4 Numbers to Know Before Applying to College

In 2021, my article titled "4 Important Numbers to Know Before Applying to College" was published on CollegeXpress. Since the financial aid process has drastically changed these past few years, I've decided to update this post as of August 14, 2024.

One of the biggest mistakes families often make in the college search process is not talking about money. They assume “everything will work out” or their student will earn a “full-ride” without really understanding how paying for college works. Parents often don’t want to let their students down, so they find a way to pay for a school. I’ve seen families sell their homes to cover tuition costs, take out thousands of dollars in loans, and drain their retirement accounts. But it doesn’t—and shouldn’t—have to be this way. If you start with the money conversation right away, the college search will be easier, less stressful, and less expensive. Here are four numbers you should discuss with your teen ASAP.

1. Your college budget

Before your child begins exploring colleges, it’s essential to determine how much your family is willing and able to pay for college. Unless you are completely fine paying almost 100k/year for the next four years, you need a budget. According to the Education Data Initiative, the average tuition for in-state public colleges is $9,349 and $27,023 for out-of-state tuition. Florida has the lowest in-state tuition costs ($4,541/year) and Vermont has the highest ($17,593/year). Colorado ranks in the middle at $9,269/year. Tuition at private colleges is almost four times the cost of in-state tuition. Even for those of you are banking on the HOPE/Zell Miller Scholarship, attending somewhere like UGA or Georgia Tech is still over 20k/year. When building your budget, you should include the direct costs you pay to the college (tuition, fees, room and board), and the indirect costs, like books, transportation, and other miscellaneous expenses. Many of my families are surprised by how expensive Greek Life is, especially at large Southern colleges. According to the College Benefits Research Group, students can spend upwards of $5-10k each year they are in college to fully participate in a sorority or fraternity. This budget should factor in not just tuition but also room and board, books, travel, and other miscellaneous expenses. Being upfront about the budget helps set expectations early on and steers your child toward schools that are financially viable.

2. Your Student Aid Index

When I wrote the original article, I mentioned something called the Expected Family Contribution, or the EFC. This was a number generated by the college to determine how much you should be expected to pay that year for college based on your income and your assets. However, since most colleges do not meet full-demonstrated need, families were often "gapped," and they didn't understand why their cost was higher than their EFC.

This past year, the Department of Education created the Student Aid Index (SAI). Instead of being a dollar amount, the SAI is a "formula-based index number ranging from –1500 to 999999. Where your SAI falls within the SAI range helps your school determine how much financial support you may need." Families receiving a negative SAI will have the highest need and qualify for the full Pell Grant. Colleges will then take this number to determine what aid, if any, you are eligible for at their college. Because it is not tied to a dollar amount, it's a little more challenging for us to determine what aid you should receive from a college. However, most colleges have updated their Net Price Calculators (NPCs) to help you identify how much that specific school should cost you based on your estimated need. I highly recommend that all students run the NPC for EACH college they are considering before they apply. Applying to colleges that do not align with the type of need you are looking for (see numbers 3 & 4) can lead to a lot of heartbreak and/or a lot of debt. 

3. Percentage of need met and average student award amounts Different colleges meet different percentages of a student’s financial need, and the average financial aid award can vary widely from school to school. As I mentioned above, most colleges do not meet 100% of demonstrated need (although here's a list of those that do). I've found that colleges that do engage in this practice make it very clear on their financial aid pages because they are proud of this fact. If it's not obvious, I recommend contacting the financial aid office to see what their average need-based award packages are, and the percentage of students who receive need-based aid. Researching this information for each college on your child’s list can help you identify which schools are likely to provide sufficient financial aid and which might leave you with a significant gap to cover.

Additionally, more colleges are offering specific need-based programs to students from certain demographics or income brackets. For example, Colorado College has a program for CO residents called the Colorado Pledge, where families who make between $125-250k/year will pay "equal to or less than the COA at CU Boulder. Families from lower household income brackets will pay even less.

4. Percent of students receiving non-need/merit aid and average award amounts Non-need/Merit aid, commonly referred to as "scholarships" is a form of financial aid awarded to students based on their academic, athletic, or artistic achievements, regardless of financial need. Some colleges, like the University of Alabama, have a very clear award chart, where if a student has a particular GPA and test score, they will automatically receive X. Other colleges, like Syracuse University, do not have set criteria- they look at the entire pool of applicants and determine who they would most like to enroll. That means a student with a lower SAT or GPA could receive more money in merit if the college thinks they are likely to attend. Remember, merit scholarships are essentially coupons and awarded to students at the discrepancy of the college.

If a college isn't transparent on their website, you can dig into the Common Data Set to determine the percentage of students who receive merit-based aid and the average award amounts. Using the Merit Insights tool on Grad Better can help you estimate the merit award your student can expect to receive from the schools on their list. If a college doesn't award merit scholarships, and the net price is more than you are willing or able to spend on college, I highly recommend removing it from the list before your student applies. It's easier to say no in November than no in April after a "yes" arrives.

In Sum

If you let your college budget guide your student’s search, they’ll create a financially sound college list. They won’t spend time on colleges that don’t award merit aid. They’ll save hundreds of dollars in application fees, and you won’t spend vacation days visiting schools that don’t work financially for your family.

These financial conversations might be challenging, but they are far easier to have before your student applies to colleges than after they receive an acceptance letter from their dream school with a price tag you can’t afford. By discussing finances openly and early, you’ll be imparting valuable financial wisdom to your child—skills they will carry with them into adulthood. You'll also set a realistic framework to guide them toward a successful and financially sustainable college experience. Remember, it’s much easier to talk to your student about college finances before they begin their college search than after they’ve been admitted to their dream school. You’ll be modeling financial wisdom for them that they can hopefully take into the future.

You can view the original article here.

Have questions or want to talk about your specific situation? Contact Allison or visit Grand Fit Educational Consulting for more information.