Want to know how a college gives away its money?

Hi there,

When families ask me whether a college is affordable, they usually start with one number:

The price.

But there's another question I want you to start asking:

How does this college give away its money?

Because two colleges with similar price tags can have very different approaches to financial aid.

One may give substantial need-based grants.

Another may use more of its money for merit scholarships.

Another may leave a much larger portion of a family's financial need uncovered.

And there's a document that can help you see some of this.

It's called the Common Data Set.

You may never see it prominently displayed on a college admissions homepage, but colleges that publish one use a standardized set of definitions and questions covering admissions, enrollment, financial aid and more.

Here's how I want you to find it.

Google:

[College name] + Common Data Set

Open the most recent year available.

Then skip down to:

Section H — Financial Aid

This is where things get interesting.

Don't worry about understanding every row.

For now, I want you looking for a few things:

What percentage of demonstrated financial need does the college meet?

If a student demonstrates $30,000 in financial need, a college that typically meets most of that need is behaving very differently from one that leaves a significant gap.

What is the average need-based scholarship or grant?

This gives you another clue about how much grant aid the college provides students who qualify for need-based assistance.

And here's one I especially want families who assume they won't qualify for need-based aid to notice:

Does the college give institutional scholarships to students without financial need?

The Common Data Set reports institutional non-need-based scholarship and grant information too.

In other words:

Does this college have money for students like mine—and how does it tend to distribute it?

That's a much more useful question than simply:

“Is this an expensive college?”

This is where I want you to understand the different buckets of college money.

When you eventually receive a financial-aid offer, everything listed under “financial aid” isn't the same kind of money.

You may see:

Grants and scholarships → money that generally does not need to be repaid.

Work-study → money the student has the opportunity to earn by working; it isn't simply taken off the tuition bill upfront.

Loans → borrowed money that has to be repaid, generally with interest.

And then there's another distinction I want you to know:

Need-based aid is awarded because of demonstrated financial need.

Merit or other non-need-based institutional aid can be awarded for reasons such as academic achievement or other qualifications, regardless of demonstrated financial need.

So when a college proudly says:

“Most of our students receive financial aid.”

My next question is:

What kind?

Because a $20,000 grant and $20,000 in loans are not the same thing for your family's bottom line.

There's one more website I'd bookmark:

College Scorecard.

It's a free U.S. Department of Education tool that lets you research colleges using data about things like costs, debt and post-college earnings. Federal Student Aid specifically points families to College Scorecard as a way to put borrowing and financial outcomes into context.

Explore College Scorecard

So now you have different tools answering different questions:

Common Data Set:
How does this particular college distribute financial aid?

College Scorecard:
What do cost, debt and outcomes look like for students at this college?

Net Price Calculator:
What might this college cost a family with circumstances like ours?

You don't have to use all three every time you hear about a college.

But when a school becomes a serious contender?

I would.

Pick one college your student is seriously considering.

Not ten.

Just one.

Search:

[College name] + Common Data Set

Find the newest one.

Go to Section H.

Look at how much demonstrated need the college reports meeting and whether it reports institutional non-need-based scholarships or grants.

Then pull that same college up on College Scorecard.

Give yourself 15 minutes.

You're not trying to decide whether your student should attend.

You're learning something much more important:

How does this college actually work financially?

That's the kind of research that can change a college list.

Angela Robles
College Funding & Essay Coach
The College Cost Hack

I'll bring you another vetted scholarship.

And this time, I'm going to show you something I think families need help with:

A student can be eligible for a scholarship and still not be a strong fit for it.

I'll show you what I look for before I'd tell a student to spend their time applying.

See you Tuesday.