MONEY College

How to Decipher a Financial Aid Letter

magnifying glass over $5 in dark
Alamy—Alamy

The financial aid letters that colleges send accepted students are often confusing. Here's how to figure out how much a school will really cost.

When colleges start releasing their admissions decisions toward the end of March, it’s easy for applicants and their parents to figure out the end result: You’re in, you’re out, or you’re on the waiting list.

Unfortunately, when those same schools release their financial aid decisions for accepted students, the results aren’t quite so clear.

Over the years that I’ve worked with families as an independent college admissions counselor, I’ve learned that the financial aid letters that arrive in the mail can be terribly confusing. Parents’ sweat turns icy cold as they try to figure out which college offers the best deal. It takes some work to decipher exactly how much help a family is being offered.

The first step for families trying to assess financial aid packages from different schools is to separate “family money” from “other people’s money.” This process helps focus the mind — and the budget — on forms of financial aid that truly reduce the overall cost of a college education.

Each college provides a total Cost of Attendance — the educational equivalent of the manufacturer’s suggested retail price. The COA includes tuition, fees, room, board, a travel allowance, and a bit of spending money that is somewhat randomly determined by the director of financial aid.

Generally, I find these estimates a bit low, so I encourage families to think about these variable expenditures — things like travel, pizza, cell phones, and dorm furnishings — and come up with a more realistic figure. Then I put these figures into a spreadsheet so that we can see how the starting price tags of similar colleges can vary widely.

Then we tally up the “other people’s money” in the financial aid letter — grants and scholarships with no strings attached. OPM reduces the bottom-line cost of a college education.

Throughout the college selection and application process, I like to help my families zero in on those schools that will be most generous. Assuming all has gone well, a good student may receive 50% or more off the price of tuition. That can be a good chunk of change.

Once we’ve subtracted the OPM from the COA, then we look at the part of the financial aid award that’s dressed up as “aid” …but is really just the family’s money in disguise.

This gussied-up aid comes in two forms. First is work-study aid, which is merely an expectation of a kid’s sweat equity in the coming years. Work-study aid is family money that doesn’t yet exist.

Then there are the loans. Generally, I won’t let my clients borrow more than the maximum that the government will lend to the student directly. These are the federal loans that max out at $27,000 for a 4-year undergraduate education.

Armed with all this information, we then create a spreadsheet to line up the different COA prices and subtract the OPM. That helps us arrive at a total cost of the education to the family — including both the immediate costs and the subsequent costs in the form of either future employment or loans that will have to be repaid.

And if we really want to get down and dirty, we can add the cost of interest over the life of those loans to illustrate exactly how much that college education will cost.

Unless the family has front-loaded the process by picking schools that are likely to maximize the grants and scholarships, I’ve found that most families are taken aback by the cost of college.

But with strong planning and a realistic look at the numbers, families can make wiser long-term financial decisions.

For example, a family I worked with a few years back made the painful but smart decision not to send their daughter to Notre Dame, which offered her nothing in scholarship aid, but to choose Loyola University of Maryland, which with a lower COA and hefty scholarship saved the family over $100,000 for her bachelor’s degree.

The family had money left over to buy their daughter a nice used car, cover expenses for a great summer internship in New York, and subsidize a spring-break service trip to New Orleans. And the young woman graduated from college debt-free.

As parents of college-bound seniors suddenly realize this time of year, a college education is not priceless. A cold, hard look at the numbers makes the price very clear, and enables a family to make the most reasonable financial decision possible.

———-

Mark A. Montgomery, Ph.D., is an independent college admissions consultant. He advises families around the country on setting winning strategies for both admissions and financial aid. He also speaks to schools and civic groups nationwide about how to choose, and get into, the right college. His firm, Montgomery Educational Consulting, has offices in Colorado and New Jersey.

MONEY College

The 50 Best Private Colleges for Earning Your Degree On Time

150316_FF_FastestDegree
iStock

There aren't many "super seniors" at these private schools, where almost every student earns a bachelor's degree in just four years—and avoids the high cost of a longer stay.

Paying four years’ worth of college tuition is hard enough. But too many parents and students don’t realize that there’s a good chance they’ll have to pay for five, since 45% of full-time students need at least an extra year of school to earn a bachelor’s degree, according to Judith Scott-Clayton, an economist at Teachers College, Columbia University.

That common miscalculation can be “devastating” to a family’s finances, says Jim Briggs, a founder of Reducing College Costs, a private financial aid consulting firm. Since an extra year at a private college can easily cost more than $50,000 these days, “we are talking about a lot of money,” Briggs adds.

Before committing to a college, you should check the four-year graduation rate with the U.S. Department of Education. If the rate is low, ask the college and some students why that is, Briggs advises.

