January 1 marks more than the New Year for families with a child headed off to college in the fall. It is also the date that the Free Application for Federal Student Aid (FAFSA) becomes available, prompting families to consider in earnest how the money aspect of college admissions will play out. Whole books and Web sites are devoted to the ins and outs of the daunting financial aid process, but little guidance is designed especially for the financial aid concerns of families of gifted students. As parents and students sit down with all the figures and forms, there are some tips to keep in mind.
Mark Kantrowitz is the publisher of Finaid.org, a Web site devoted to the many facets of college financial aid, and Fastweb.org, an online scholarship search program. He also has authored two books, including Secrets to Winning a Scholarship. He points to some of the misconceptions commonly held by college applicants. “Even among the most talented students,” Kantrowitz writes, “families underestimate their need-based eligibility and over-estimate their meritbased eligibility.” He insists that every family should “always file the FAFSA,” even when that family has been determined to be too wealthy for need-based aid in the past. One reason to do so is that the family gains access to lower-interestrate federal loans only through the FAFSA. Another is that families with a second child in college will see their per-child Expected Family Contribution (EFC)—the amount determined that a family can afford to contribute to the child’s college costs—drop by as much as half.
Deciphering Individual College Policies, Packages, and Statistics
Starting in 2011, a lot more transparency was introduced into college financial aid programs, according to Lynn O’Shaughnessy, financial journalist and author of The College Solution and the blog of the same title. Federal law now requires every college to include on its Web site a net price calculator. This tool prompts parents to feed in specific financial information, such as income, savings, and number of dependents—the major elements factored into the formula to determine aid eligibility at that school. (The information is not transmitted to the school.) The program immediately calculates an approximate net price, or final price after school grants, that that family likely would be expected to pay.
“Half of parents assume price tag is meaningful,” O’Shaughnessy writes, referring to a study by the College Board. Net price calculators give parents an idea of how much need-based aid they may qualify for. The calculators vary in their precision, though. Some probe deep with several dozen questions to provide a more accurate read. Some even will indicate possible merit aid award levels. “The more questions a calculator asks, the more accurate the net price will be,” Kantrowitz explains. Because of the risk of imprecision, Kantrowitz asserts, “Don’t use net price calculators to rule out a college but maybe to add one to your list.” Kantrowitz also cautions that the results page may emphasize a low price after loans and work study are deducted but that families should focus on the true net price—the cost after grants alone are deducted.
Not all colleges make the net price calculator easy to find, but by law it has to be on the Web site. If it isn’t easy to locate on the school’s financial aid page, students can type “net price calculator” into the search box of the school’s Web site.
As for merit aid, bright students who are strong candidates for college-based scholarships should investigate closely the renewal criteria. Families may be dazzled by the honor and dollar figure of a substantial scholarship but overlook the fine print stating that it is a one-year award. Students needing those funds all four years should make sure the scholarship is renewable; they also should review carefully the requirements for renewal. Is there a grace period during freshman year to allow the student to adjust to college life? Is the GPA requirement realistic, or might the student be faced with higher bills in later years because he or she couldn’t make the grades?
Kantrowitz also encourages families to ask the college whether it practices front-loading of grants, as half of them do. This practice involves giving a higher grant award for freshman year; then, once the student is enrolled and has begun her studies at that school, the grant award in the second year and later is much lower, with the expectation that the student will fill the void with loans. If a school’s financial aid office is evasive when asked about front-loading, Kantrowitz recommends asking a few upperclassmen about how consistent their grant awards have been every year.
Another policy that varies by institution is the treatment of outside scholarships, which may be a factor for bright students. “Ask schools how they handle deducting outside scholarships from need-based aid packages,” O’Shaughnessy advises. “Will it come from loans and work study or from grant aid?” Eighty percent of colleges first reduce loans and then contributions from student work earnings before cutting into grants, Kantrowitz notes. But it is worth checking. Macalester College, for example, has an intricate formula whereby loans are reduced for the first $500 of an outside scholarship but any amount above that amount is taken equally from the college grant and loans. The school’s Web site gives the example of a $2,000 outside scholarship that reduces the student’s grant by $750. On the other hand, Macalester is one of a few dozen schools that meet 100% of demonstrated need, so its grants may be more generous to begin with.
A few schools meet 100% of demonstrated need without any loans packaged in, just grant aid that does not have to be repaid. At these schools, Kantrowitz says, “the net price often is less than in-state public college. It’s worth applying, although it’s difficult to get in.”
O’Shaughnessy emphasizes the importance of finding a good college fit as a sound financial strategy. “It shouldn’t be just a dozen schools that you go to if you’re supersmart,” she says. She suggests that the personal attention available at many liberal arts colleges may be attractive to some gifted learners. “It doesn’t matter how smart a kid is, if they pick a school that’s not good for them, and they leave,” says O’Shaughnessy. Some credits may not transfer to the new school, she explains, and the student may end up spending an additional costly year in school. Another consideration for bright learners counting on their merit aid award is that,sat most schools, very few scholarships are available for transfer students; a student who has to change schools will sacrifice the lucrative college scholarship he or she was awarded as a freshman. One step families can take, O’Shaughnessy advises, is to look up the school’s freshman retention rate on a site like CollegeResults.org. A figure in the upper 90s indicates that students are happy at the school.
