How To Pay for College With High Income

My daughter is a current high school Junior and my goal for the next 12 months is to help her find a college that will satisfy many (sometimes conflicting) parameters. The school must be a good fit for her, it has to have the major she’s interested in, and I must be able to pay the cost of attendance.

There are more than 4000 colleges and universities in the US, so we started with a fairly large list of 47 schools that we intended to reduce to less than ten candidates.

There are two main camps among independent education consultants.

The first group focuses on helping high-achieving students to get into the top 20 selective schools. They help with essays, extracurricular activities, connecting with school professors, etc. They do not focus on paying for college since most of their audience are quite wealthy.

Then there are consultants that help to get into a college, not necessarily to the most selective ones. I belong to the latter camp, and I believe that college does not have to be at the top of US News rankings in order to change students’ lives.

I also strongly believe that attending a school that ranks #200 in US News and graduating without any debt is much better in the long-term than attending an Ivy League with 200k debt.

However, there is a problem.

Our family makes more than 60K in annual income, and it makes my daughter ineligible for financial aid in most selective colleges. But we don’t make enough to pay even half of the tuition in private colleges out of pocket.

how to pay for college stress

Like many other high-income families, we are too rich to be eligible for financial need and too poor to pay the tuition without substantial borrowing.

Fortunately, there is a way to go to college, if not for free, but at least without borrowing tens of thousands in loans, even for families with substantial income and savings.

Students from high-income families should apply to colleges that offer more merit aid in order to reduce the cost of attendance and avoid excessive borrowing. In general, most colleges offer merit aid to students in the top 25 academic percentile of the incoming freshman class.

Related Article: Does Applying for Financial Aid Hurt Your Chances of Admissions?

How To Pay for College for High Income Families

Now, when you know what to do if you are in the same boat, I will explain how to approach the problem.

Be open-minded when making initial list of schools

When you are building the initial list of colleges, the goal is to be open-minded. At this stage, try to include as many schools as possible. You will have time to pare down the list later.

Talk to your child and try to identify the things that are important for her. After all, she will spend 4-5 years on the campus, and you don’t want her to feel miserable.

For instance, my daughter wants to live in a big city on East Coast. We visited Bowdoin’s last summer, and right away, she knew that this was not a place for her. So, we started with all major cities, such as New York, Boston, etc., and populated the initial list with urban colleges.

Your child is probably different, and she has other priorities. Maybe she is interested in a particular major; then it makes sense to build a list with schools that offer such a major.

Or maybe she’s a good athlete, and certain colleges give good athletic scholarships in a particular sport. Or another example is my friend’s son, who did not want to live far from his family, so he made his list entirely with in-state colleges.

One thing you should avoid, though, is building a list of colleges with top 20 US News Rankings. The list must include the so-called Reach, Target, and Safety schools.

Reach school is where your student’s chances to be accepted are very low but higher than zero. Target school is where your child is in the middle of the enrolled class academically. And safety is where the student is in the top 25 percentile of a typical incoming first-year class.

You may be asking why it is important to have a balanced list if my son is a straight-A student and only wants to go to Harvard?

The goal is to spread the risk and avoid a scenario when the student applies to all top schools and gets denied. I know many stories when the student applied to Ivy League schools only and got rejected from all of them.

Going to a college is better than staying at home.

But how do you know which school is reach, target, or safety for your student? The answer is in the next section.


Use Common Data Set to gather information

There is a great tool called Common Data Set or CDS. CDS is a set of data points provided by most higher education institutions. It contains a lot of data about the incoming freshman class, and you can use it to compare the schools.

There are ten sections in CDS. When I was working on my list, I picked only some limited data points, and even then, my spreadsheet had more than 50 columns. You can access my spreadsheet here.

My list contains 46 colleges.

Some of them were selected by my daughter. She simply went through the US News Rankings’ top 100 universities and picked the ones she might be interested in. She also added target and safety schools in our state. Then I added the colleges offering full-ride scholarships.

After finalizing the list, I downloaded CDS for each institution and filled the data in my spreadsheet.

