by Lynn O’Shaughnessy, link here

What schools offer the best college financial aid?

Last month, I wrote this post: 51 Colleges with the Best Student Financial Aid.

Please take a look at the list because it includes schools with awesome financial aid policies that will reduce your stress about how you will pay for college. Researchers from the University of Pennsylvania and Amherst College assembled the names of colleges and universities that offered financial aid packages that didn’t include student loans.

You can also find a list of schools with great college financial aid at ProjectOnStudentDebt.org.

But here’s a problem: The list of colleges with the best student financial aid is in flux. The days of no-loan financial aid programs could be ending for many middle-income and affluent families. In fact, at least two colleges on the list of the 51 Colleges with the Best Student Financial Aid, wouldn’t even qualify anymore.

Last week Williams College announced that it was reducing the eligibility for its gold-plated college financial aid help.  Dartmouth College announced yesterday that it was ending its no-loan student financial aid policy. From now on families with incomes above $75,000 will have to borrow some of the tab.

I suspect the announcements will keep coming.

It was hardly a surprise that elite colleges, which traditionally offer the best financial aid, would start rolling back their cushy financial aid programs. You see these colleges launched these aid programs back in late 2007 and early 2008 –  right before the stock market collapsed and endowments started tanking.

When the no-loan financial aid policies first began in 2007, elite institutions didn’t want to be left behind so within a breathtakingly short period many super selective colleges and universities piled on. Now that Williams and Dartmouth have made their moves, I wouldn’t be surprised if many more colleges become stingier.

Lynn O’Shaughnessy is the author of The College Solution, an Amazon bestseller, and she writes a college blog for CBSMoneyWatch. Follow her on Twitter.

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Next Webinar is…

Tuesday, December 8th, 2009 at 7pm Central Time

Register Below

College Finances 101 has now come to the web. Attendees have been praising this ground breaking presentation for years; now you can participate in the comfort of your own home or at work.

In 90 minutes, I will cover the most important aspects of minimizing your students’ costs for college. You will learn…

• How parents can often send their children to expensive private colleges for less money than a state school.
• How to fix lost money caused by popular college savings plans.
• How to identify schools that give you more free money.
• The great myths and misconceptions about college funding that can cost you thousands of dollars.
• What assets are penalized 4 times higher than others when applying for help.
• Why waiting one year can cost you as much as $5,000.

“The information Mr. Anderson shared was
incredibly eye opening.” — Tricia Christiansen, Guidance Counselor,
Hampton-Dumont HS, Hampton, Iowa

“What an eye opener! We wish we had
attended this seminar sooner. This seminar has given us ideas and
information but also hope…” — Dave & Maria Sullivan, Rock
Island, Illinois

“He has provided our families with
invaluable information. Scott does an excellent job…” — Linda
Cutler, Guidance Counselor, Rockridge High School, Taylor Ridge,
Illinois

“Listening to all the options available
to pay for college encouraged us that we don’t have to sacrifice a
quality education because of a lack of money.” Pastor Scott & Tonya
Culley, Silvis, Illinois

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In July of this year, I published an article titled The Mythical Ivy Impact.  I discussed the evidence which suggests striving to get into prestigous colleges like Harvard, Stanford, or Yale may not be worth it if you have to take on substantial debt to do so.  Now it’s the fall, and discussions about college selection are flying all over forums on the Internet.  And I am still surprised how quickly the knives come out when you suggest it may be better to take the money and go to a so called “second tier” school, as opposed to mortgaging your future to pay for an Ivy or near-Ivy college.

I invite you to read my full article at the link above.  Also, here are the links to the supporting articles from USA Today and the Brookings Institute:

USA Today: Wanted: CEO, No Ivy Required PDF

Brookings Institute: Who Needs Harvard PDF

In a nutshell, don’t get hung up chasing prestigious named schools.  If you get in and it’s reasonably affordable, great!  But there is no reason to put yourself under a mountain of debt.

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It’s the beginning of July.  All the graduation parties are over, and the summer is in full swing.  Now is a time when a lot of soon to be high school seniors and their parents begin thinking about what colleges to look at.  In conversation… on the web forums… I hear over and over again:

• “Is this school prestigious?”
• “Does this school rank high?”
• “What does the US News report say about this school?”
• “How does this school compare to Harvard… Yale… Georgetown… etc?”
• “What’s the toughest school I can get into?”

