This just in: the average discount on college tuition is now a whopping 56%, the highest number on record, according to the most recent study conducted by the National Association of College and University Business Officers. And in case you were wondering, ALL colleges (yes, all of them) discount. That means that you should expect to pay far less than the outrageous, nearing six figure tuition numbers, you’ve probably seen in the headlines. Even if you are earning six figures yourself.
Now, I hope this comes as potentially some great news and a relief for you — and for any parents who lie awake at night, terrified about how they’re going to afford college for their children. It should, as frankly no one reading this email should have to pay retail for college. Seriously, no one!
It’s estimated that 66% of students are NOT paying the full freight. Your child should be one of them! But for most of us, especially those of us in what I call ‘the forgotten middle class’, this is not automatic. To get a truly fair college discount, you’ll have to first learn about and then take a few strategic steps (which I outline later) – before your child actually applies anywhere – to ensure you’re getting the maximum ‘discount’ you’re entitled to.
This is not my opinion. It’s a fact I actually ‘proved’ back some 15+ years ago in a comparative study I conducted and then co-wrote a book about (Never Pay Retail For College). And the proof is in the pudding with the thousands of families I’ve helped comfortably afford an education that they otherwise thought was out of reach. You can check out real discounts received by my students here.
Despite these results, the reality remains that the actual price of a college education is one of the least understood and least transparent of any product in any marketplace/industry. But it need not be. And I’m committed to making sure that it isn’t. Because …once you realize how colleges set and then discount prices — and that how they do so is deliberate and strategic and intended to do two things:
1. to build the most impressive ‘class’ and 2. meet a pre-set net tuition objective for that class — then you can take full advantage of that knowledge to pay LESS for your own child.
There’s a lot of price elasticity in college tuition – and similar to buying an airline ticket (albeit, pre fee-based pricing and with far greater implications) it’s unlikely that any two customers are paying the same price for any given seat. You want to be the one paying the least for the best seat you can possibly get.
And you can.
So, here’s the truth about college pricing…
The business office of any college is far more concerned with tuition revenue as an aggregate; and less concerned with what each individual student is paying. And therein lie the potential landmines (e.g., need-aware admissions practices that may disadvantage a pre-paid, in-state student) and the opportunities (as in the proclivity of schools to use ‘discounts’ to incent desirable students – applicants who will ’round out’ their class). Furthermore how colleges set and then discount pricing is part of a larger strategy tied to marketing, prestige, ‘rankings data’, alumni fund-raising efforts and other metrics constructed with intention by hired third-party ‘pricing’ strategists.
There is a deliberate intersection of admissions, price and what you’ll actually pay for your kid’s college education. Knowing this — and more specifically, acting upon the knowledge — can provide you with hidden opportunities both in terms of admissions and funding. For starters, consider that the sticker price at all colleges is merely the opening bid, a relative amount that is higher (sometimes much higher) than most students will wind up paying. Don’t reflexively rule out a college because of its published price; and don’t perceive that one school is necessarily more expensive for you than another, just because it appears to be so on paper. Remember, the College Board estimates that more than 66% of incoming freshmen will actually pay less than the full sticker price for their education. The difference is made up by the remaining students who subsidize the cost for everyone else.
Thus most of us – and definitely someone reading this article – should only pay a portion of the published “sticker price”, known as the Cost of Attendance. Here’s why that doesn’t happen automatically: not all schools discount by the 56%, average noted in the NACUBO study and not all students enjoy a 56% discount. Some colleges discount more, some less. Some for merit (test scores, grades); some for need. Some for reasons such as rounding out their student body.
You have to know which schools offer which kind of discounts, for what reasons and whether you’re positioned properly to get one. And you have to know that BEFORE you fall in love with one particular school.
Did you realize, for example, that Ivies and many of the so-called baby Ivies, like the NESCAC schools, never ever give merit-based grants. They do, however, give you 100% of your demonstrated need (which you’ll get only if you can successfully demonstrate that need – which might take an understanding of the rules). On the other hand, there are great top tier schools, like Tulane and University of Miami and USC to name a few, that offer fantastic merit scholarship discounts. Here’s an example (and a cautionary tale):
Out-of-state students at public universities often pay the most. This should not surprise you. It’s no secret that public universities aggressively recruit out-of-state students and quietly covet international students – it’s the most oft-whispered explanation for the hyper (and unwarranted) competitiveness among in-state applicants at our own public universities! Out of state and international students often pay full price in today’s dollars. Most in-state students don’t. Makes sense (from a business perspective) to fill as many spots with full-price students as they can — without hurting the prestige of the class (that’s the academic perspective). It’s a balance. Once a school has met its aggregate revenue targets with full-paying students, they can be more aggressive about using financial incentives (financial aid and merit scholarships) to entice those students whom they really want (academically, artistically, geographically, gender-specific, etc.).
Consider how this type of information — especially if you have it about a particular school you’re considering — can be utilized to your advantage (or to your detriment). There are infinite ways…depending on your family’s interests, budget and academic aspirations. At minimum, it should inform your admissions strategy. We can – and do – calculate and compare your true expected cost at any particular school you’re considering before students finalize their college list. We know what to expect, within a couple hundred dollars, well before the student hits submit. It’s peace of mind at the front end for sure and real savings on the back end to boot.
Bottom line:
Clearly today’s college process is different than it was — not better, not worse, just different. More complex. Adapting your admissions and funding strategy to today’s rules will assure that you avoid the landmines and leverage the opportunities of the new reality. In the old days, paying the bill was only considered AFTER the acceptance letter arrived. Today that’s the absolute wrong thing to do. Today, a good admissions strategy is one that identifies schools where your child will have a good academic experience, become prepared for her future, and will be affordable. Knowing which schools will likely be generous to you BEFORE your child applies (or if price is not an object, which schools will find favor with you), will make for a much less stressful fall and a far more enjoyable spring!
With proper planning, and by taking action, I’ve seen families save thousands of dollars by taking such action, especially when their kids are in 10th grade or younger.
I’ve also seen families lose out on such opportunities…by waiting…and doing nothing. In fact, it’s this time of year when I receive quite a few calls from desperate parents of 12th graders whose kids are already admitted to college, hoping that I can help them save money and find discounts. It’s frustrating to tell them that I really can’t help them. I’m sure it’s frustrating for them to hear it as well.
It doesn’t have to be this way for you, and my warning to younger parents is to avoid that fate by taking action and getting an early start on this process.
In the 17 years that I’ve had the pleasure of helping families tackle both the high cost of college and the increasing selectivity of admissions, the best results come when I’m able to work with students and parents during the two years before high school graduation, or even three years. If you’re in that situation, then let’s have a chat.
If you have a student entering 12th grade next fall, then I have some frank words for you: you’re in emergency mode.
But there is some hope: check out our College Application Summer Boot Camp. During this 6-week course we will help your child complete the college application and personal statement (essay), as well as prepare a resume and a strategic list of colleges that will maximize her chances at admission…and possibly a discount.
I’ve taught this course each year for the past 17 (this will be our 18th annual class). Past students finish the class and enter senior year confident that their application is not only completed, but that it’s expressive. The parents who love them get to enjoy this last summer of their child’s high school instead of arguing over this very stressful process.
Let’s reduce the stress and instead take action. The college application process doesn’t have to be an awful experience. It can be gratifying and insightful, especially if your child is able to find his or her voice. And if you can save thousands of dollars by discovering where to find the discounts, then it can be financially rewarding as well.