While students themselves cause many delays—by flunking required courses or changing majors late in their college careers—some schools do an especially good job of helping students get the courses they need to finish up in four years, saving parents that unpleasant surprise of a fifth year’s worth of bills, Briggs says.

At these 50 private colleges, you’ll have the best chance of graduating on time. At all of them, the average student graduates in 4 to 4.1 years, and more than 80% of the student body earns a bachelor’s degree within those four years. This list, ranked by four-year graduation rate, also includes Money’s best college values ranking and our estimate of how much the degree will cost if you get the typical amount of financial aid.

Your net cost will be lower if you take advantage of, say, federal education tax credits, or if you receive scholarships from private organizations or federal, state, or local government agencies. It will be higher if you don’t receive any financial aid.

College State Money ranking % of freshmen who earn a bachelor’s in 4 years Estimated average net cost of a degree for class of 2019
1) Pomona College CA 50 93% $167,662
2) Haverford College PA 122 91% $187,297
3) Yale University CT 15 90% $188,279
4) University of Notre Dame IN 20 90% $190,073
5) Williams College MA 14 90% $173,630
6) Carleton College MN 79 90% $183,529
7) Davidson College NC 72 90% $170,095
8) Vassar College NY 129 90% $159,658
9) Hamilton College NY 101 90% $187,252
10) Amherst College MA 17 89% $161,350
11) Boston College MA 122 89% $207,603
12) College of the Holy Cross MA 101 89% $191,814
13) Colby College ME 86 89% $195,668
14) Swarthmore College PA 32 89% $180,033
15) Georgetown University DC 37 88% $210,612
16) University of Chicago IL 101 88% $194,477
17) Bowdoin College ME 44 88% $185,213
18) Bates College ME 150 88% $199,275
19) Washington University in St Louis MO 62 88% $218,216
20) Princeton University NJ 4 88% $150,602
21) University of Pennsylvania PA 11 88% $207,659
22) Harvard University MA 6 87% $186,658
23) Tufts University MA 72 87% $207,047
24) Johns Hopkins University MD 107 87% $216,263
25) Duke University NC 32 87% $198,588
26) Dartmouth College NH 24 87% $194,752
27) Cornell University NY 24 87% $200,157
28) Colgate University NY 27 87% $192,119
29) Bucknell University PA 45 87% $204,082
30) Vanderbilt University TN 50 87% $165,615
31) Middlebury College VT 47 87% $208,897
32) Harvey Mudd College CA 7 86% $193,324
33) Wesleyan University CT 169 86% $199,874
34) Northwestern University IL 129 86% $206,162
35) Brandeis University MA 248 86% $197,555
36) Columbia University in the City of New York NY 22 86% $212,954
37) Kenyon College OH 94 86% $196,119
38) Villanova University PA 114 86% $202,283
39) Washington and Lee University VA 39 86% $153,859
40) Macalester College MN 214 85% $143,259
41) Lafayette College PA 28 85% $183,806
42) Claremont McKenna College CA 47 84% $202,642
43) Emory University GA 156 84% $217,059
44) Babson College MA 1 84% $204,884
45) Massachusetts Institute of Technology MA 3 84% $159,316
46) Wellesley College MA 95 84% $170,844
47) Franklin and Marshall College PA 248 84% $196,727
48) Brown University RI 19 84% $197,789
49) Occidental College CA 285 83% $191,630
50) St Olaf College MN 359 83% $139,836
MONEY College

The 10 Colleges With the Most Generous Financial Aid

Vanderbilt University
courtesy of Vanderbilt University At Vanderbilt University, the average merit award tops $20,000.

These top schools offer enough money to cover students' financial needs—and hand out award ample merit grants to high achievers too.

If you need a lot of financial help to pay for college, you’ll have much better odds at a schools that has a generous aid budget.

Unfortunately, these days that’s a small group. The average college provides only enough scholarships or grants to meet 70% of what low- and moderate-income students need to pay the bills, according to data provided by the colleges to Peterson’s.

In all, only 64 colleges in the country say they hand out enough aid to meet the full demonstrated financial need of every regularly admitted undergraduate, according to Peterson’s data. And many members of that elite group, including schools in the Ivy League, don’t provide a penny in merit scholarships. That means no scholarships to students who don’t qualify for need-based aid, no matter their academic achievements.

So Money crunched financial-aid data to find the 10 schools on our Best College Values list that not only provide 100% of the scholarship money they think you need, but also have large merit-aid budgets to help high-achieving, wealthier students.

