Funding for college (financial aid, if you will) was originally looked upon as a charitable operation run within the institutions. With rising costs, increased competition, and escalating financial pressures, this has changed dramatically. Financial aid has now become a strategic marketing tool, which is commonly used by colleges and universities to recruit those students they would most like to enroll.
Although very few families have actually saved enough to pay their children’s college educational costs, most have saved some. Unfortunately, those college savings ultimately hurt the student’s funding eligibility, and, in many cases are needlessly spent.
To best understand, it’s important to know that each institution’s business approach is basically the same: get the family to pay as much as possible and still get the student to attend. Colleges and universities are in an enormous bidding-war for the best blend of good students and paying customers.
How It Works
Funding for college comes from three basic sources: the private sector, the federal government, and the institutions themselves.
Contrary to the common myth, private sector scholarships (Target, Wal-Mart, and the local Rotary Club, for example) make up less than 3% of all funding awarded annually. The federal government and the institutions are responsible for the remaining 97%, with the colleges themselves being the biggest contributor by far.
Colleges and universities control the entire funding process; having the final say on nearly all awarded funds. The schools are responsible for the distribution of all federal monies. And, even more importantly, colleges also offer their own endowment funds (in addition to federal funds) to entice preferred students’ attendance.
Endowment Funds: commonly labeled by colleges as scholarships, grants, and tuition discounts, endowment funds are actually rate reductions off of the institution’s advertised cost of attendance. The vast majority of institutions use these “reductions” to attract the best blend of good students and paying customers. Endowment funds are plentiful, with over 50 institutions across the country having in excess of $1 Billion and another 300+ having over $100 Million at their disposal.
College is a business, big business!
To help determine their endowment offer, each institution first inventories both the parents’ and student’s assets and income to determine what the family can pay, or as they like to put it – contribute.
Without the proper guidance, practically all of the student’s and parents’ assets are there for the taking and are eventually absorbed by the college. The worst part is that families have no idea how much ‘less’ they could have paid, or better still, how much more the college would have contributed through their endowment funds.
We work closely with a college planning organization that will accompany the family and the student from their sophmore year in high school all the way through their freshman year in college....all for one reasonable fee. The service goes far beyond the basic elements of college tuition as listed below.
FINANCIAL- Funding types, Funding evaluation and negotiation, Asset repositioning, Completion of applications
EDUCATIONAL- College search, selection and admission, Career options, Standardized testing, Cirriculum, Goals and desires, Resume builder
SOCIAL- Community involvement, Volunteer activities.
IF YOU HAVE A COLLEGE BOUND STUDENT, GIVE ME A CALL AT (310) 251-5762 OR EMAIL ME AT RAY@WALSTINEFA.COM TO ARRANGE A MEETING. I CAN HELP YOU AND YOUR STUDENT PLAN FOR COLLEGE!
