- Once you know the school's
full cost of attendance at each institution to
which you're applying, that might include
tuition, room and board, student fees, transportation, books, how then do you compare
costs of each institution side by side? You would think that
you would just look at the sticker price and that
would make it easy to compare but unfortunately, it's
not as easy as that. One of the things that you
really need to look at first is how long does it take to
graduate from each institution on your list? Unfortunately, as college
costs have risen precipitously over the last two or three decades, schools have done an increasingly poor job at getting students out of school within that four traditional time period that it would take to graduate. In fact, nationally, the statistic is that in public universities and colleges, 68% of students fail to
graduate within four years and 44% of students fail to
graduate within six years, okay? So, looking at that, you
have to say to yourself, is there an additional cost
associated with not finishing college within four years? And of course that cost can be very large. There's two components to that cost. Cost number one is you or your
parents are going to have to pay an extra year cost of
attendance, so extra tuition, room and board, et cetera,
but there's an additional cost and this is the cost that
students and families don't think about when they're
deciding about which school they're going to attend and
that cost is the opportunity cost of not being in the workforce while you're in school an additional year. So, if we assume that an
average starting salary for a college graduate these
days is about $50,000 dollars, not only are you losing potentially 25, up to $65,000 dollars of
additional associated tuition room and board and fees but
you are also losing a year in the workforce where you could be earing about $50,000 dollars. So, all together, the cost of
an additional year in school can be up to $100,000 dollars or more. So, the next thing you
need to really look at when analyzing college costs is what is the average percentage of
demonstrated financial need that each school on your list meets? So, you would think
that schools would meet any costs above your
expected family contribution and unfortunately, that's not the case. In fact, there are only
about 60 to 65 schools in the country that meet
your entire demonstrated financial need, so that
means at most schools, you will end up paying
not only your expected family contribution but
you will end up paying your unmet need as well. So, how do you find the
average percentage of need met statistic for each school? Fortunately, there's a
wonderful little website called collegedata.com,
it's a free website, and on that website you
can search for each school on your list and then go
to the Money Matters tab for each school and you will find there the average percentage of
need met for each institution. Okay, so the next thing
you need to look at which can also be found on collegedata.com is the form this need based assistance is going to come in for each
school on your list, right? So, is it gonna come in the
form of grants and scholarships which is essentially free money that you don't have to pay back or is it going to come in
the form of what we call self-help aid which is loans,
it could be student loans, it could be parent loans,
that you have to pay back at interest, right? So, let's look at University
of Colorado at Boulder which is a large public institution. And as I scroll down here, I can look, I wanna look at the profile
of 2014, 15 financial aid. And you'll see down under freshman, you'll see the average
percentage of need met there which was the first question we asked is about 81% and then beneath that, we have the average award
and the average award at Boulder is almost
$16,000 dollars per year and then under that, we
can look at what form that award money comes in and you
can see the first category is the need based gift that
is grants and scholarships, free money, and you can
see that about 77.8% of Boulder Freshmen
received a need based gift in the average of an amount
of about $11,000 dollars. Then you can also look at
what the average need based self-help amount is for
entering freshmen at Boulder. That self-help aid was received
by 88.5% of aid recipients for an average amount
of about $5,813 dollars. Beneath that, you can
see what merit-based aid is given to the average
freshmen and only about 4.2% of the entering freshmen
at Boulder are receiving any kind of merit-based
gift and the average amount there listed is $9,676 dollars. So, one of the things you
really wanna do when you look at this college data website
is to compare the data for freshmen with the data
for all undergraduates because what you'll find
occasionally is a school that I call a bait and switch school where they're gonna give
more money away to freshmen than they do to the rest
of their undergraduates in order to attract the
freshmen to the school and then once you're there,
they give you less aid. So, what you really wanna
use College Data for is to figure out the percentage
of aid that's coming in the form of free money
versus the percentage that is going to come in
the form of mostly loans from each of the schools on your list. In addition to need
based gifts or need based self-help amounts, you may be
eligible for what is called merit aid or on College Data
it's called non-need based aid. And this is money usually
in the form of grants or scholarships that is
given away to students that a specific college or university wants to attract based on their academic or extracurricular merit. If you are ineligible for need-based aid, merit aid or non-need
based aid is the only form of assistance you may receive. If you're eligible for need-based aid, you could receive a
combination of need-based aid and non-need based aid. Now, most schools will
give some merit away to students, some merit
money away to students that they want to attract. However, there are about
25 schools in the country including all the Ivy leagues, Stanford, Swarthmore,
Williams, Amherst, et cetera, who don't give any merit aid away at all to any of their freshmen students. So, in these cases, if you do not qualify for need-based aid, you will
be paying the full price tag at the schools whereas at other schools, you might be receiving
some merit-based assistance to get you to come there
which you can kind of think of as a tuition discount. Okay, to sum up, there are
four things you need to look at when comparing the costs
of college education institution by institution. Firstly, what is the
average time that it takes to graduate from each school on your list? Secondly, what is the
average percentage of need that each school on your list meets? Thirdly, what is the
form that that assistance is going to come in? Is it going to come in the form of loans that you have to pay back? Or is it gonna come in
the form of free money? And fourthly, what kinds of merit aid or non-need based aid is each institution going to give you?