How to Get the Best Deal on College for Your Kid
Some fundamentals of college decision season still apply: The envelopes bearing acceptances are the thick ones, fat with information about registration and financial aid. But no longer can parents and college-bound seniors depend on those aid offers to equal affordability, making spring a time for potentially agonizing family discussions.
If he or she is like the average college-bound student, the next few weeks may be the first time your child has thought about the relative costs of his top college picks.
"Traditional students tended not to use cost information as a primary filtering criterion when conducting their searches," according to a 2011 study by the nonprofit Educational Conservancy, considering mostly the schools' reputation and the majors they offer. Only when it came time to make a final decision do most kids — especially the better-off ones — pay attention to how they or their families are going to pay the bill.
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That cost-blindness may once have been justified. The longstanding presumption was that colleges would make it financially possible anyone who was accepted to attend. But nowadays financial aid has become less predictable. Financial aid offers, "are now more recruiting pieces than public service documents," said Lloyd Thacker, founder of the Education Conservancy and author of Colleges Unranked. Schools often show more generosity to the most desirable candidates, not those who need the money the most.
As a result, students lucky enough get into several schools may have to consider not only which college is the best, but which is the best deal. That means discussing what the student wants out of a university education and how much the family is willing to support those goals. "People don't talk about this early enough or often enough," said Thacker.
Rita Cheng, a financial adviser with Ameriprise Financial in Bethesda, Md., said many of her clients begin their college planning when their first child is born, but still find themselves facing difficult questions about their values and their children's identities only when the acceptances arrive. "Everything feels so rushed," said Cheng.
Nevertheless, Cheng advises parents to take the time to ask whether what their children want to study, and where, really reflect their strengths. "You need to come up with a positioning statement," she said. "School is all about fit."
The first step in making a decision, of course, is to compare what each school is offering. A financial aid package will be broken down into outright grants, which aren't expected to be paid back, as well as loans from various sources, each with their own rules.
"Make sure you understand how much you'll be borrowing," said Thacker, "at what rate, how many years you have to pay it back, and when you have to start paying it back."
When in doubt, call the admissions office. Ask whether the aid is guaranteed for all four years or is front-loaded to get you to commit. It's even fair to inquire whether they can do better. The school may not have understood all of your family's circumstances or may be willing to match another offer. "Things are getting more transparent," said Cheng, "but you have to negotiate and be an advocate."
You should also be prepared to negotiate with your child, acting as an advocate for your long-term financial plan. Cheng cited a couple who had enough in their 529 college savings plan to pay for state school for each of their two children. When the older child elected to go to a private college, the parents agreed to pay the equivalent of in-state tuition at the state school, leaving their child to make up the difference in work-study and a federal direct loan.
Other parents resort to something closer to bribery, tempting their kids to attend the local state university if mom and dad buy them a car. Another of Cheng's clients made a less stark bargain with a child who was accepted to two engineering schools, one more affordable than the other. They persuaded him to take the cheaper offer in return for a promise to pay for graduate school, a necessity for his intended career.
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Thacker sees problems with the most benevolent monetary inducements. Making deals for graduate school tuition, for instance, can hamper one of the basic functions of college, to help young people figure out what they want to do. "Did you know what you wanted to do when you were a freshman in college?" he asked. "More people lose doing that than win."
"Making a college decision is not like buying a car," Thacker said. "It's an investment in an opportunity."
Instead, Thacker said, challenge your budding scholar. If you can afford to foot the bill for your kid's dream school, do so in return for a commitment to study hard. "Ask, 'What can we expect from you in terms of working?" said Thacker. "Where you go, over the next 10 years, isn't as important as what you did there."
Cheng agrees that a committed student, by being more likely to finish in the minimum time, is also likely to be the cheapest. An extra semester or two of tuition, room and board, will quickly cancel out what you might have saved by sending them to a school they didn't like. "The best thing you can do for your child, and your wallet, is help them graduate in four years," said Cheng.