It’s important, however, to be realistic about what’s “generous.” When colleges say they “meet full demonstrated need,” that doesn’t mean they give everybody full-tuition scholarships. Colleges first calculate how much they think your family can afford to pay (also known as the “expected family contribution”), using the financial information you provide on the FAFSA or the College Board’s CSS/Financial Aid Profile.

On top of that number, many colleges add an expectation that students will take out loans and earn a few thousand dollars a year. The difference between the total expected student and parent contribution and the cost of the college is your “need.” That’s the amount that the most generous colleges will provide in need-based scholarships. Merit scholarships are awarded without regard to your family’s financial situation. (For tips on how to appeal for additional aid, click here.)

School Money rank Avg. est. total family education-related debt Est. average net price of a degree % of students who get merit awards Average merit grant
Vanderbilt University 49 $6,649 $160,791 10% $23,789
Rice University 20 $8,447 $149,851 15% $11,833
Duke University 32 $9,694 $192,804 12% $19,823
Davidson College 72 $10,842 $165,141 6% $22,246
Grinnell College 144 $11,325 $123,981 15% $15,093
University of Chicago 106 $12,986 $188,813 17% $10,205
Kenyon College 94 $13,313 $190,407 13% $13,040
University of Richmond 120 $14,317 $157,221 16% $23,300
Washington and Lee University 39 $15,270 $149,377 8% $35,060
Harvey Mudd College 7 $17,736 $187,694 20% $9,743

Notes: Average total estimated debt is federal student debt and parent Plus loan borrowing per graduating senior; net price for freshman starting in the fall of 2014.

Sources: Peterson’s, U.S. Department of Education, Money calculations.

MONEY College

How to Land More Money to Pay for College

mortarboard on top of pile of cash
Getty Images

Want a bigger financial aid package now that you've been accepted to college? These four moves can strengthen your appeal.

There’s a new spring ritual for parents of high school seniors: financial aid appeals.

Increasingly, college acceptance letters that make your kid shout for joy are likely to make you want to cry for help. On average, schools are giving only 70% of the grants that families, on top of their expected contributions, need to cover the cost of attendance, based on data from Peterson’s. Most colleges, especially public universities, simply don’t have enough money to fully fund every qualified student.

You may be able to win more aid with a well-crafted appeal. It’s not a sure thing: If your kid has neither exceptional talents nor above-average test scores compared with other applicants, don’t expect an above-average merit grant. And colleges may reduce aid offers in response to misguided appeals, says Al Hoffman, director of the College Funding Service Center, a financial aid consultancy in New London, Conn.  “You don’t get the dance unless you ask for it,” he says, “but you’ve got to be careful.”

Follow these tips to draft an appeal letter more likely to win extra grant dollars (and check out our list of the 10 colleges with the most generous aid budgets):

Be realistic about your need. Showing legitimate reasons the school overestimated how much you can afford (such as recent pay cuts or increased medical expenses) is the strategy most likely to win sympathy—and additional aid. Discretionary expenses, however, such as high credit card or car payments, generally aren’t persuasive, warns Brad Barnett, senior associate director of financial aid and scholarships at Virginia’s James Madison University.

Time your request correctly. Colleges carefully monitor who is sending in deposits and by late April have a good sense of whether they’re on target to fill their class, explains Robert Massa, senior vice president for enrollment at Drew University in New Jersey. His advice: File your appeal with your first-choice school in mid-April. The schools that are overenrolled by then probably won’t give you more money anyway, but the others might be worried enough to reconsider the aid package they’ve offered.

Show academic improvement. Many merit grants are based on grades and test scores reported early in the fall of a student’s senior year. Some schools may offer higher merit aid if a student brings his score up on the ACT or SAT later in his senior year, says Deborah Fox, a college planning adviser in San Diego. Louisiana State University, for example, takes scores through April 15; University of Maine, through May 1.

Leave the door open. If financial reasons compel your child to turn down a college she really wants to attend, she should write a polite letter declining the offer of admission and explaining the reason. Some colleges that didn’t fill their classes last spring circled back in May to offer increased aid to certain students who had rejected them, says Hoffman.

Related: 7 Legal Ways to Squeeze More College Aid From the FAFSA

MONEY Student Loans

6 Ways the New ‘Student Aid Bill Of Rights’ Will Help Borrowers

President Barack Obama speaks at Georgia Tech
David Goldman—AP

On Tuesday President Obama proposed some relief, but experts say more is needed.

President Barack Obama on Tuesday proposed a “student aid bill of rights” that offers about a half-dozen small but important improvements for the 40 million Americans who are dealing with student loans.

While congressional action would be needed to make significant changes in the student loan program, President Obama has ordered the Department of Education to take steps by 2016 to make things simpler and easier for student borrowers.

