Chasing prestige vs. chasing merit

There is an adage in the world of college admissions that goes something like this: you can either chase prestige, or you can chase merit, but you can't chase both.

What does this mean? Assuming that your family does not have a college fund large enough to cover costs at one of the nation's most expensive colleges—a number that can approach $100,000 a year once you factor in room, board, travel, and other costs—your family will need to take finances into account when your high school student is deciding which college to attend.

If your family income and assets are low enough, you may qualify for need-based financial aid. In such instances, and if your student's grades and test scores are strong, it may be strategic to "chase prestige" at some highly selective colleges, which tend to be generous with their need-based financial aid awards.

If your family is in more of a middle income bracket where you do not qualify for significant need-based financial aid, you may find it advantageous to "chase merit" at schools where your grades and test scores are in, say, the top quarter of their incoming freshman class because these colleges may be quite generous with merit-based scholarships.

There are a number of ways to determine how generous a college is with merit scholarships. You can look up the list of merit scholarships on a college's admissions website and find out what they offer. For example, Vanderbilt University, one of the most selective colleges in the country, has merit scholarships unlike some of its peer institutions. However, Vanderbilt acknowledges right on its website that only 1% of all admitted students get one. Compare that to the University of Alabama, which has a long list of scholarships for both in-state and out-of-state applicants. Another strategy is even more direct: call the admissions office and ask, "What percentage of admitted students get a merit scholarship and what is the average merit scholarship offer?" I also have this information for hundreds of colleges, and am happy to share what I know.

If you'd like to learn more about financial planning for college, use the contact form on my website to schedule a free consultation today!