I found some very interesting facts.

Pick colleges with high admission chances

As I mentioned earlier, you need to identify which colleges go to reach, target, and safety buckets. One way to know is by comparing the GPA and standardized test scores of your student to the top 25 percentile of the incoming freshman class. On my spreadsheet, these are columns V, W, and X.

For instance, if you are looking at Purdue University at West Lafayette, your student has the best chance of admission if his SAT score is above 1430 or ACT is 33 or above. Also, having a GPA of 3.75 puts him in the top 25 percentile.

If the student’s GPA and test scores are slightly lower, then it’s a target school. If his numbers are way higher, then it’s a safety. If numbers are significantly lower, then it’s a reach.

This is how college counselors used to grade schools before the pandemic. This algorithm has significant flows, however.

First, you never know what GPA colleges are using when reporting in CDS: weighted or unweighted. And if they are using weighted, what is the grade scale?

For example, the average GPA at the University of Maryland is 4.3. Obviously, this is a weighted GPA. With other schools, is not immediately clear.

The second problem is that almost half of the colleges became test-optional after the pandemic.

So, if your kid is applying test-optional, then does she know if she’s competitive or not?

Related Article: Calculating Your College Chances [ala Chance Me College Confidential]

Universities that use holistic admission have so-called institutional priorities. In other words, they are looking for things that they don’t have.

For example, columns C and D on my spreadsheet come from section B1 in CDS: a number of men and women enrolled. As you can see, most colleges enroll more women than men.

There is a national trend that worries most educators: men are increasingly choosing to skip college and go straight to work after high school. While it is sad statistics, let’s see how you can use it for your child’s advantage.

Based on the table below (which only includes several columns from my spreadsheet), if you have a son, he has higher chances to be admitted to George Washington and Tulane, where the number of men is half of the number of women.

Conversely, suppose your daughter likes computer science. In that case, her chances of being admitted into Georgia Tech or Rensselaer Polytechnic Institute are higher than the chances of a boy with similar stats because enrolling more females is an institutional priority for these universities.

UniversityMen FreshmenWomen Freshmen
George Washington University6711278
Tulane University7261301
University of Georgia20583545
Towson University9931576
University of North Carolina – Chapel Hill17142682
Northeastern University17772727
Boston University11731739
University of Florida26003701
University of Texas – Austin34424876
Fordham University9541306
University of Pittsburgh–Pittsburgh Campus17852420
College of William and Mary715967
Wake Forest University633819
University of Wisconsin – Madison37794663
University of Michigan – Ann Arbor32514000
University of Connecticut17102096
Clemson University17802148
University of Denver622745
Michigan State University36944403
UC Berkeley27993208
University of Miami12901470
Washington University in St. Louis845956
Southern Methodist University740828
Ohio State University – Columbus40714552
University of Southern California16231814
Miami University – Oxford18081993
Stanford University778828
Vanderbilt University825868
Pennsylvania State University–University Park41584240
University of Notre Dame10551044
Duke University805775
Johns Hopkins University723691
University of Maryland22072079
Drexel University12011124
University of Colorado – Boulder32272980
Rice University523470
University of Illinois–Urbana-Champaign40033471
Case Western Reserve U706598
Lehigh University749621
Virginia Tech37832996
Purdue University – West Lafayette58834257
Georgia Institute of Technology19151319
Worcester Polytechnic Institute839455
Rensselaer Polytechnic Institute1034430
Freshmen Men vs Woman

Next, look at section C5 (columns F-J in my spreadsheet). It tells you how many years of English, Maths, Science, Social Studies and Foreign Language the student should take to be competitive.

For example, Boston University wants students who took all the above-mentioned classes for all four years in high school. Still, Worcester Polytechnic Institute is ok with students who took foreign language classes for only two years.

Another interesting section is C7 – the importance of academic and non-academic factors in the admission decision. I only listed some of those factors in columns K-S on my document.

As you can see, all colleges on my list mark Academic Rigor as Very Important. Academic rigor, in this case, means that the colleges want the student who took the most challenging classes at school. Usually, it means the student took a sufficient number of AP, IB, or Honor classes.

