A conversation with Dan Lundquist, longtime college admission expert and vice president for marketing and enrollment management for The Sage Colleges:
For the last 20 years, Lundquist has visited area high schools and given a variation on the same speech: "find the right college first, then investigate your cost after financial aid, and try not to let sticker price deter you."
"The old mantra used to be: 'how to you get in college?' but that's flip-flopped in recent years and now it's ‘how do you afford it?’ because people are much more concerned about cost."
Lundquist says the words “price” and “cost,” synonymous to many people, are very different when it comes to their usage in terms of tuition. "Price is the sticker price," he said. "The cost is the net cost to the family after financial aid has been applied."
Referring to findings in several recent studies, Lundquist said "actual out-of-pocket costs to most families have actually gone down over the past 10 years, although the price tag keeps going steadily up."
In fact more students receive financial aid than ever. Last year at private four-year colleges, 89% received an average of $16,265, and at public four-year colleges 76% received an average of $8,735 according to the National Center for Education Statistics.
How do they get to those resources that'll make it cost less?
The first step, he said, is to fill out something called the FAFSA -- or the Free Application for Federal Student Aid (found at fafsa.ed.gov). On this application families list their assets and liabilities, cash-flow and income, but retirement and home-equity assets are excluded.
Lundquist called the FAFSA "the master key to financial aid. It's the form that every college is going to require. It's the form that state and Federal governments require," he said. “Some also require the PROFILE so families should check with each college.”
The FAFSA is free, online, and is the method by which people apply for Federal student financial aid. Lundquist did it last year for his daughter. "If it took me 15 minutes, I'd be surprised," he recalled. "It's easy, unless you've got a complicated financial situation."
Later, after future college students have narrowed down the list of schools they wish to attend, and applied for admissions to them, Lundquist said it is important to find what all colleges' financial aid policies are. "And there's nothing standard about that," he warned.
After the FAFSA is processed, the government will send the applicant a report which shows how much the parent will be expected to pay -- a bottom-line number. That determination is made without any knowledge of where the student will ultimately study.
"The expected contribution doesn't have any correlation to the college's price, it only correlates to the family's ability to pay," according to Lundquist.
If the formula suggests a family can contribute $20,000 a year to their daughter's education, and she attends a community college in New York, no financial aid would be dispensed to the parents or daughter, though they could apply for loans. But if a child is headed to a higher-price college, they are eligible for assistance to help with the total cost of attendance.
"If my daughter ends up going to The Sage Colleges, for example, which costs $18,000 more than the calculated family contribution, then she's going to show financial need," he said. "Her need is $18,000 and the packaging – awarding the pieces of the total aid package – begins there.”
"Each individual financial aid office acts as a hybrid of a broker and a provider, too, because the first money the college is going to provide is O.P.M. – Other People's Money."
And that begins with the Federal government. If the applicant is from a low-income background, the school will apply a Federal Pell Grant and a Federal Supplemental Educational Opportunity Grant, or SEOG.
If they're not low-income, they'll apply an interest-free Stafford Loan. "If they're not eligible for a subsidized Stafford loan because their income is too high, we might then offer them an unsubsidized Stafford loan, so the government isn't covering the interest rate, but it's still an attractive, competitive rate."
They'll then look at New York State sources of financing.
There are two New York State-based scholarship programs. The first is called Bundy, and it indirectly benefits students because it's given directly to colleges based on the number of residents of New York who are enrolled there. The other is TAP: Tuition Assistance Program. Depending on family income, applicants will get between $500 and $5,000.
"Sage would then offer a job, and the average this year is about $2,000, and then add all that up."
"Remember," says Lundquist, "the FAFSA said we could pay $20,000. So, $6,000 has been covered by outside money – including loans – and the job. That means a $14,000 unmet need.
"And now, at the last stage of the formula, a college will apply some amount of institutional money. That doesn't mean that the family will get $14,000 in cash. But at Sage, for example, we're going to credit you $14,000, which means the family will be charged $14,000 less."
"Students are under no obligation to pay grants back," Lundquist said with a smile, "but those fundraisers will be calling asking for support."
"We're a relatively small place," Lundquist said. "Even though we're a moderately priced for a private college, we've got a larger price tag than state schools, and a lot of people are going to get stuck on that price tag."
"After financial aid is applied, for a lot of families, it's about the same price to attend a private college as a public."
Lundquist believes many people are overwhelmed. "We are talking about two of the most important things to parents: their kids and their money.
"In the college search, look past the price tag and focus on 'best college for my child.' Investigate financial aid. It is important but it is not as complicated as many think," he says. "There are a lot of resources out there." And there are more than 3,000 colleges and universities.