In a speech at Georgia Tech, the president said the federal government will now “require that the businesses that service your loans provide clear information about how much you owe, what your options are for repaying it, and if you’re falling behind, help you get back in good standing with reasonable fees on a reasonable timeline.” The reforms announced today will:

1. Create a centralized website that makes it easy to file complaints and to see all your student loans in one place. Jesse O’Connell, assistant director of federal relations for the National Association of Student Financial Aid Administrators, said many students are confused by the government’s use of contractors to collect their loans. Some borrowers who receive letters from these anonymous-sounding private companies, such as Navient (a spinoff of Sallie Mae), throw the letters away, thinking they are identity theft scams. A simple centralized website where borrowers could see all their student debt information, payment amounts, and due dates is a “basic consumer-friendly protection,” O’Connell said.

2. Try having federal employees collecting debts instead of private contractors. The Department of Education is already working with the Department of the Treasury to test out having federal employees collect defaulted student loans. Deanne Loonin, of the National Consumer Law Center, called this a good first step, though only a first step. In a blog post about the proposals, she called the use of private debt collection agencies “a disaster” for financially distressed borrowers, and called for the Department of Education to stop using private debt collectors all together: “Debt collectors are not adequately trained to understand and administer the complex borrower rights available under the Higher Education Act, and the government does not provide sufficient oversight of their activities.”

3. Make it easier for borrowers who become disabled to get their student loans discharged. Currently, some borrowers who qualify as disabled through the Social Security system don’t know that they are eligible for a disability discharge, Loonin says. Making the disability discharge rules clear and consistent “is a critical change for some of the most vulnerable borrowers and should be implemented immediately,” she wrote.

4. Ensure that the private debt collectors hired by the Department of Education apply prepayments first to loans with the highest interest rates, unless the borrower requests a different allocation.

5. Make it easier for students to get IRS information to qualify for income-based student loan repayment.

6. Clarify the rules under which students who declare bankruptcy can get their student loans reduced or eliminated. Congress and the federal bankruptcy courts have imposed tough rules that make it far more difficult for student loan borrowers to get out from under their obligations than almost any other kind of debt. But the president asked the Department of Education to at least clarify the rules to collectors so they can be applied consistently.

What Government Can Do Next

While these steps would improve the lives of many people struggling with student debt, experts pointed to three bigger, but politically unlikely, changes that could make student loans far more affordable and fairer. First, simplify the government’s complicated, income-based repayment system into one option, and automatically sign all borrowers up for the program. University of Michigan economist Susan Dynarski, one of the nation’s leading researchers on financial aid, calls the current menu of “income-driven,” “income-contingent” and “income-based” options a “bewildering array” that requires students to jump through many bureaucratic hoops to qualify for the payment plans that will benefit them the most.

Second, stop charging fees on federal student and parent loans. O’Connell, of the association of financial aid administrators, says that the 4.292% fees on federal parent PLUS loans, for example, are not well explained to borrowers and add an unnecessary expense to families. Eliminating them, which would take congressional action, would save families more than $1 billion a year, he says.

And finally, make it easier for borrowers in dire financial straits to reduce or eliminate their loans in bankruptcy. Loonin, at the NCLC, notes that bankruptcy judges across the country apply varying levels of strictness to the rules, which say loans can only be discharged if repaying would cause an “undue hardship.” These variations make it unfair for borrowers seeking relief and force many to spend what little money they do have on lawyers. Since the strict bankruptcy rules were created by Congress, however, it’s up to Congress to change them.

Read next: The 100 Best Private Colleges for Student Borrowers

MONEY College

Some Small Private Colleges Are Facing a “Death Spiral”

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Courtesy of Sweet Brair College Virginia's Sweet Briar College, facing a "financially unsustainable" future, announced this week that it would be closing.

The closure of Sweet Briar College is an example of how winner-take-all economics is starting to hit colleges.

The announcement that Sweet Briar College, a private women’s college in rural Virginia, would shut down this summer—even as elite private colleges such as Harvard reported record numbers of applications—reflects a new reality for students and colleges, experts say.

While the elite colleges can keep raising prices and soliciting big donations, small private colleges that don’t offer what today’s students want – generous financial aid, access to urban activities and job markets, and a name that will impress employers – are facing potentially devastating financial pressures that can lead to a “death spiral” of declining admissions, tuition revenues, and contributions.

The pressures facing small private colleges are part of a larger financial squeeze on almost all kinds of colleges. Nearly all of the nation’s public universities, for example, suffered dramatic budget cuts after the 2008 recession. Some public college systems, such as those in Louisiana and Maine, have been so debilitated by cuts that schools have had layoffs, closed entire departments, and are facing the prospect of having to shut down campuses entirely.

