Why do you need to understand the basics of supply and demand in higher education? Because paying for college is like paying for any other service or product in your life. Higher education is a business, with it’s own marketplace, that abide (somewhat) by the basic principles you may have learned in economics. The sooner you recognize this, the sooner you can start targeting schools most likely to provide the most generous merit aid.
Colleges in high demand have so many students applying, they can be more selective about who they accept. The fact that these schools are in such high demand means they don’t have to offer any incentive for students to attend. In fact, they can charge more for students just to apply! If nothing else, consider how a college who receives so many applications from top-notch students would even aware merit scholarships when everyone is so obviously qualified? So, as acceptance rates decrease, the cost of a college increases. However, colleges that don’t have the same flow of applications from qualified students, have to offer financial incentives for them to attend. Among the 81 colleges that accept less than 40% of students, only 2 provide 90% or more of freshman with institutional aid. And a large number of these 81 schools give institutional aid to less than 50% of freshman; but the vast majority of that money is actually need-based aid NOT merit aid.
Bottom line: If you want to pay less for college, you need to start shopping at schools who have less demand, where you may not recognize the name, and they have higher acceptance rates – which are all not such bad things! It also doesn’t mean you’ll get a less than quality education.
How To Find Private Colleges That Offer Merit Aid
The problem is finding those colleges most likely to offer such scholarships. Ultimately, you’ll never know how much money a college will award until you apply. But there are ways to target schools that are more likely to provide merit money than others.
Starting in January, Michelle Kretzschmar of DIYCollegeRankings and I will start our 3 week course (once a week webinars) that will show you step by step the process for how to target schools for financial aid. This includes both need-based and merit-based aid. We’ll explain how understanding the financial aid process and different factors (such as college rankings, location, supply & demand) can affect your financial aid award.
We’ll also walk you through our specially designed tool to show you how to do your own personalized college search based on your specific needs and situation.
We think about this as a Moneyball approach to paying for college. If you want to figure out how to pay less for a quality college education, this class is for you.
Use the R2CSave50 coupon, you’ll save $50.