The genesis of these questions is the perception that a degree from a select group of schools is somehow going to make your life easier.  You’ll earn more money.  You’ll know the right people.  You’ll get a better job upon graduation.  It’s as if there is an ivy fairy who is going to sprinkle gold dust on a graduating student and their whole life is going to change.

Come on… every one knows that if you make it into Harvard, you are far more likely to earn more money.  Right?

I’m going to let you in on a little secret.  Now be careful who you tell this to, because it could start a fight at numerous block parties and soccer games.  It’s not true.  Yep.  It’s not true.  It’s a lie.  It’s that common sense that if far too common, but makes no sense.

The truth was documented several years ago in a study conducted by Alan Krueger, an economist at Princeton, and Stacy Berg Dale, a researcher at the Andrew W. Mellon Foundation.  They published a study in 1999 that proved incredibly controversial, and has been generating heated debates ever since.  So what did they find?  They found out that where a student goes to school does not impact their future success in life.

They studied 1976 students from 34 colleges across the country.  They did find that some students who went to an Ivy League school were more successful in life than those who didn’t.  But the real shocker was they found that students who were accepted to Ivy League schools but chose to go to a less “prestigious” school did just as well if not better than their Ivy League counterparts.  Their conclusion was that it is the student, not the school that dictates the opportunities for success.

This goes right to the heart of a very big problem.  Many students are basing their self-worth on whether or not they get into the right school.  After all the adjustments of adolescence, along comes the college search process.  Grades evaluate them.  Sports evaluates them.  How they do in the talent contest evaluates them.  The acceptance or decline of one particular college has become the referendum on the sum total of the first 18 years of their life.  This is wrong.

We have to get away from this unholy authority that a single college’s decision has upon the value of a student’s life.  Students must understand there is no such thing as the “best” college.  There is only the best colleges for them.  Colleges… plural.  The college search and selection process needs to be fluid and encompassing.  The student should not be expected to make a rifle shot in the bulls-eye at 600 yards.  This is much more like trying to get the right shotgun pattern at 20 yards.

The student’s goal in the college search process is to find one safety school where they are getting in no matter what.  They want four to six match schools where they have a good chance of coming into the school in the top 50% or top 25% of the incoming freshman class.  Then they may want two to three stretch schools; these are the schools where they are not sure they could get in.

The students also need to be comfortable with the idea of going to any of the six to ten schools that they will be applying to.  If they are able to take this kind of an approach to the college search process, then they will be under far less pressure and have much better opportunities for the monies than are available at the colleges to which they apply.  This selection strategy is not just about finding the colleges that feel right, but it is also about positioning your student to minimize their college costs.  Follow this strategy, and you will do far better than most.

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Governor Schwarzenegger has proposed eliminating the Cal Grant program as part of the new state budget.  The Cal Grant program is one of the largest if not the largest public financial aid program in the country.  The perception of free or dramatically lower cost college in California is largely due to this gargantuan fin-aid program.  This move is huge.

California is experiencing a financial meltdown of biblical proportions, and students look like their going to get hit just as hard in the state as everyone else.  Now political pundits and economic masterminds are going to be debating the fall of the California public economy for years, but these students are going to need answers now.

Here’s the first thing you need to do… start looking outside of California.  I know it would be nice to stay home, but let’s face facts, California is broke, busted, out of cash.  And that means your hopes of big money from the state are gone.

There are plenty of colleges around the country that will have very reasonable prices waiting for you.  Check out some of the out of state public universities.  Get out of the state and check out the rest of the country.  You’ll be surprised to find that many states have out of state tuition rates that are comparable to in-state rates.

Check out the private colleges.  Private colleges often have many more buckets of money they can pull from as compared to the state collegs.  State colleges over the years have relied heavily on the tax base, and frankly, that’s made them lazy fund raisers.  Private colleges are masters at raising funds, so they may not experience as heavy a hit from the loss of the Cal Grant program.

This is not the end of the world for California students.  This just means you’re going to have to look beyond your borders and look beyond the state schools.

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