What Type of College CAN You Afford?

By Quetzal Mama • September 29, 2017

This month’s article is definitely not a canned response about college affordability. LOL, isn’t it uncanny, how corny Quetzal Mama can be? In my mind, the truth about college costs can be summed up with an analogy to cans. Seriously? Yep, just check out this easy matrix to help you understand how funding works at different types of colleges. Can you dig it? I knew you could.

This tiny can of El Pato sauce represents the type of aid available at many public, 4-year state colleges. The can is small because the amount of aid provided to students is very limited. Financial aid is limited to what the Federal and State government doles out, and is given to students with greatest financial need using a prescribed formula. State aid is limited to Cal Grants, as well as potential grants offered through the university. Federal aid is limited to students who qualify for Federal Pell Grants, Supplemental Education Opportunity Grants, and Work Study. And, there are loans. Generally, these publicly funded, state universities do not have big endowments to offer lucrative or “full ride” scholarships. For more information on California State University Financial Aid Programs, go here.

Taking it up a notch, this can of Bustelo (my fav!) represents top tier public universities. Think University of California. While these campuses follow prescribed Federal and State formulas for doling out aid, they also have discretionary grants and scholarships. This is referred to as "gift aid" because it's a gift (you don't have to pay it back). And, each campus has discretion as to whom they wish to dole out gift aid. For example, the same student could receive a "full ride" from Berkeley, but not from UCLA. Or, a student might get compelling grants or scholarships from Davis, but not Riverside. The University of California also offers the Blue & Gold Opportunity Plan. For families with annual income of less than $80,000, their student will not pay tuition and fees! For families with income and assets under $165,000, they qualify for the Middle Class Scholarship Program. Learn more about the University of California aid programs here.

Now we bring in the big guns. This gigantic can of Juanita’s Hominy represents the huge endowments of highly selective campuses. We’re talking Ivies and other competitive private colleges like Stanford, Duke, Georgetown, or MIT. An endowment is a pool of money donated to a college, for use in various things including financial aid. How much is in an endowment? Harvard’s 2017 endowment is $37.1 billion. Yeah, billion. Stanford’s endowment is 22.4 billion. There are approximately 90 colleges with endowments valued at more than $1 billion. Top 10 colleges with largest endowments here. What does this have to do with your college affordability? It means if you’re admitted to a highly selective school with a large endowment, your costs to attend will be very low, if not free. And, because they have this huge pool of money, they can offer “full rides” to students who are not necessarily low income (aka “Merit Based Aid”). More discretion and more money means better financial aid perks for you!

Now that we can move beyond various types of aid offered at different colleges, what about for-profit colleges? There are many "For Profit" colleges that offer 4-year degree programs. Some include University of Phoenix, National, Walden, etc. But, many of these for-profit institutions are similar to an Arcoiris cookie. At first, they seem really appealing. But beware! After a few bites, you realize the all-sugar, air-infused marshmallows leave you feeling very dissatisfied. It's because most of their students receive the majority of their aid from LOANS! Quoting from the US News & World Report, "Nearly 90 percent of 2012 for-profit graduates had student loans, with the average debt among for-profit college graduates who borrowed reaching nearly $40,000." Ouch! Fortunately for you, for-profit colleges are required to publish their tuition and fees, financial aid offerings, as well as graduation and retention rates on their websites. For example, you can see the latest University of Phoenix stats right here.

Regardless of the type of college you apply, always look at your bottom line. Your goal is to get out with as little debt as possible. Do what you need to get the truth and facts, and not a canned statement by going to reputable sites. Start at the Department of Education’s “Net Price Calculator Center” site or follow this super intuitive (fast and easy) program to find out your true college costs. Then, get debt and loan repayment information at College Results Online. Next, you might want to compare and contrast campuses at the Consumer Financial Protection Bureau. Finally, use the College Scorecard for advanced searches like graduation rates and salary after attending.

Once you’ve determined your shortlist of campuses, and are ready to begin writing your Personal Statements, don’t forget your copy of Quetzal Mama’s award-winning book, “Nailed It!” – the toolkit to write extraordinary college essays! Buena Suerte!