The importance of extracurricular activities and essays varies from Very Important to Not Considered. This fact was eye-opening to me because most college counselors focus on these two topics when working with students. My hunch is that they do it because it’s something they can help with.

In reality, you don’t need to be involved in extracurricular activities in order to get into college.

So, if your student is a good scholar but does not do anything outside the school or otherwise, check section C7 in CDS and look for schools that grade extracurriculars as Considered or Not Considered.

For example, in the table below, you can see that extracurriculars are Very Important (VI) for Case Western, Important (I) for Boston, Considered (C) for Clemson, and Not Considered (NC) in Penn State.

CollegeRigorClass RankGPATestsEssayRecsExtracurricular
Boston UniversityVIIVICIII
Case Western Reserve UVIVIVICIIVI
Clemson UniversityVIVIVIVICCC
College of William and MaryVIVIVIVIVIVIVI
Drexel UniversityVIVIVIVIIIC
Fordham UniversityVICVICIII
George Washington UniversityVINCVICIII
Georgia Institute of TechnologyVINCVIIVICVI
Johns Hopkins UniversityVIIVIIIVII
Lehigh UniversityVIVIVIIIVIVI
Miami University – OxfordVIVIVIVIVIVIC
Michigan State UniversityICVICVICI
Northeastern UniversityVICVIVIVIVII
Ohio State University – ColumbusVIVIVIVIICI
Pennsylvania State University–University ParkINCVICNCNCNC
Purdue University – West LafayetteVICVIVIIII
Rensselaer Polytechnic InstituteVIVIVIVIIII
Southern Methodist UniversityVIIVIVIVIVII
Stanford UniversityVIVIVIVIVIVIVI
Towson UniversityICVICINCI
Tulane UniversityVIVIVIVIIIC
University of MarylandVIIVIVIIIC
University of Colorado – BoulderVICVIVIIII
University of ConnecticutVIVIVIVIIII
University of DenverVINCVIIIII
University of FloridaVICVIIVINCVI
University of GeorgiaVINCVIICCC
University of Illinois–Urbana-ChampaignVINCVIIINCI
University of MiamiVIVIVIVIVIVIVI
University of Michigan – Ann ArborVINCVIIIIC
University of North Carolina – Chapel HillVIIIVIVIVIVI
University of Notre DameVIIICIII
University of Pittsburgh–Pittsburgh CampusVICVIVIICC
University of Southern CaliforniaVIVIVIVIVIVII
University of Texas – AustinCCCCCCC
University of Wisconsin – MadisonVICICVIIC
Vanderbilt UniversityVIVIVIVIVIIVI
Wake Forest UniversityVIVIVICVIII
Washington University in St. LouisVIVIVIVIVIVII
Worcester Polytechnic InstituteVIIVINCCII
Importance of Admission Factors

Apply to colleges with substantial merit aid

If your family has a high income, the chances for need-based aid are low. Your hope is the school offers a substantial merit aid that will reduce the cost of attendance to a level acceptable for your family.

For instance, if the family income is $150K and the school wants you to pay $50K (after taxes), this is probably not a reasonable price for education. But, if the school offers a merit aid that can reduce the cost to $20K a year, then it is possibly a good financial fit.

merit aid

So, how do you know if the college offers good merit aid?

When building my spreadsheet, I was inspired by information from two books: Who Gets In and Why by Jeff Selingo and The Price You Pay for College by Ron Lieber.

They both used CDS, namely section H, to identify the universities that give non-need based grants and scholarships.

For instance, Jeff Selingo splits schools into two buckets: buyers and sellers. Sellers are the ones that do not need to offer substantial tuition discounts to lure applicants because they have name brands.

For example, none of the Ivy League schools offer merit scholarships. First, because they only accept the brightest students. And second, because most families are ready to pay north of $200K for the honor to be a Harvard student.

Finding the schools with the best non-need scholarships is easy.

