By Jill Janofsky, Achieve College Counseling, LLC
Baltimore, MD

The height of college application season comes with its own unique set of stressors, not the least of which is navigating financial aid and scholarship applications. I often have families express to me that they do not view money as an object when considering their children’s “dream school.” I would like to make it clear: no matter your financial situation, money is always an object when deciding on the right college for you and your family. While the sticker prices of colleges and universities in the U.S. are the highest they have ever been, I have some good news: the posted price of a school does not necessarily reflect what a large percentage of families actually pay.

To ensure that you get the best deal of all and that you find the best school for you, be sure to have the following questions in mind as you consider each institution. The answers vary by school, and having the most accurate information can save your family thousands:

Q: Does the school in question offer merit aid, need-based aid, or both?

Many institutions award merit aid to academically outstanding students as a way to entice them away from other institutions. These scholarships are more often extended to applicants with grades and test scores well above the median of the average applicant. A large percentage of institutions in the U.S. regularly extend offers of merit aid to accepted students, a practice also frequently known as “tuition discounting.”

Most highly selective institutions (such as Ivy League and top liberal arts schools) do not offer merit based aid under the rationale that every student would be eligible, but tend to be more generous with their need-based packages (see more info on need-based aid below). If a school does not offer merit aid, you will not be eligible for institutional scholarships if your family income falls above a certain threshold as determined by the FAFSA and / or the CSS.

Q: If you are applying for need-based aid: does the school base its aid package on FAFSA and / or the CSS profile?

The FAFSA is the federal application for student aid, and is based entirely on your family’s tax return income from the previous year. With very few exceptions, parental income determines need up until the student turns 24. After you submit your FAFSA, the system will generate the Expected Family Contribution (EFC) – that is the amount that the federal government has determined your family to be capable of paying for the upcoming academic year. The FAFSA is generally the go-to application for the majority of colleges and universities nationally. Keep in mind: your aid package may vary in future years if your income changes; the FAFSA must be re-submitted each year that your child is in school.

Some colleges also consider the CSS application, which takes into account other family assets outside of just taxable income, including equity on a house.

Q: Does the school separate out loans from grants in its aid award?

College financial aid packages generally contain two types of aid: grants and loans. Grants are free money that do not need to be repaid, while loans must be repaid and cannot be discharged in bankruptcy. All of these sources of financing can come from various sources (the school, the federal government, private banks, etc.). If your goal is to remain debt-free (or keep the amount of debt incurred by your family as low as possible), it is crucial that you distinguish between the school’s offer of grants and loans – these differences are not always made clear in the financial aid offer letter. You may need to do some serious comparative numbers crunching to determine the best deal. A college counselor with in-depth knowledge of financial aid can help you with this process.

Q: Does the school I am applying to commit to meeting all stated need?

If you are depending on need-based aid to finance your student’s education, it is crucial that you ask the school if they are committed to meeting all stated need. If the school does not commit to meeting all stated need, that generally means that grants and tuition discounts will be limited for most accepted students, leaving the students and their families to figure out alternative ways — such as through loans or outside scholarships — to finance tuition.

It is important to remember that when a college tells you that they commit to “meeting your stated need,”  “stated need” is generally determined by the Expected Family Contribution (EFC) generated by the FAFSA. I once worked with a family that had an EFC of $10,000. A college that cost $60,000/year offered the student grants equivalent to $50,000, leaving her with a balance of $10,000 per year. The parents then asked the financial aid office why they had a balance of $10,000 at a school that is committed to meeting all need. “Meeting all stated need” assumes that your family will be willing to cover what your EFC has determined your family capable of covering.