“There is money out there for college.” Parents, panicking over the astronomical cost of tuition (an even more commonplace occurrence post-COVID-19), hear this reassuring but somewhat vague advice all the time from friends, neighbors, or the media. They have faith that if they simply follow the rainbow of FAFSA forms, local scholarships, and the whims of the financial aid officers at the schools to which their high-achieving children apply, a pot of gold is sure to await them. Unfortunately, the vast majority of middle to upper-middle class families end up discovering that pot not as full as expected or, worse, entirely empty.

We say this not to welcome you to some cold, harsh dystopian reality where you should just resign yourself to paying full freight for your teen’s higher education—not in the least. In fact, money for college is indeed sitting out there like low hanging fruit. However, for folks that have solid jobs and bring home comfortable incomes, but fall shy of Warren Buffett-level worth by approximately 73 billion dollars and change, the only real shot at paying a reduced tuition rate is through merit aid—a concept that few parents fully grasp. In order to obtain merit-based awards, you first have to understand why the practice exists in the first place and where your child fits within the merit aid solar system.

Why do colleges offer merit aid?

Let’s begin with a brief summary of merit aid’s institutional purpose: In an effort to boost attendance and meet enrollment targets, many colleges have devoted an increasing share of their budgets to attracting desirable students via the offering of merit-based (i.e. non-need-based) financial aid. Using merit scholarships to lure high-achieving or high-scoring students can improve a college’s ranking and prestige. In other words, these schools aren’t handing out money because they are nice or because they know that your 401K took a hit last year—they are doing it because your sons and daughters represent a valuable commodity to them. Recognizing this reality is the first step toward achieving a winning mindset with regard to the procurement of merit aid.

1) Shift your mindset

Students traditionally approach the admissions process from a place of desperation, “Please, please accept me!” This isn’t exactly the best mindset for a consumer in any marketplace and yes, a college applicant is in fact a consumer. When you realize that many admissions officers feel an equal or greater level of desperation to land a student like you, the tables suddenly turn.

Think we’re exaggerating just to make you feel better? Take a guess at what percentage of admissions directors hit their enrollment goals for 2019. Give up?

37%.

You read that correctly. Just over one-third of colleges and universities nationwide were able to attract enough qualified students to their campuses last year. So, while students may be lining up by the tens of thousands to get into a school like Stanford, there are many schools that will offer you tens of thousands for the honor of calling you a member of their freshman class. With the financial damage and uncertainty caused by COVID-19, this will almost certainly be even more true in 2020-21.

The focus is now on constructing a college list comprised of “good-fit” schools who are likely to reach deep into their coffers to nab a student with your academic profile. Knowing how to spot these schools takes knowledge as well as a sober understanding of where you stand relative to other applicants at your prospective schools.

2) Target selective but not the most selective schools

When we say most selective here we mean two things—one in the absolute sense (Harvard, Yale, etc.) and one relative (the most selective schools to which you could conceivably gain admission). The most selective schools in the country—the Ivies and Ivy-caliber institutions—rarely award scholarships based strictly on merit, primarily because they don’t have to. These schools already attract a surplus of students with remarkable credentials, and as such, award almost all of their aid according to financial need. In other words, Columbia isn’t going to throw money at you, even if you are an amazing enough student to be granted admission, because there are thousands of other “yous” in the hopper.

Now the relative consideration about selectivity: If your goal is landing merit aid, then you should not be trying to get into the most selective college that will accept you. Outside of the crème de la crème, there exist a number of highly selective and moderately selective schools that do regularly offer merit aid to attract students—the question becomes—do they have the incentive to offer it to you? And the answer all comes down to how you compare to the rest of their applicant pool.

In general, schools where you are at or above the 75th percentile for SAT scores and GPA/class rank are likely to offer a significant amount of merit aid to land you. Think about it. If, let’s say, you are applying to a selective school like Northeastern University, known for being fairly generous with merit aid. You have a 1400 SAT and finished just inside of the top 10% of your high school class. A 1400 is an excellent score but at Northeastern that is right around the 25th percentile for admitted applicants. Their 75th percentile is closer to 1550. You might get into Northeastern but unless you possess some other rare and valuable gift (how’s your slap shot looking?), you are not likely to get much relief from the $72,336 cost of attendance. Yet, if this same student turned his/her attention to nearby Bentley University, another reputable school known for dangling handsome merit aid packages, the result would likely be quite different. A 1400 SAT is right near their 75th percentile, making you exactly the type of applicant Bentley wants to lure away from its competitors.