Finally, O’Shaughnessy suggests that families look at the graduation rates of various schools. “You don’t want to be there more than four years,” she says. Gifted students may dismiss low graduation rates, thinking that they are bright enough and driven enough to stay on schedule. But low graduation rates may indicate an institutional issue that is beyond any individual student’s control. “At [some] state schools, it doesn’t matter how smart you are,” O’Shaughnessy clarifies. “They don’t have the resources; kids are not getting classes they need to graduate.” One workaround for bright students to investigate is whether students in the school’s honors program get priority at registration time.
There are some students—and some parents—for whom the Ivy League is a longtime goal. Actually diving into the college application process can be a shock for some of those families. One surprise may be that single-digit admission rates mean that these schools—and other elite schools beyond the Ivy League—reject a whole assortment of kids who were valedictorian, scored perfect SATs, or became National Merit finalists. The second stunner is financial: these schools do not award scholarships. “All of their students have merit,” Kantrowitz reasons. However, he points out that these schools’ generous need-based aid policies, enabling middle-class families to afford to send their children, results in a de facto scholarship situation. Instead of winning a scholarship per se, the student with even modest need who wins admission to one of these schools is awarded grants that in the end serve the same purpose as a scholarship. For example, Harvard’s Web site describes its program: “Families with incomes up to $150,000 will have an average expected parent contribution of 10 percent or less of their income and . . . many families in even higher income brackets also receive substantive financial aid.”
Both getting into highly selective schools and winning private scholarships hinge not on being well-rounded but on “having a few key strengths,” Kantrowitz explains. Even though he cites the statistic that less than 0.3% of students get scholarships that cover their total college cost, he nevertheless encourages students to “apply for every scholarship for which you’re eligible. The students who win a gazillion dollars submitted everything.” Besides, Kantrowitz adds, winning even a small scholarship adds a line to a student’s resume and indicates to others doling out funds that someone considered this student worth investing in.
Gifted students certainly have their academic, creative, or artistic talents with which to vie for scholarships, but in the world of private scholarships, other characteristics can be assets too. That is why Kantrowitz insists that students answer every optional question on a scholarship search site, such as Fastweb.org. For example, he says, there are two optional questions in the profile relating to a history of cancer with either the student or a family member. There are a few dozen scholarships available to students touched by cancer, but those results will not be generated for a student who has not indicated that history in the optional questions.
When it comes to snagging private scholarships, Kantrowitz reveals, “It’s not just based on skill. There’s an element of luck.” To keep luck on his or her side, he explained, a student must follow carefully the instructions, which are “there to winnow the field.”
One major scholarship that academically gifted students tend to be the strongest candidates for is National Merit, earned through a process based primarily on scoring in the top 1% in the state on the junior year administration of the PSAT. Some parents read the materials distributed by National Merit in advance of the test and are dismayed to learn their scholarship amounts to a mere $2,500 one-time award. They wonder what all the hype is about and determine that, in the whole scheme of college expenses, the scholarship is not worth any particular effort on the PSAT. Some parents— and even principals, school counselors, and teachers—remain unaware that some colleges independently offer lucrative packages to National Merit finalists. For example, the University of Kentucky’s Web site outlines its Patterson Scholarship, awarded to National Merit finalists: “A four-year renewable scholarship, valued at . . . $112,000 for non-resident students, and includes the following: tuition, basic room and board allowance, $1,000 yearly stipend, an iPad®, and $2,000 for a Summer Education Abroad program,” plus a $2,000 one-time award through the National Merit Scholarship Corporation. These packages tend to be offered at large, moderately selective schools, and in most cases the scholarships are automatic with National Merit finalist status and designation by spring that the school is the student’s first choice.
Another major consideration for scholarships that gifted students wrestle with is early decision (ED). Since ED is binding—a student commits to attending that school if he or she is accepted—the fear is that schools that know they already have a strong student committed to attending will not offer the same big merit scholarships that they would if they had to compete against other schools to lure the student during regular decision (RD). Students with a clear first choice struggle, since at many schools, ED admission rates are higher than RD, but they need big scholarships. Kantrowitz offers the reassurance that research indicates “no credible evidence of bias against merit aid [in ED]. There is some evidence of greater merit aid in ED.” He enumerated both the greater availability of funds early and the selection bias toward an overall stronger applicant pool for ED as likely reasons. Another small consideration, Kantrowitz adds, is that some schools can approach ED from a needblind standpoint and then, with limited remaining funds, must become need-sensitive for RD.
