Never overpay for college

Myth of the Availability of Merit-Based Aid

MeritCollege recruiters are in a sense like parents of small children. In order to get their children to behave, act in a certain manner or perform a sometimes very simple task, an award is offered. Take away the award and many children, through no fault of their own, are less likely to follow directions or put their best foot forward.

College recruiters also have to focus on rewards to earn as many applications from their targeted student body as possible. Competition and put bluntly, asinine prices for colleges in the United States drives the need to come up with ways to motivate students to apply.

One way in which recruiters and high school guidance counselors can push schools is through the allure of merit-based aid or money provided from the college based upon an applicant’s academic profile. SAT’s and ACT’s are the easiest way to identify and also eliminate students from the ability to tap into these scholarships.

Student’s should certainly take the test(s) very seriously and aim to score as high as possible but promises of merit-based aid should be taken with a grain of salt. Earning money for school varies based upon each university but counting on merit-based aid is like taking candy from a baby. Nobody wins and tears are likely.

According to the National Center for Education Statistics, over 21 million students will attend college in the fall of 2014. Take ¼ of those students, which is considerably smaller than the number of students that will apply for a four-year school, and that means over 5.25 million students are competing for scholarship money.

National Merit Scholarships are perhaps the most known form of merit based aid available and only a very select few earn these scholarships (known as National Merit Scholars). The number is so small in fact that the scholar class of 2013 had exactly 8,635 members (per the National Merit Annual Report). I’m far from a math major but that’s not exactly great odds for even a straight A student with excellent test scores.

Furthermore, the specific pool of money for schools that offer merit based aid is also difficult to acquire. Top students based often on test scores and GPA receive these scholarships and aid is sometimes reserved for people of a specific group of people (i.e. a grant earmarked for a specific area of the country, field of student or ethnic persuasion).

This is not to say that some schools do not offer merit-based scholarships for students outside the top 2-3% of applicants but these awards are often range from a few hundred to the $2,500 range. Considering that the average college cost for a four-year degree program is over 100K, these scholarships aren’t making any real impact.

Bottom line: The vast majority of students should not consider or very minimally consider merit-based aid as an option for lowering the burden of the cost of college. This kind of information may make families cringe but it is the kind of honesty that one would hope parents receive from a guidance counselor or college recruiter.

Reward-based compliance makes sense for a period of time with small children but good parents cannot and do not incentivize forever. For high school students thinking about college, it’s never too soon to focus on reality, regardless of how harsh the lesson may be.

*Ivy League schools and a plethora of other top universities offer up to meet up to 100% of a family’s financial need but do not offer merit-based aid at all. With the strength of the applicants it is essentially merit enough to earn acceptance and thus these schools do not choose to provide merit based aid.