors’ advice to start with community college.

My main concern with beginning at community college and then transferring to a four-year school for a bachelor’s has nothing to do with quality or curriculum. There are really amazing professors at community colleges, and it’s easy to get a high-quality education at most community colleges. My concern is that college is more than curriculum, it’s culture. While you’re at community college getting your basics, a lot is going on at your eventual four-year college with the first- and second-year students there. You’re missing two years of the social bonds that come with starting at a university. Yes, you get social bonds at community college also, but not all those people will follow you to the same university. (If you go to a community college where most of the graduates do go on to the same university, then this problem is of course minimized.) When you begin at a community college, you don’t get early exposure to the professors who will be teaching your upper-level courses in your major and possibly recommending you to graduate programs or internships. You aren’t getting to know any clubs and organizations, and you aren’t making yourself a part of them.

If you’re only in college for the diploma and the credentials, then you may not be bothered much by this. That’s fine. But for a lot of people their university becomes a fairly big part of their identity and the launching point for the trajectory of their life, and doing the first two years of that someplace else can have an outsized effect. This applies not just to community college students but anyone who transfers from one college to another. As someone who transferred from a small liberal arts college to a state university after two years, I can still remember the feeling of not really belonging to either of them. It took a while to get past that. Obviously, lots of people overcome this problem. I did, and millions of others did. But I still think you should be warned that the problem exists.

Also speaking of culture: if you do go to community college, pay close attention to who you’re spending your time with. If you find yourself hanging out and studying with people who are all determined that this is a step on the way to a bachelor’s degree, then it’s easier to keep up your own determination. If you find yourself with a group who are drifting and biding their time, then you can easily end up with the same approach. Normal is, by definition, whatever you’re surrounded by. Choose mindfully what your normal will be at community college.

There’s another ugly truth to four-year colleges you should be aware of: most people don’t graduate in four years. If you’re really going to spend five to seven years in college, then doing two of them at a much more affordable community college makes a lot of sense. But please keep in mind that not all your credits will transfer perfectly or fulfill requirements for your major. For some, beginning at community college is actually what hinders them from graduating in four years. There’s not a simple and easy way to know which approach will be most affordable, especially without financial aid packages in hand to compare.

My biggest concern about community college is for the students who don’t make a decision to go to community college, but use community college as a way to avoid or delay a decision. They’re not sure if college is “right for them,” or they’re not sure where they want to go to college, or they didn’t have the help and resources they need to make a good college decision. So they’re going to go to community college to just give it a try. This is often where the word “just” comes into the equation, as in “I’m just going to go to community college for a year and figure out what to do next.” Whenever “just” is part of your thinking, there’s a problem. It usually means you’re selling yourself short and not realizing everything you’re capable of.

So I think community college is probably not the best option for college-bound high school students. If you’ve got the motivation, skills, and resources to do community college right, then you’ve probably got what it takes to go straight to a four-year college and do it right, too.

So this is when we talk about when you should not listen to me and should go ahead and plan on community college. If for any reason you haven’t yet got the motivation, skills, or resources to thrive in a four-year college, then community college is a great option. There’s no shame or problem with that. If you graduate high school without the motivation, skills, or resources to begin college, it’s almost certainly not your fault. You are at a high school that doesn’t have college readiness as a focus, or you had trauma or difficulties that got in the way. Your financial aid documents weren’t ready in time or you didn’t have support in getting them in the first place. You didn’t have help putting together a balanced college list or the resources at home and/or school to do it successfully. For many people, all of the above are true. If this is the case, then community college is absolutely the place for you. It’s the place where you decisively change your path and the course of your future. It’s where you refuse to let the failures of the system you came from affect the system you go into. It’s a resourceful and affordable and, for many, liberating place. It’s a different path to a bachelor’s degree than going straight to a four-year college, but it’s a well-worn and viable path. And it needs repeating: community college is real college.

Thanks for reading! If you enjoyed this post, here are three easy things you can do:

1. Share it on your social media feeds so your friends and colleagues can see it too.

2. Check out these related Apply with Sanity posts: Don’t just get into college, finish it. Where you’re going has what you want.

3. Ask a question in the comments section.

Apply with Sanity doesn’t have ads or annoying pop-ups. It doesn’t share user data, sell user data, or even track personal data. It doesn’t do anything to “monetize” you. You’re nothing but a reader to me, and that means everything to me.

Photo by Zoe Herring.

Apply with Sanity is a registered trademark of Apply with Sanity, LLC. All rights reserved.