Several for-profit colleges, like Anthem and Corinthian, have shut down in the last year, in part because of government crackdowns on schools with low graduation and student debt repayment rates.

Many traditional nonprofit private colleges are struggling for two other reasons: declines in the number of 18-year-olds in certain parts of the country (especially the Northeast and Midwest) and the worsening financial outlook for the middle-class families who, historically, have wanted to send their children to private institutions.

The Census Bureau says the total number of college-age Americans (18-24) is expected to decline slightly between now and 2020. from 30.9 million to 30.8 million. In addition, the median income for American families was around $52,000 last year—about 5% less, in real terms, than it was a decade ago.

The result, according to a December 2014 Moody’s analysis of the financial situation facing colleges, is a widening winner-take-all divide, in which wealthy institutions with global reputations that can attract high-paying international students will continue to thrive. Schools that aren’t attractive to a national or international market and don’t have a “demonstrated return on investment…will face increased competition from cheaper public higher education as well as distance learning options,” Moody’s warned.

(MORE: See if your college offers a good return on investment.)

The rich and famous colleges are certainly enjoying unprecedented success. Harvard, for example, reported a record 37,305 applications for its fall 2015 freshman class. And between donations and the booming investment market, its endowment rose by $3.5 billion to $35.9 billion in 2014.

Meanwhile, the median American college saw an endowment gain of just $15 million, to bring the typical endowment up to just $113 million. And the average private college has had to provide so much financial aid to attract students that its net revenue per student from tuition, fees, and room and board have remained flat, in real terms, over the last decade, according to the College Board.

An analysis of schools that have recently shut down, or are facing an imminent closure, shows that certain kinds of private colleges, such as small, rural colleges that serve comparatively small communities, appear to be facing the most difficult struggles to recruit enough students to stay afloat.

(MORE: See how to tell whether your college is in deep financial trouble.)

Sweet Briar, located in a small community 120 miles southwest of Richmond, has only 710 students and was having trouble recruiting new ones because fewer women seem to want to attend an all-women’s college these days, college president James F. Jones Jr. said in the closure announcement. “The declining number of students choosing to attend small, rural, private liberal arts colleges and even fewer young women willing to consider a single-sex education, and the increase in the tuition discount rate that we have to extend to enroll each new class is financially unsustainable,” he explained.

Mid-Continent University, of Mayfield, Ky., a Baptist college that shut down last June after the federal government found problems in the financial aid office, had about 2,200 students in a town about 150 miles northwest of Nashville. And Lebanon College, a two-year private college 75 miles northeast of Manchester, N.H., had fewer than 90 students when it closed last summer.

Tennessee Temple University, which The Chatanoogan reported recently is considering closure, is a Baptist school with about 1,000 students.

Richard Ekman, president of the Council of Independent Colleges, an association of small private schools, says predictions of a tsunami of private college closures are unfounded. “It is pretty hard to kill a college,” he notes. And in fact, while there is no official count of the number of college closures, a search of news reports for private, nonprofit colleges that have closed or considered closure in the last year turned up no more than about a dozen or so names out of the approximately 1,650 private nonprofit colleges operating today.

The vast majority of private colleges are responding to financial pressures by using technology and online materials to reduce their costs, raising more financial aid donations to be able to enroll more cash-strapped students, and developing new professional and online programs to attract new kinds of tuition-paying students such as working adults, Ekman says.

But Ekman acknowledges these strategies won’t save every college. There is growing competition among colleges for working adult students and online courses, for example, he notes. And most private colleges don’t have big endowments to allow them to ride out continuing economic stresses. “The colleges are doing what they should be doing,” he said. “The question whether they are doing it quickly enough.”

MONEY College

The Problem With Obama’s “Free Community College” Proposal

US President Barack Obama speaks on new proposals for higher education accessibility at Pellissippi State Community College in Knoxville, Tennessee on January 9, 2015. Looking on are US Vice President Joe Biden and his wife Jill Biden.
Mandel Ngan—AFP/Getty Images US President Barack Obama speaks on new proposals for higher education accessibility at Pellissippi State Community College in Knoxville, Tennessee on January 9, 2015. Looking on are US Vice President Joe Biden and his wife Jill Biden.

President Obama's free college plan won't actually raise the number of college graduates without improvements in the way community colleges help students succeed, say two education researchers.

President Obama’s ambitious proposal to make community college tuition free would certainly make enrolling in college more affordable. It may also induce students to stay there longer.

However, reducing costs for students on its own is unlikely to significantly increase the number of students who finish degrees. Consider: Of all of the students who enrolled in public community college for the first time in the fall of 2003, only one-quarter earned any kind of certificate or associate’s degree within six years. Another 12% earned a bachelor’s degree within that six-year period.