First, compare Total Scholarships/Grants need-based and non-need based in section H1. See the second column in the table below, which is a percentage of non-need based aid of total combined aid.

The higher the percentage, the more likely the qualified student to get a discount. Higher percentage means the school is a buyer, and the lower percentage means the school is a seller.

Next, check column H2A-N. An H2A-N column in CDS is the “[n]umber of students in line a who had no financial need and who were awarded an institutional non-need-based scholarship or grant aid.”

In the last column of the table, I divided the number from H2A-n to the total number of enrolled students. And again, the higher the percentage, the more generous school is with non-need based aid.

UniversityPercentage Institutional/Need AidMerit Aid Awarded
Boston University7.61%4.74%
Case Western Reserve U37.64%34.41%
Clemson University42.26%26.59%
Drexel University31.87%27.39%
Duke University11.79%0.70%
Fordham University30.00%26.06%
George Washington University28.46%24.94%
Georgia Institute of Technology43.10%33.88%
Johns Hopkins University5.51%0.78%
Lehigh University9.47%8.76%
Miami University – Oxford60.77%45.51%
Michigan State University37.68%12.83%
Northeastern University35.50%30.43%
Ohio State University – Columbus28.67%23.99%
Pennsylvania State University–University Park21.69%6.10%
Purdue University – West Lafayette29.66%10.74%
Rensselaer Polytechnic Institute27.93%28.76%
Rice University9.19%3.22%
Southern Methodist University52.64%39.60%
Stanford University7.23%0.00%
Towson University32.98%6.46%
Tulane University45.41%33.40%
UC Berkeley9.00%5.09%
University of Maryland42.25%21.65%
University of Colorado – Boulder34.13%40.62%
University of Connecticut29.05%21.73%
University of Denver39.96%49.42%
University of Florida67.89%4.32%
University of Georgia53.51%2.68%
University of Illinois–Urbana-Champaign12.32%11.70%
University of Miami43.97%53.01%
University of Michigan – Ann Arbor31.16%12.95%
University of North Carolina – Chapel Hill8.73%2.06%
University of Notre Dame11.23%1.94%
University of Pittsburgh–Pittsburgh Campus28.76%8.90%
University of Southern California22.10%24.94%
University of Texas – Austin4.46%3.50%
University of Wisconsin – Madison18.49%4.37%
Vanderbilt University10.91%7.85%
Virginia Tech55.23%10.79%
Wake Forest University13.70%3.24%
Washington University in St. Louis4.08%2.22%
Worcester Polytechnic Institute35.28%33.11%

As you can see, Stanford offers zero merit aid. So, if your student applies and gets accepted and your family makes more than $200K a year, prepare to pay the full price.

On the other hand, if your kid is accepted to Tulane (also a good college) and she is in the top 25 percentile of the incoming class, her chances to receive a substantial reduction in cost are high even if you make a million annually.

Apply in Early Action round

One last tip to get the best non-need scholarship is to apply early.

However, be aware that there is a difference between Early Action and Early Decision. If the student applies in Early Decision round and gets accepted, she has to withdraw all other applications.

The downside of this approach is that you are losing a chance to compare financial packages from multiple colleges that admitted your student. In other ways, you have to pay what the college thinks you can afford. It also means that they will be less likely to throw a merit aid to a student who is bound to attend their institution anyway.

Instead, I suggest applying in the Early Action round. If the kid applies to EA, the university knows that the student is seriously considering them, and they are more likely to offer a good discount.

can I afford college?

Too Rich For Financial Aid, Too Poor For College

If the student does not qualify for need-based financial aid because the family’s income is too high, the best way to reduce the tuition is to apply to colleges that offer merit scholarships. Usually, colleges offer grants and scholarships to students they want to attract.

So, if your child is doing well in high school, check the college’s Common Data Set and see if the student will be likely to receive non need-based grants.

The other option is to apply to third-party scholarships. However, be aware that many outside scholarships are geared towards low-income families and the amounts are usually so small that you need to apply to hundreds of them in order to make a significant dent in the tuition cost.

Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily represent those of the College Reality Check.

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