3) Target private schools

Private colleges are more likely to be generous in dishing out merit aid primarily because they have larger endowments. Out of the 111 U.S. colleges and universities that have an endowment of over one billion dollars, 66% are private institutions. The public universities that grace this list are still far thriftier with their awards, which is borne out by the data presented in College Transitions’ searchable list of merit aid awards by institution.

Let’s look at how a sampling of how flagship state universities that possess billion dollar endowments award merit aid.

Compare those relatively meager offerings to the generosity of private universities within those same three states—North Carolina, Virginia, and California.

Further analysis of this data is needed, however, as we need to see how these awards would impact the overall cost of attendance for both in-state students and out-of-state students. For this comparison we’ll look only at our three North Carolina schools.

In-State Student

Okay, so for in-state students, the public flagship remains a lower-cost option even with the offer of an average award at Davidson and Wake Forest. Now, let’s see what happens to an out-of-state student considering all three institutions.

*Note: We are assuming that no merit aid would be offered at the state school for a non-resident as this is the most likely outcome as evidenced by the percentage of students receiving merit aid.

Out-of-State Student

As you can see, private schools can be far more generous, and if you were an out-of-state candidate choosing between attending one of these excellent institutions, you would now have a more difficult decision to make. In this scenario, Davidson’s total cost would actually fall slightly below that of UNC-Chapel Hill.

4) Use your geography to your advantage

Close to three-quarters of college-bound students attend school in-state, while 58% choose schools within a 100 mile radius of their home. Only 11% of students opt for an institution more than 500 miles away and just a mere 2% of teens are adventurous enough to enroll in institutions more than 2,000 miles from their parent’s’ abode. One has to figure that a good portion of this 2% involves individuals in Los Angeles or San Francisco making their way to hotbeds of elite schools on the East Coast, or vice versa. This makes the student who leaves, say, Casper, Wyoming to attend Bowdoin College quite the rarity and also someone schools value greatly.

This is because colleges crave something called geographic diversity; that is, a student body comprised of young people from all around the country and even the globe. Most institutions of higher learning sincerely believe in the value of bringing together people with diverse backgrounds, upbringings, and experiences onto one campus. Of course, on a more selfish level, they also want to be able to tout on promotional material that their freshman class is comprised of students from all 50 states and however many countries.

You can use this to your benefit from admissions standpoint. Consider that 18% of UPenn’s Class of 2023 are Pennsylvania natives, 16% are from New York, while less than a handful come from states like Mississippi. Thus it is not hard to imagine why star students hailing from Mississippi are at an advantage. While UPenn, specifically, may not have to use merit aid to lure top students, other excellent schools in or near major metropolitan areas will salivate over a qualified applicant from places like Idaho, North Dakota, or Montana. If you are from a similarly remote locale, there’s a strong chance that it will help from both an admissions and financial standpoint. Your geographic desirability can be parlayed into a merit aid award just by targeting schools far away from home.

5) Research formulaic scholarships

A growing number of schools literally have formulaic scholarship tables that tell you how much merit money you’re likely to get from them. These are most commonly found at larger state universities and while many are not guarantees of monetary awards, knowing, in general, what criteria equates to what level of scholarship consideration can be quite informative.

For example, Colorado State University has a range of scholarships for students with minimum  SAT scores from 1260-1450. At CSU, the amounts awarded to non-residents are much greater than scholarships for Colorado residents, who already enjoy a greatly reduced in-state tuition. Texas Tech University offers as much as $8,500 per year for a 1450 SAT, but students with significantly lower scores can apply for awards in the range of $1,000-$6,000 per year. Other schools, like Miami University of Ohio will award anywhere from half-to-full tuition for students with at least a 1450 or higher. Students in the 1300-1350 range are considered for amounts as high as half-tuition.

There are countless other schools that offer large awards to students who aren’t nearly as high-achieving as in some of the examples above. Birmingham-Southern College offers five-figure annual awards to students with SATs as low as 1030 and GPAs as low as 2.9. At the University of New Mexico, those with SATs in the 1130-1230 range and a B+ average are eligible for up to 8k in annual merit aid.

College Transitions’ final thoughts

There is indeed money available for college in the form of merit-based aid, but few prospective college students are savvy enough to situate themselves in the best position to receive it. Adopting a shrewd consumer-mindset and strategically targeting schools (especially private ones) where you would be considered a catch are the keys to actually finding that proverbial pot of gold or, more accurately, a sizable tuition discount that will at least make that outrageous sticker price a bit more palatable.