Answers for Stressed-Out Parents, Part 3 May 6, 2009

Today, we’ll continue with our series on answering the most common questions New Jersey parents with college bound students ask…

QUESTION: OK, let’s say I’m a parent who’s just starting to think about this. Say my daughter is a sophomore or junior in high school. Where do we begin?

The first and foremost thing is to get good grades in school. Remember, you’re trying to be in the top 20% of an incoming college freshmen class. That’s because colleges fight for the top 20%, while they accept the rest. The money – especially the free money – is in the top 20%.

So do whatever you can to get the highest SAT or ACT scores you can—as well as the highest class rank. And make sure you take a challenging course load.

Next, start researching schools that have the best policies on giving good financial aid packages. There are 76 colleges and universities with an endowment of $1 billion or more. These schools are going to be the most generous in terms of aid. But don’t stop there. There are all sorts of creative scholarships and award packages out there. Recently, I was just reading about a liberal arts college in Michigan, Olivet College, that offers free tuition to any class valedictorian.

Remember, there are three types of aid: grants, work-study and loans. You want grants, aka the “free” money that doesn’t have to be repaid (2nd choice is work study). We always recommend you know the school’s ability to give you money in advance, so you can decided which colleges and universities you even want to bother visiting.

QUESTION: Aren’t all schools created equal?
Many New Jersey parents don’t realize that private colleges with a “price tag” of 40 or 50 thousand dollars can actually cost less out-of-pocket than state schools whose cost of attendance is $20,000. They assume that all schools are created equal and will be able to give you the same amount of money. This is costly mistake.

For example, it can cost you more out of pocket to attend The College of New Jersey than to attend Princeton.

It is very important that you know each school’s history of giving money before you ever apply so you’re not blown away when you get a bad financial aid package from your school’s top choice. Universities that hand out lots of merit money include Tulane, Baylor, University of Rochester and Catholic University.

Our company has a database of every college and their track record for giving aid. We can also tell you which ones tend to give grants vs. loans. For example, Amherst and Williams and Davidson almost always give free money in the form of grants instead of loans.