The Big Picture
The experts’ parting advice applies to all college applicants, but their wisdom merits special attention from gifted students and their families. O’Shaughnessy shares the insight that college reps tend to have only limited knowledge of the nuances of their own school’s financial aid policies and resources. Consumers would do well to educate themselves from publicly available resources and call the college’s financial aid office for answers to specific financial aid questions. Meanwhile, Kantrowitz stresses the importance of a range of schools not only from an admissions standpoint but also from a financial one: “I recommend a financial aid safety school, just to cover all your bases. And by that I mean a school you can afford with no help at all.”
Forms and EFC Resources
Free Application for Federal Student Aid: https://fafsa.ed.gov/ (Note: Be sure to use the .gov Web site, not an imposter site.) On the site, each parent and the student need to apply for a PIN, which they receive immediately. Then the family inputs financial data, some of which can be imported automatically from IRS data. Calculations are done immediately to yield a preliminary Expected Family Contribution (EFC). This form becomes available January 1 each year, and most colleges require its completion sometime in February or March. Most experts recommend completing the form as early as possible, as some schools simply run out of financial aid funds later in the process. You can submit updates later once you file your taxes.
FAFSA4caster: https://studentaid.ed.gov/sa/fafsa/estimate Use this free tool to predict your federal EFC and federal aid eligibility before completing the actual FAFSA. Check here several years in advance to begin to get a sense of what college will cost your family.
CSS/Financial Aid PROFILE: https://student.collegeboard.org/css-financial-aid-profile This additional application form is required by some private and a few public colleges. It goes into more depth than the FAFSA, including forms for a noncustodial divorced parent. This form uses the institutional methodology by which each college adjusts various aspects of the formula to meet its own financial aid priorities. (For example, some schools factor in home equity, while others may not.) Available October 1 each year, this form requires a fee for each college you designate to receive your data. The fee is waived for lowincome families based on data submitted on the application.
College Board Calculator: https://bigfuture.collegeboard.org/pay-for-college/college-costs/college-costs-calculator
Resources for Finding and Winning Scholarships
Secrets to Winning a Scholarship by Mark Kantrowitz, 2011. $9.95 paperback, $4.76 Kindle This handbook addresses the realities of private scholarships: who gets them, how much they get, how to find them, and how to apply to win them. The thorough guidance on writing scholarship application essays also applies to college application essays.
http://www.fastweb.com/ Among other features on this site is its scholarship search engine. Be sure to answer all optional questions to yield results that include all scholarships for which you qualify.
http://www.finaid.org/ This thorough site has loads of information related to college financing, including loans, saving, applications, and various calculators.
Financial Aid Resources
Free Application for Federal Student Aid: https://fafsa.ed.gov/
CSS/Financial Aid PROFILE: https://student.collegeboard.org/css-financial-aid-profile
Secrets to Winning a Scholarship by Mark Kantrowitz (2011). $9.95 paperback, $4.76 Kindle
Resources for Understanding the Process and Maximizing Results
Paying for College without Going Broke by Kalman A. Chany with Geoff Martz (Princeton Review), (2013 ed.) $20.00, Paperback This is a great nuts-and-bolts guide for getting through the financial aid process. It includes line-by-line information on how to fill out the FAFSA and PROFILE forms as well as a helpful discussion on student loan considerations and appealing to financial aid offers. The College Board no longer shares the details of its institutional methodology, so consult the 2010 edition of this book for the last available specifics.
The College Solution: A Guide for Everyone Looking for the Right School at the Right Price by Lynn O’Shaughnessy (2nd ed., 2012.) $24.99 paperback, $8.79 Kindle O’Shaughnessy encourages families to expand their college search, guiding them in identifying schools that are more generous with both need-based and merit aid. She offers insights into how and why colleges offer aid to enable students to become more attractive applicants and to garner larger aid packages.
The College Solution blog: http://www.thecollegesolution.com/welcome Focusing frequently on the financial side of the college search process, O’Shaughnessy addresses topical issues several times a week.
Shrinking the Cost of College workbook. This book offers step-by-step tips on scholarships, financial aid, seeing beyond college sticker price, comparing costs among colleges, saving on out-of-state tuition, and negotiating a better financial aid package.
Anne Flick, a GIS and former gifted coordinator, holds a master’s degree in gifted education. She serves families and schools as an educational con- sultant specializing in gifted education. She has presented at national and state conferences as well as to local parent groups.
Permission to reprint this article has been granted to The Davidson Institute by the Ohio Association for Gifted Children (OAGC) and the author.
This article is provided as a service of the Davidson Institute for Talent Development, a 501(c)3 nonprofit dedicated to supporting profoundly gifted young people 18 and under. To learn more about the Davidson Institute’s programs, please visit www.DavidsonGifted.org.
The appearance of any information in the Davidson Institute's Database does not imply an endorsement by, or any affiliation with, the Davidson Institute. All information presented is for informational purposes only and is solely the opinion of and the responsibility of the author. Although reasonable effort is made to present accurate information, the Davidson Institute makes no guarantees of any kind, including as to accuracy or completeness. Use of such information is at the sole risk of the reader.