How to find and obtain college scholarships and financial aid

What does college cost? That simple question has a complicated answer. Just as airplane passengers will have paid wildly varying prices for the same flight, college students do as well. 

Some could pay the “sticker price” of $76,040 per year for tuition, housing, and meals at Princeton University, others might receive a bill for $13,405 per year (the average cost for students who receive financial aid there), or some number in between.

Needless to say, most of us would rather pay $13k than $76k for college. Over four years, that’s the difference between a five-figure bill and a six-figure one.

There are two major ways to lower the cost of college:

• Convince the college or university to charge less.
• Convince a third party to help pay for college.

Or, put another way, get more financial aid from a college or university and get scholarships and grants to help pay college expenses. Luckily, there are many ways to do both.

Start by choosing a college

Colleges publish their sticker prices, average financial aid packages, and other helpful data, typically in the Admissions section of their websites. An easier way to search multiple colleges is the College Scorecard, managed by the U.S. Department of Education. The site includes data on prices, majors, admission rates, graduation rates, and other helpful info.

Pay close attention to the criteria colleges use to determine whether to admit a student. Applying to colleges that have similar criteria can make it possible to leverage offers later. If a student’s first choice is College A, but College B is comparable and offers more financial aid, sometimes the offer from College B can be used to negotiate a better offer from College A.

Fill out the FAFSA

Most colleges and universities use the Free Application for Federal Student Aid (FAFSA®) form to determine need-based financial aid. Some schools add another form, but the FAFSA is almost universal. Completing and submitting the form is critical to receiving financial aid at nearly all schools.

The good news is that most families will only have to fill out the form once when applying to colleges; the same form can be distributed to multiple schools. The second piece of good news is that once parents and students have filed their tax returns for the year, much of that information can be linked to the FAFSA, which saves time and reduces mistakes.

Two things to keep in mind:

• The FAFSA is very time sensitive. The deadline is typically June 30, but the sooner the FAFSA is submitted, the more money schools will have to offer financial aid, so don’t wait.
• Students/families will have to submit a new FAFSA every year the student is in school.

Many high schools and community organizations offer classes and seminars on completing the FAFSA, and there are helpful online resources as well. Some accountants and consultants can also provide guidance, although the form isn’t that difficult. 

Completing the form will also generate an Expected Family Contribution (EFC), which is the government’s estimate of how much the student and family will be expected to contribute towards tuition and expenses. The EFC isn’t binding on schools but can be helpful when budgeting for school.

Understand the offer letter

Because college offer letters have no standard format, they can be confusing. Chances are there won’t be a line item for the net price you’ll pay, so you’ll have to do a little math to determine your actual out-of-pocket costs.

The short version: take the total cost of attendance and subtract all grants and scholarships. You may also want to subtract the potential loans listed in the letter. However, keep in mind that Parent PLUS loans are available to all parents, even though only some schools will list them on the offer letter. 

For a fair comparison, don’t include PLUS loans when comparing offers. If the student qualifies for federal work-study funds, that information will also be listed. Remember that work-study is optional; students can choose whether or not to participate.

Be sure the letter includes all costs, including housing, meals, and supplies. Not all letters will.

Negotiate and appeal

Although a college’s offer letter may seem ironclad, sometimes there’s wiggle room.

First, many colleges and universities have an appeals process for need-based scholarships and aid. If you feel the school has missed anything related to your financial situation or it’s about to change, filing an appeal is generally simple and could result in a better financial offer. 

The FAFSA is a snapshot of the student’s and family’s finances at that moment: any anticipated or unexpected financial changes, such as job loss, are grounds for appeal.

Sometimes, offers from other schools can be used as leverage to negotiate reduced tuition or additional financial aid. If the student’s second choice school offered a better deal, it’s worth asking if the first choice school can match that offer or at least sweeten the deal.

Generally, the key is that the two schools must be reasonably similar. An Ivy League school won’t care that a “lesser” school offered a better deal, but schools that attract similar students and see each other as competitors can be open to negotiation.

Hustle up scholarships

Roughly 1.7 million scholarships are awarded annually, and virtually all recipients can trace their success to one word: hustle.

Most high schools keep lists of scholarship opportunities, and online resources are abundant. Pay particular attention to niche scholarships that serve a limited audience, such as scholarships for potential female engineers, students of Scottish descent, and even tall people. 

Niche scholarships can be less competitive than more mainstream scholarships, so left-handers and vegetarians (among others) have a better chance of getting some tuition money. In many towns, local organizations offer scholarships as well.

Parents should check if their workplaces or alumni associations offer scholarships or other financial aid. If they’re a member of any clubs or other organizations, ask them as well. Even some elementary and middle schools offer scholarships to their alums.

Just as the sticker price of a vehicle may or may not be the final price you pay, a school’s “sticker price” may have no relationship with the amount a student actually pays. With a bit of time and effort, students can often shave thousands of dollars, or even more, off the cost of college.