For many Americans, affordability will be a major factor in their college decision. Therefore, it’s incredibly helpful to find out which schools have deep pockets and a generous disposition.

 So, how do you do this? Where can you find out how much is in a college’s endowment fund, and how likely is it that this college is likely to share it with you?

Using Harvard to Explain Endowments and Financial Aid

Before getting into the nuts and bolts, I’ll respond with another question: Did you know that Harvard has enough money in their endowment to pay for every student’s cost of attendance in perpetuity?  Yet Harvard still charges $70,000 per year.  My question for you is, “Why?”

It’s because they can.  It’s simply a matter of supply and demand.  There are plenty of parents who will gladly pay for the privilege of having that crimson bumper sticker.  If you can afford $70,000 per year, Harvard will gladly accept your money. 

However, if you CAN’T afford $70,000 per year, Harvard has $36 Billion in their endowment that can help you cover your costs.   If you’ve got the brains but not the bucks, Harvard doesn’t care—they want the best and the brightest, regardless of their ability to pay.

Some schools have lots of money, and some schools don’t.  Some schools give money to students in need, and some don’t.  We’re here to tell you where you can find this information online to help in your planning – so that you know where the money is and how likely an institution is to share it with you.

Finding Endowment and Financial Aid Figures

Focus on these two websites: 

  1. Wikipedia (yes, Wikipedia)
  2. CollegeBoard.org.

This research is essentially a two-step process.  First, using Wikipedia, you want to see which schools have the most money.  Second, you want to check the College Board website to see their track record of meeting need-based aid.

While Wikipedia has a wealth of information, we generally don’t think about it as a true research site.  For college endowments, however, they receive their information from NACUBO – National Association of College and University Business Officers—a source that keeps very good records of this information.  Wikipedia shows a simplified dashboard of NACUBO’s records.

 

  • Sequence 2: Checking the College Board website for corresponding financial aid stats
    • Step 1 – Let’s take the University of Virginia for example, which has an endowment of $8.6 billion. Go to collegeboard.org.
    • Step 2 – Scroll down, and type the University of Virginia into the search bar.
      • On the left-hand side, click “Paying.”
      • On the top horizontal pane, click “Financial Aid By the Numbers.”
        • From here, you will be able to see a host of information regarding the school’s financial aid track record:
          • Percentage of need-based aid that is met
          • Percentage of freshman that received financial aid
          • Average first-year financial aid size
          • Aid splits – work-study/loans vs scholarships/grants
          • Basic criteria that the college uses to determine aid
        • Here’s what it will look like:

 

 

Key Takeaways

As of 2019, the costs of college typically outpace inflation. As a result, more and more families are finding themselves eligible for need-based aid.  Use quick resources online (NACUBO, Wikipedia, College Board) to help you understand where the money is and how likely colleges are to use their endowments to help students and families.

Bonus Tip: When trying to find the most generous colleges, look for the schools that have sizeable endowments but smaller student populations. They are almost all private and very good schools. Here are several:

  • Washington and Lee University
  • Grinnell College
  • Wake Forest University
  • University of Richmond
  • Lafayette College
  • Tulane University

Please enjoy the rest of this article series on How to Utilize Online Resources for College Planning, and if you have questions, please ask!

 

Author:

Erik Fischer, CFP

This post is Part Six of a seven-part article series entitled How to Utilize Online Resources for College Planning. Part Seven will be published next Tuesday, November 26th, 2019. It will cover personal finance resources that are geared toward college planning.

Part 1: How to Research Scholarships

Part 2: Utilizing the College Board Website for Research

Part 3: College Planning Alphabet Soup – FAFSA, CSS, EFC, COA

Part 4: Researching Student Loans

Part 5: How to Check Your Admissions Probability for College

 

Have a question for a College Funding Coach® advisor?

 


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