If we want to significantly improve educational outcomes, we need to both make college more affordable so more students can enroll, and make the reforms needed to ensure community college students can succeed in their courses, complete their programs, and graduate within a reasonable amount of time.

President Obama’s plan would certainly make community college more affordable. Even for the 40% of community college students whose tuition is already covered by federal and state aid, other expenses (food, transportation, books, etc.) often present insurmountable hurdles. If grants are awarded to eligible students on top of free tuition, as President Obama proposes, then many of these affordability issues would be addressed.

But the Tennessee and Chicago free tuition policies that inspired President Obama also address the broader barriers to success. The affordability improvements in those communities are one part of larger reforms designed to dramatically boost the success of community college students by providing close monitoring of student progress, careful alignment of courses to transfer and job requirements, clearer and more coherent programs of study, and help for students to make better choices about what to study.

Such reforms, many features of which have also been enacted in the City University of New York’s Accelerated Studies in Associate Programs (ASAP), have doubled the graduation rate for participants. But at a cost: ASAP costs 60% more per student than the standard CUNY program.

Laudably, President Obama’s proposal does try to address quality. It includes requirements that community colleges “adopt promising and evidence-based institutional reforms to improve student outcomes.” But his plan does not provide colleges with additional resources to help them in these efforts.

In fact, it is possible that his plan could reduce the money community colleges are able to spend on improving outcomes.

The White House estimates that the free tuition program would cost $6 billion a year. But that money would simply replace the tuition students were already paying, not increase colleges’ revenue. States would be required to pay for one-quarter of this tuition subsidy. Some may raise that money by decreasing the direct subsidies they give colleges now, which currently cover approximately two-thirds of the cost of educating each student.

Despite these obstacles, the president’s proposal opens the door to a broader discussion of a comprehensive strategy for community colleges that emphasizes both affordability and performance.

Community colleges are the launchpad for opportunity for all Americans, enrolling almost half of the nation’s undergraduates. They are especially crucial for those who have, traditionally, been excluded from other kinds of higher education.

For these millions of students seeking brighter futures at community colleges, we need bold and transformative change and renewed public investment to ensure they have college options that are both affordable and of high quality.

Thomas Bailey is director of the Community College Research Center at Teachers College, Columbia University and co-author of the forthcoming Redesigning America’s Community Colleges (Harvard University Press, 2015).

Judith Scott-Clayton is a senior research associate at the Community College Research Center at Teachers College, Columbia University.

MONEY College

5 Ways to Get Free College Education Even If (When?) Obama’s Plan Dies

Congress probably won't approve the free community college plan, but there are lots of ways you can get free or affordable college courses.

Almost as soon as President Obama floated his proposal for free community college on Thursday night, experts began explaining the political, economic, and practical reasons it was unlikely ever to become a reality.

Chances are slim, it was pointed out, that he can persuade a Republican-controlled Congress to approve and fund the expensive plan

And community college leaders worried about their ability to handle a big influx of students attracted by free courses, some noting that insufficient revenues and high demand have forced some community colleges to turn away students in recent years.

But don’t despair: Many other programs are already making college free for thousands of students. And there are other proposals to eliminate up-front tuition that could open the college gates to more students in the future.

Here are five ways you can find free or very affordable college courses right now:

1) Some states and cities already have free or low-cost community college tuition. The Tennessee Promise, which is the model for President Obama’s plan, waives tuition not covered by other aid programs for students who file a Free Application for Federal Student Aid (FAFSA), donate eight hours of community service each semester, and earn a C grade point average. Similar programs are being debated in Oregon, Texas, Mississippi, and Chicago. Community colleges in California, the most affordable in the country, charge less than $1,500 a year in tuition and fees.

2) Financial aid and tax benefits already cover most community college tuition. The average community college charges about $3,350 a year in tuition and fees. By taking advantage of the $2,500 federal tuition tax credits, as well as financial aid such as the federal Pell Grant, the average community college student gets enough aid to cover tuition and the approximately $1,000 book bill, according to research by the College Board.

3) Alternative free college proposals. Several states are considering “Pay It Forward” proposals that would allow students to attend college without paying any tuition right away and instead repaying a percentage of their income over time. And other “free college” plans have also gained traction.

4) Established free college programs: The military, work colleges, and many generous colleges offer ways to get free college educations.

5) Free online courses: There are hundreds of free Massive Open Online Courses (MOOCs). Many, for a nominal fee, will award you college credits.

MONEY financial aid

7 Legal Ways to Squeeze More College Aid From the FAFSA

vice squeezing dollar bill
Steven Puetzer—Getty Images

Smart timing, cash management and college application strategies can mean thousands of dollars in extra financial aid.

