With many elite private colleges now charging students more than $US60,000 a year, higher education may seem like an unattainable goal for many low-income students.
However, the idea that attending an elite school means shackling yourself to a lifetime of debt is one of the most persistent myths in higher education.
At the core of this misunderstanding is an often striking difference between a college’s sticker price — the full cost of tuition and fees often most visible on a website — and the net price — what families actually pay after financial aid and grants.
The Ivy League schools offer particularly generous need-based financial aid packages to students, thanks to their large endowments. On average, around half of students at those eight colleges receive financial aid, with an estimated average aid package of $US40,000 for the 2012-2013 academic year.
And while the published tuition and fees for private institutions around the U.S. topped $US30,000 for the 2013-2014 school year, the typical student received $US17,630 in grant aid and tax benefits, according to the College Board.
Many higher education advocates say that colleges could be doing a much better job to publicize the difference between sticker price and net price.
“You can make big statements about being accessible, and have need-blind admissions and really low net prices for low-income kids, but still enroll very few of those low-income kids, by doing minimal outreach … There has to be a commitment to go out and find them,” Catharine Bond Hill, president of Vassar College, recently told The New York Times.
As The Times notes, while the number of low-income students attending college in America has seen a significant increase since the 1990s, the percentage of low-income students at selective colleges — about 15% — has stayed the same. The Times also explains why some top schools may be hesitant to advertise their financial aid opportunities:
Colleges generally spend 4 per cent to 5 per cent of their endowments per year on financial aid, prompting some administrators to cite this rough maths: Sustaining one poor student who needs $US45,000 a year in aid requires $US1 million in endowment devoted to that purpose; 100 of them require $US100 million. Only the wealthiest schools can do that, and build new laboratories, renovate dining halls, provide small classes and bid for top professors.
The rankings published by U.S. News and World Report, and others, also play a major role. The rankings reward spending on facilities and faculty, but most pay little or no attention to financial aid and diversity.
Last year, Business Insider spoke with John McDonough, CEO of Studemont Group College Funding Solutions, who shared a few strategies he gives low-income families who feel priced out of elite schools:
Never miss a deadline. “For some families on the low-income side, they probably haven’t had the ability to save anything for college. They’re living paycheck to paycheck. What we tell those families is there are still some deadlines you have to meet. Number one, make sure you get your SAT tests done on time. Apply early enough and then go through the financial aid process on time so that you can be sure you’ve done everything right.”
You can negotiate financial aid offers. “A lot families have never heard that you can appeal colleges and negotiate them after they have sent a financial aid offer. That’s why we tell students to apply to multiple schools, not just one. You can use those other financial aid offers as leverage [when negotiating]. You write a letter to the school, saying that you can not afford X dollars of what they expect and ask them to please re-work their package. We have much better luck negotiating with private schools than we do big state schools. [Public schools] have a set budget and they can hide behind it.”
Visit admissions offices in person. “If you can walk into the college admissions office we find that to be sometimes beneficial. That way, you’re not just a number on a paper and you become a real person.”
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