Where do schol­ar­ships come from?

In my last ar­ti­cle, I talked about the aca­d­e­m­ic, so­cial and fi­nan­cial fac­tors be­hind choos­ing a col­lege, but the truth is that if the fi­nan­cial piece doesn’t work, then noth­ing else does. So where do schol­ar­ships come from?

For US col­leges, the largest amount of aid comes from the in­sti­tu­tions them­selves. You might find ex­ter­nal schol­ar­ships for US$$100-$1000, but there are few cor­po­ra­tions (cheers to Co­ca Co­la!) that will give tens of thou­sands of dol­lars to in­ter­na­tion­al stu­dents. There­fore, the da­ta you need is con­tained in the fi­nan­cial aid sec­tion of each col­lege web­site. When you are re­search­ing, you should ig­nore the stick­er price on the web­site com­plete­ly. Try to un­der­stand their fi­nan­cial aid thor­ough­ly and how much mon­ey you can get from each in­sti­tu­tion.

Fi­nan­cial aid at US col­leges takes two main forms: need-based aid or mer­it aid (or both). Need-based aid looks at a stu­dent’s fi­nan­cials. The low­er those num­bers are, the more mon­ey the stu­dent will re­ceive from that in­sti­tu­tion. Mer­it aid on the oth­er hand looks at some qual­i­ty the stu­dent pos­sess­es: aca­d­e­mics, ath­let­ics, mu­sic, dance, lead­er­ship, mi­nor­i­ty rep­re­sen­ta­tion, ge­o­graph­i­cal di­ver­si­ty. Hit­ting more of those cat­e­gories usu­al­ly equals more mon­ey. So, how do you know which aid is right for you?

First, de­ter­mine if you fall in­to the high need cat­e­go­ry. There are many fac­tors to de­ter­mine need e.g. ex­pens­es, busi­ness own­er­ship, num­ber of de­pen­dents in the house­hold. But the most im­por­tant fac­tors are in­come and as­sets. A good rule of thumb is that if your fam­i­ly in­come is be­low US$40,000 per year, then you are high need. High need can be a good thing. If you get ac­cept­ed in­to a col­lege with need-based aid, you could re­ceive grants for tu­ition, room and board, and even oth­er liv­ing ex­pens­es. When you ap­ply, the col­lege does some com­plex math, then spits out a num­ber they think you can af­ford (your EFC or ex­pect­ed fi­nan­cial con­tri­bu­tion). If you are high need, look for col­leges that meet 100% need: those col­leges will pay 100% of all col­lege ex­pens­es high­er than your EFC.

Need-Based Aid Ex­am­ple:

Tu­ition and Fees: $50,000 per year

Room and Board: $15,000 per year

Books and Mis­cel­la­neous: $2,000 per year

There­fore, To­tal Cost of At­ten­dance (COA): $67,000 per year

Stu­dent’s House­hold In­come: US$45,000 per year

There­fore, Stu­dent’s EFC (cal­cu­lat­ed by the col­lege): $7,000 per year

Amount the col­lege will give the stu­dent = COA – EFC = US$60,000 per year

Amaz­ing, right?

But high need al­so has se­ri­ous im­pli­ca­tions for your abil­i­ty to get in­to a col­lege. Un­for­tu­nate­ly, the low­er your fi­nan­cials, the more a col­lege is like­ly to re­ject your ap­pli­ca­tion out­right. To avoid this, look for col­leges with high­er ac­cep­tance rates or gen­er­ous en­dow­ment funds. Con­sid­er what per­cent­age of in­ter­na­tion­al stu­dents at that col­lege re­ceive fi­nan­cial aid and what the av­er­age aid award is.

Here’s an ex­am­ple of schools that meet 100% need:

No­tice that Brown’s 7% ac­cep­tance rate will make get­ting in ex­treme­ly dif­fi­cult. Al­so, on­ly 16% of in­ter­na­tion­als re­ceived aid, which tells us that many in­ter­na­tion­als who need­ed mon­ey were re­ject­ed out­right. That said, the av­er­age aid num­ber is very high (high­er than tu­ition), so ex­cep­tion­al high need stu­dents should still con­sid­er Brown. Car­leton’s stats are sim­i­lar.

Look at Deni­son. There is in­ter­na­tion­al mer­it and need-based aid. 100% of in­ter­na­tion­als re­ceived aid. How­ev­er, COA is $69,400 and the av­er­age aid award was $27,429. That sug­gests to us that high need can­di­dates were al­ways re­ject­ed out­right. Low to mod­er­ate-need can­di­dates would have fared much bet­ter, and would al­most def­i­nite­ly have re­ceived some aid.

Now let’s con­sid­er an al­ter­nate sce­nario. If your fam­i­ly in­come is above US$200,000 per year, then you are most like­ly con­sid­ered low/ no need. If the on­ly fo­cus is aca­d­e­m­ic and so­cial fit, then ap­ply any­where you want! But many fam­i­lies don’t want to spend $67,000 USD a year on col­lege even if they can. The so­lu­tion is mer­it aid. Note: If you are low need, but you do not want to pay the stick­er price of a col­lege, then do not ap­ply to need-based in­sti­tu­tions.

So, here’s the dirty se­cret about mer­it aid. It’s an en­roll­ment tool for col­leges to meet their in­sti­tu­tion­al pri­or­i­ties. Does a school need ten­nis? Does a school want a stu­dent who is the first in their fam­i­ly to go to col­lege? Does a school val­ue strong aca­d­e­mics? Are you those things? To re­ceive sig­nif­i­cant mer­it aid, fig­ure out where your strengths help fill a col­lege’s weak­ness­es. If your stats are av­er­age or be­low av­er­age for a school, you are less like­ly to re­ceive mer­it aid.

Here’s an ex­am­ple of a list I would cre­ate for no-need/ low-need can­di­dates:

No­tice these in­sti­tu­tions have much low­er costs of at­ten­dance re­sult­ing in greater af­ford­abil­i­ty even be­fore mer­it aid. The av­er­age aid is more mod­est than those in the first ta­ble, but the over­all price tag still ends up look­ing at lot bet­ter than 67,000 per year.

There are many more as­pects of fi­nan­cial aid to con­sid­er. Take note of fi­nan­cial aid dead­lines. They are some­times dif­fer­ent from ap­pli­ca­tions dead­lines. At­tend free we­bi­na­rs. Look for ap­pli­ca­tion fee waivers and in-state tu­ition waivers. Stay healthy and sane in these un­cer­tain times. Good luck to all stu­dents and par­ents out there!