Correction appended: January 8

Filling out the 10 eye-crossing pages of the 2015-16 Free Application for Federal Student Aid, the most important application for need-based college financial aid, may not seem like a fun adventure in Super Mario’s Mushroom Kingdom. But hidden among its 103 questions are hints that, if followed correctly, can dramatically increase your need-based aid and possibly rescue your dreams of an affordable college education.

Before you spend a lot of time on this, though, use a few college Net Price Calculators, the federal government’s FAFSA Forecaster, or the College Board’s Expected Family Contribution (EFC) calculator to see whether you’re likely to receive any need-based aid. If you’re planning to attend an in-state public college, and your family has an Expected Family Contribution (or EFC) above about $25,000 (which general means the family income is above $125,000) the odds of getting need-based grants are very low, says Paula Bishop, an independent financial aid counselor in Bellevue, Wash. For students planning on private colleges, the need-based aid EFC cutoff is generally about $65,000, she says (which typically means the family has an income greater than $200,000).

If you’re above those cutoffs, it still pays to fill out the FAFSA to qualify yourself for low-cost student loans, and merit programs that require the form, but your focus should be on maximizing merit aid – which is money awarded based on the student’s grades or other accomplishments without regard to family income.

If you’re below those cutoffs, use this “not-cheating” (since all these strategies are legal) FAFSA cheat sheet:

1. Go online. You can print out a PDF and fill out the FAFSA on paper. But the online version uses skip logic, which makes it easier and faster. Also, for later filers, the online version will import your tax information, which speeds things up even more.

2. Time it right. Fill out the 2015-16 form right now if you live in one of the nine states with “first-come, first-served” financial aid programs: Alaska, Illinois, Kentucky, North Carolina, Oregon, South Carolina, Tennessee, Vermont, and Washington. These states often run out of money quickly, so act fast, even if you don’t have your 2014 tax information. You can fill out the 2015-16 form using estimates based on your 2013 tax forms. Then, when you do your taxes, you can go back into your FAFSA and make any updates or corrections.

Everybody else has more time—but not a lot. Those who file the FAFSA by March 30 receive, on average, twice the grant money as later filers, calculates Mark Kantrowitz, publisher of the financial aid website Edvisors.com. Many colleges and states have early deadlines for state aid: The deadline for filing for state financial aid in Connecticut is Feb. 15; Idaho, Maryland, Michigan, Oklahoma, Rhode Island and West Virginia cut off their state aid after March 1. California’s deadline is March 2. You can check your state’s aid deadline here, but you’ll have to call, or check the websites of, the colleges you’re applying to for their aid deadlines.

Don’t despair if you still haven’t filled out last year’s FAFSA. You can still qualify for federal aid for the 2014-15 academic year by filling out last year’s FAFSA, even as late as June 30 of this year

3. Clarify your relationships. Questions 16 and 59 ask about the students’ and parents’ marital status as of the day you file the form, to see if both parents’ income should be counted as financial resources for the student. Rules adopted in 2014 eliminated a loophole that allowed parents who were cohabiting but didn’t happen to be married to report only one parent’s income (which usually increased the student’s eligibility for need-based aid). Divorced or separated parents may report one parent’s income (the parent with whom the student spends the most time) only if the other parent does not live in the same house. In other words, if you’re in the process of getting divorced or separated anyway, one spouse should move out before you finish the FAFSA.

4. Parents: Don’t brag. Some states and colleges offer extra aid to children of parents who haven’t earned college degrees. Questions 24 and 25 ask about the highest level of education your parents completed. So if one or both of your parents, attended community college, or even are just one credit away from a bachelor’s degree, make sure to fill in the dot only for “high school,” Bishop advises.

5. Pay your bills first. Questions 41 and 90 ask about how much cash students and parents have in savings and checking accounts at the moment you are filling out the FAFSA. But notice that there are no questions on the FAFSA about your debts or bills. So if you’ve got a sufficient emergency cash reserve, use any extra cash to pay down credit card, car loan, or other bills before you finish filling out the form, and report the newly lower cash amount on the FAFSA.

6. Shield your investments. Questions 42, 43, 91 and 92 ask about the student’s and the parents’ investments. But many filers don’t realize that the value of any retirement accounts, as well as the home you live in, should not be included in these boxes. So if you’ve got a lot of money in non-retirement accounts, prepay your mortgage or plow some into Roth IRAs. One big advantage of Roth IRAs: You can take out your contributions (but not any earnings) tax-free to pay college bills.

