Scholarships: Make No Assumptions

When it comes to finding scholarship dollars for college, make no assumptions. You may be surprised about your son or daughter's eligibility, or lack thereof, for aid dollars.

Since the passage of the landmark Higher Education Act of 1965, which had as one of its principal goals an increase in college attendance for children of low- and moderate-income families, the availability of financial aid for college has increased sharply. Of course, you may have noticed that college costs have increased too.

However, it may give you solace to learn that the "sticker price" for a particular school is not the actual price that is paid by most families. The difference between the "sticker price" and the price you pay is often due to a scholarship, grant or loan that comes from the school directly, from a federally sponsored program or from some third-party source.

While all schools have aid programs of some sort, every school and family situation is different. That's where financial aid professionals come in. These are talented and dedicated individuals working for colleges and universities whose sole mission in life is to help students at their institution find the best way to pay for college. They are the individuals to whom you should turn with specific questions about your Expected Family Contribution or "EFC," as it is known by shorthand in the college admissions world.

It's important for you to know that although the EFC is "shaped" by a federal formula flowing from the must-do Free Application For Student Assistance (FAFSA), it is not "applied" in a one-size-fits-all manner. Schools not only have different pricing structures, they also have different methodologies for how they dispense aid to families whom they judge cannot meet the full cost of an education at their institution.

This is where the mantra "make no assumptions" comes in. If your child has a 4.0 average, near-perfect SAT scores, All-State honors in sports, impeccable musical credentials and a documented record of sterling community service - and they have their heart set on going to a top-ranked school such as Harvard or Stanford - you should brace yourself for some difficult news. Not only may your child be rejected or wait listed by a Harvard or Stanford (because there are thousands of others with similar credentials who also want to go to those schools), they may not be eligible for any financial aid if they are accepted.

You may be thinking to yourself: how can this be? It is not because Harvard and Stanford are stingy with scholarship dollars; they dole out millions in aid to families each and every year. It is because Harvard, Stanford and a group of more than 30 others of the most competitive colleges in the country have "need-blind admissions" policies, and they are determined to use their precious aid dollars in the most effective manner possible.

This means they have to make some tough choices, and they are based on numbers, namely your income and assets. You probably have seen the Lendingtree.com ad, where the joy of acceptance at an "Ivy League" school, is immediately tempered by the logical next question: how are we going to pay for this?

Unless your family income is below $40,000 per year, you are going to be expected to make some contribution. If your income is between $40,000 and $60,000, your EFC will step up some, and if your income is above $60,000, it will step up dramatically. You should not be lured into thinking "my son or daughter is special, why of course he or she is going to get a scholarship," at least when it comes to the most competitive schools.

Now the flip side of the aid coin is that there are many schools out there who are trying to get into the same reputation league as the Harvards and Stanfords, and they may be willing to provide your son or daughter a full scholarship or some substantial portion of total expenses, in order to lure your child to attend that school.

It all comes down to old-fashioned leverage: if your child is above the norm of usual attendees at a particular institution, then you may have the ability to say to that school "OK, my child will attend, but what money are you making available to us?"

However, if your child fits the profile of the typical acceptance at a specific school, then your negotiating leverage drops precipitously and, in the case of the most competitive institutions, it simply disappears. If you balk at Harvard or Stanford's high price, there are plenty more just-as-qualified candidates ready to fill your son or daughter's spot.