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.

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.

University	Men Freshmen	Women Freshmen
George Washington University	671	1278
Tulane University	726	1301
University of Georgia	2058	3545
Towson University	993	1576
University of North Carolina – Chapel Hill	1714	2682
Northeastern University	1777	2727
UCLA	2519	3852
Boston University	1173	1739
University of Florida	2600	3701
University of Texas – Austin	3442	4876
Fordham University	954	1306
University of Pittsburgh–Pittsburgh Campus	1785	2420
College of William and Mary	715	967
Wake Forest University	633	819
University of Wisconsin – Madison	3779	4663
University of Michigan – Ann Arbor	3251	4000
University of Connecticut	1710	2096
Clemson University	1780	2148
University of Denver	622	745
Michigan State University	3694	4403
UC Berkeley	2799	3208
University of Miami	1290	1470
Washington University in St. Louis	845	956
Southern Methodist University	740	828
Ohio State University – Columbus	4071	4552
University of Southern California	1623	1814
Miami University – Oxford	1808	1993
Stanford University	778	828
Vanderbilt University	825	868
Pennsylvania State University–University Park	4158	4240
University of Notre Dame	1055	1044
Duke University	805	775
Johns Hopkins University	723	691
University of Maryland	2207	2079
Drexel University	1201	1124
University of Colorado – Boulder	3227	2980
Rice University	523	470
University of Illinois–Urbana-Champaign	4003	3471
Case Western Reserve U	706	598
Lehigh University	749	621
Virginia Tech	3783	2996
UMBC	1136	899
Purdue University – West Lafayette	5883	4257
Georgia Institute of Technology	1915	1319
Worcester Polytechnic Institute	839	455
Rensselaer Polytechnic Institute	1034	430

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.

College	Rigor	Class Rank	GPA	Tests	Essay	Recs	Extracurricular
Boston University	VI	I	VI	C	I	I	I
Case Western Reserve U	VI	VI	VI	C	I	I	VI
Clemson University	VI	VI	VI	VI	C	C	C
College of William and Mary	VI	VI	VI	VI	VI	VI	VI
Drexel University	VI	VI	VI	VI	I	I	C
Duke University	VI		VI	VI	VI	VI	VI
Fordham University	VI	C	VI	C	I	I	I
George Washington University	VI	NC	VI	C	I	I	I
Georgia Institute of Technology	VI	NC	VI	I	VI	C	VI
Johns Hopkins University	VI	I	VI	I	I	VI	I
Lehigh University	VI	VI	VI	I	I	VI	VI
Miami University – Oxford	VI	VI	VI	VI	VI	VI	C
Michigan State University	I	C	VI	C	VI	C	I
Northeastern University	VI	C	VI	VI	VI	VI	I
Ohio State University – Columbus	VI	VI	VI	VI	I	C	I
Pennsylvania State University–University Park	I	NC	VI	C	NC	NC	NC
Purdue University – West Lafayette	VI	C	VI	VI	I	I	I
Rensselaer Polytechnic Institute	VI	VI	VI	VI	I	I	I
Rice University	VI	VI	VI	VI	VI	VI	VI
Southern Methodist University	VI	I	VI	VI	VI	VI	I
Stanford University	VI	VI	VI	VI	VI	VI	VI
Towson University	I	C	VI	C	I	NC	I
Tulane University	VI	VI	VI	VI	I	I	C
UC Berkeley	VI	NC	VI	C	VI	C	I
UCLA	VI	NC	VI	NC	VI	NC	I
UMBC	VI	I	VI	C	VI	VI	C
University of Maryland	VI	I	VI	VI	I	I	C
University of Colorado – Boulder	VI	C	VI	VI	I	I	I
University of Connecticut	VI	VI	VI	VI	I	I	I
University of Denver	VI	NC	VI	I	I	I	I
University of Florida	VI	C	VI	I	VI	NC	VI
University of Georgia	VI	NC	VI	I	C	C	C
University of Illinois–Urbana-Champaign	VI	NC	VI	I	I	NC	I
University of Miami	VI	VI	VI	VI	VI	VI	VI
University of Michigan – Ann Arbor	VI	NC	VI	I	I	I	C
University of North Carolina – Chapel Hill	VI	I	I	VI	VI	VI	VI
University of Notre Dame	VI	I	I	C	I	I	I
University of Pittsburgh–Pittsburgh Campus	VI	C	VI	VI	I	C	C
University of Southern California	VI	VI	VI	VI	VI	VI	I
University of Texas – Austin	C	C	C	C	C	C	C
University of Wisconsin – Madison	VI	C	I	C	VI	I	C
Vanderbilt University	VI	VI	VI	VI	VI	I	VI
Virginia Tech	VI	NC	VI	C	VI	NC	C
Wake Forest University	VI	VI	VI	C	VI	I	I
Washington University in St. Louis	VI	VI	VI	VI	VI	VI	I
Worcester Polytechnic Institute	VI	I	VI	NC	C	I	I

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.

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.

University	Percentage Institutional/Need Aid	Merit Aid Awarded
Boston University	7.61%	4.74%
Case Western Reserve U	37.64%	34.41%
Clemson University	42.26%	26.59%
Drexel University	31.87%	27.39%
Duke University	11.79%	0.70%
Fordham University	30.00%	26.06%
George Washington University	28.46%	24.94%
Georgia Institute of Technology	43.10%	33.88%
Johns Hopkins University	5.51%	0.78%
Lehigh University	9.47%	8.76%
Miami University – Oxford	60.77%	45.51%
Michigan State University	37.68%	12.83%
Northeastern University	35.50%	30.43%
Ohio State University – Columbus	28.67%	23.99%
Pennsylvania State University–University Park	21.69%	6.10%
Purdue University – West Lafayette	29.66%	10.74%
Rensselaer Polytechnic Institute	27.93%	28.76%
Rice University	9.19%	3.22%
Southern Methodist University	52.64%	39.60%
Stanford University	7.23%	0.00%
Towson University	32.98%	6.46%
Tulane University	45.41%	33.40%
UC Berkeley	9.00%	5.09%
UCLA	7.92%	2.88%
UMBC	46.13%	29.48%
University of Maryland	42.25%	21.65%
University of Colorado – Boulder	34.13%	40.62%
University of Connecticut	29.05%	21.73%
University of Denver	39.96%	49.42%
University of Florida	67.89%	4.32%
University of Georgia	53.51%	2.68%
University of Illinois–Urbana-Champaign	12.32%	11.70%
University of Miami	43.97%	53.01%
University of Michigan – Ann Arbor	31.16%	12.95%
University of North Carolina – Chapel Hill	8.73%	2.06%
University of Notre Dame	11.23%	1.94%
University of Pittsburgh–Pittsburgh Campus	28.76%	8.90%
University of Southern California	22.10%	24.94%
University of Texas – Austin	4.46%	3.50%
University of Wisconsin – Madison	18.49%	4.37%
Vanderbilt University	10.91%	7.85%
Virginia Tech	55.23%	10.79%
Wake Forest University	13.70%	3.24%
Washington University in St. Louis	4.08%	2.22%
Worcester Polytechnic Institute	35.28%	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.

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.