7. Strategize your college list. A growing number of colleges are analyzing the order in which students list colleges on FAFSA question #103 to determine how likely the student is to attend. Colleges assume that students list colleges in their order of preference, and some will award more aid to those who list their college second or third, say, in an effort to woo students away from their first choice. So make sure the top three colleges in your list are schools you really want to attend, and, if possible, are schools that compete with one another, in the hopes of encouraging them to raise your aid offer.

Correction: The original version of this story misstated the scenario in tip No. 6. The time to take these steps is when you have a lot of money in non-retirement accounts.

Read next: Best Colleges You Can Still Apply To For Fall 2015

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MONEY College

3 Ways to Get More College Merit Aid

STEPHEN ALLEN, COURTESY OF PRESBYTERIAN COLLEGE At Presbyterian College in South Carolina, 46% of students get scholarships, averaging $16,000 a year.

Use these tips to score a merit award big enough to put a real dent in tuition bills.

Maybe your kids aren’t exactly Einsteins, but they can do math well enough to figure out that even upper-middle-class families can’t easily afford the $100,000 average sticker price for a degree from a public college, let alone $200,000 for a private school. And you know that’s a pretty tough equation too.

One way to help close the gap between your savings and any need-based aid your student is likely to get: Set your sights on merit aid awarded by colleges based on grades, test scores, or other accomplishments. Nabbing a merit award is getting easier, says Frank Palmasani, author of Right College, Right Price, as more schools use scholarships as a marketing tool to attract quality students. Indeed, the percentage of undergraduates getting merit aid has more than tripled in the past 20 years, the government reports, and it’s not just “A” students who qualify. Palmasani, a counselor at Providence Catholic High School in New Lenox, Ill., says, “Never anticipate that your child’s test scores and GPA are too low to be considered for merit aid.”

The stakes can be substantial. An analysis of the merit aid budgets of the 665 colleges in MONEY’s Best Colleges rankings—schools that meet basic criteria for value and educational quality—found that last year about 17% of students got scholarships at private colleges. The average award: $12,500. And at the most generous schools, at least a third of students get merit grants, typically covering at least half of tuition.

The downside of the uptick in merit awards is that they often take dollars away from grants based on financial need. Recently net college prices for low- and moderate-income households have been rising faster than for more affluent ones. That makes it imperative for families of all income levels to seek out every merit dollar available.

These strategies should help.

Go Where the Money Is

The most selective schools are the least likely to be liberal with merit money. At colleges in the MONEY rankings that accept 20% or less of applicants, only 7% of students receive merit aid. At schools where at least a third of students get merit scholarships, the average acceptance rate is 61%. The best odds are at lesser-known private schools such as Furman University in South Carolina, which accepts about two-thirds of applicants. It awards almost half the students merit scholarships.

Don’t assume a high acceptance rate means the school has lower-quality students: The typical undergrad at Millsaps, which accepts 47% of applicants and is ranked No. 1 for merit aid on our list, had SAT scores of about 1140; at No. 2, Hendrix, which accepts 80%, the typical freshman scored 1200. The SAT national average: 1010.

Look Beyond Home

Public universities generally don’t hand out a lot of merit awards; only 9% of students at the state schools we ranked received scholarships, averaging $4,500. A few exceptions include public schools in Alabama, North Dakota, and South Carolina, and many non-flagships in other states, which are making a concerted effort to woo out-of-state students. The University of South Carolina, for example, last year offered scholarships worth about $8,500 a year to out-of-state students with A-minus grades and SAT scores averaging 1245. Among the public schools in our rankings, Truman State in Missouri and the New College of Florida also offer at least 25% of their students merit aid. Call the admissions office—not the financial aid office—at public schools to find out whether they offer merit awards to out-of-state students.

Play a Little Hard to Get

Encourage your child to apply to several schools where his grades and test scores put him in the top quarter of the applicant pool. Then he should designate his favorites by putting them at the top of school lists requested on FAFSA (the Free Application for Federal Student Aid), the SAT or ACT forms, and college-search sites. Schools tend to offer the most aid to prospects who would improve their student profile and have several college options. But some don’t bother making offers to students they believe, realistically, probably won’t choose their institution.

At Beloit, in Wisconsin, where about a quarter of students get merit aid, the best offers go to applicants with the highest grades and test scores who have also indicated the school is one of their top picks, says Beloit president Scott Bierman. “We have a decent sense of what other schools offer families” and want to make offers that compete favorably, he says. “But if we’re not in your top three, we know you’re not really a serious candidate.”

Related: See our list of the Top 20 private colleges that offer the most merit aid.

More Rankings from MONEY’s Best Colleges:
The 25 Most Affordable Colleges
The 25 Colleges That Add the Most Value
The 25 Best Colleges That You Can Actually Get Into

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