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Go to College In-State, They Said

As one of three children growing up in suburban Northern Virginia in the 1990s, my mother and father strongly urged us—well, commanded is more like it—to pursue one of the following two options for higher education: in-state…or in-state.

My older sisters went to Virginia colleges, and surprise, surprise I did too. There was no real discussion or any significant exploration of private and out-of-state schools on the table (except for maybe my parents’ alma mater).

There was nothing wrong with this approach at the time, especially since Virginia had such a variety of affordable and great state schools, but as we will see, this approach nowadays is a little self-limiting.

I promise I am not writing this to complain about or badmouth my loving parents; quite the contrary, they did their best and I am very grateful to them for my start in life. Many aren’t so fortunate.

Most parents, however, simply don’t know what they don’t know, and I thought I might help “flip the script” when it comes to talking to your kids about what types of colleges to pursue.

My goal is simply to open the door to more possibilities for your family without creating undue financial duress!

The Problem with Private College Sticker Price Shock

The total cost of attendance for private schools nowadays can exceed as much as $80,000 per year, and for most families, that isn’t anywhere close to being affordable. The University of Chicago, for example, listed its 2021-2022 cost of attendance as $82,848. Without any financial aid, that’s more than $330,000 over four years!

Even families that make a good income struggle with costs like these, especially when living in a metropolitan region with higher costs of living (i.e., New York, Los Angeles, Washington, DC, etc.) and facing a steep Student Aid Index.

This makes in-state public schools—often with sticker prices less than half that of private schools—seem much more attractive. And, unfortunately, out-of-state public universities don’t seem much more of a bargain at first glance.

As a result, many families, much like mine, may feel a bit pigeonholed into pursuing only in-state public colleges and universities.

There is nothing inherently wrong with an approach that focuses on in-state schools, but what if you live in a small state that lacks the academic breadth that your child needs? What about students who have a specific academic or personal focus that is simply not going to be met at in-state public schools?

A great example of this is a student who thrives best in a more intimate learning environment and probably would “drown” in a big state school where the resources are spread thin.

Private Colleges = More Flexibility When It Comes to Financial Aid

Here’s the kicker: sticker price can be incredibly misleading. Most parents don’t pay it.

Why? Many private colleges are known for their flexibility when it comes to financial offers and subsequent appeals (for both need-based and merit aid).

Many private schools are reasonable and willing to work with you, especially if you have a competitive award offer from a similarly tiered school.

Financial Aid Appeals & Leveraging Financial Aid Packages

In short, there is zero negative impact that can happen after your student is accepted if they make an appeal to the financial aid office. In fact, we recommend every family do it (what do you have to lose, right?).

You’ll want to make sure that you ensure your best chances for success by learning how the appeal process works.

I also generally recommend applying Early Action to your top choices rather than Early Decision so that you are not bound to one school. This approach, in turn, will give you more negotiating power by giving you more time to gather information and leverage offers from other schools that want your student.

Webinar: The Financial Aid Appeals Process: What You Need to Know

Case Study: Private College vs. In-State College

I just went through this appeal process with a family last year. Their student applied to a host of private colleges, but this family had an income of $350,000 per year and initially received $0 in need-based aid when the offer letters initially rolled in.

After a flurry of appeals that demonstrated this student needed some financial assistance or she would be attending an in-state school, she earned $42,000 per year in grants & scholarships from Washington University in St. Louis.

Is $168,000 in grants ($42,000 per year x 4 years) enough to close the gap for your family to be able to afford private school? For this family, the net out-of-pocket cost for their daughter was less than the top school in her state, the University of Maryland.

Case Study: What Do You Do When the School You Want to Attend is Just More Expensive After All Is Said and Done?

“Raj” wanted to study computer science and was accepted to two exceptional schools: the University of Virginia and Purdue. As a resident of Herndon, Virginia, his parents desperately wanted him to attend the top university in their state and pointed to the U.S. News rankings where Virginia (#25) was on top of Purdue (#49) at the time.

Webinar: Narrowing Down Your List of Schools: The Importance of Financial Fit

Raj pointed to the rankings for their respective computer science programs, however, where Purdue was ranked #20 and UVA only #30. He simply felt that Purdue was a better academic and cultural fit for him, and the finances weren’t his primary consideration.

His parents felt otherwise but loved their son and ultimately supported him in his decision even though the net (out-of-pocket) difference was more than $10,000 greater than the University of Virginia.

Raj, however, was able to earn a renewable $5,000 merit scholarship during his freshman year, and Purdue froze his tuition for his time there.  He funded the rest with student loans. In the end, Raj thrived at Purdue, graduating early with a job making an excellent salary working for one of the largest tech companies in the world.

Just in case you get the wrong notion from this story (e.g., send your kids to the most expensive school and assume everything will be fine), I want to explain why this worked out for Raj:

  1. While Raj attended the more expensive school, he took tremendous steps to mitigate the cost difference with UVA (graduating early and getting extra merit aid).
  2. He was also a driven student who understood what he wanted to do. This field of study and subsequent career path tend to be high-paying, which helped take care of his student loans.
  3. Raj fit in better at Purdue than he would have at UVA, and the return on investment was just as good if not better than pursuing the financially “seductive” in-state option.

While this worked out well for Raj, it is important to stress the importance of financial fit. College rankings are a fine place to start in the college search, but there are so many other factors to explore, including cost. If Raj’s family really needed to save money or had cash-flow issues, then it would have been prudent to consider an in-state option or “lower-tiered” school that would give Raj more money to attend.

How Do Families Afford Private Colleges?

Every family’s financial situation is different, but there are two main paths you can take to help make private colleges more affordable.

The Need-Based Aid Route

Low-income families with good students should look closely at private and public colleges that meet 100% of need.

Additionally, some medium to high-income families don’t realize that they may qualify for need-based aid for some of the more expensive private schools out there.

If you are more visual, here is one of our favorite slides from our Little-Known Secrets of Paying for College Workshop, which shows that the right combination of need-based and merit-based aid can make some private colleges much more affordable.

The best way to figure out what you might pay is to do an SAI estimate, understand what this number means, and research net prices at specific schools.

If you are a little overwhelmed by all of this, we can help connect you with a college financial coach who will help you find the right financial fit and strategize how to save and pay for college without ruining your retirement.

If you’d like to learn more about how need-based aid works, check out the following blog posts:

College Financial Aid: Know the Rules!

The EFC Mumbo Jumbo

16 Questions About FAFSA and Financial Aid

6 Major Changes to the FAFSA

Paying for College for Divorced Families: A Closer Look at Financial Aid Strategies

The FAFSA vs CSS Profile for Divorced Parents

8 Tips for Writing a Successful Financial Aid Appeal Letter

The Merit-Based Route

This is the path that a family with a high EFC will likely take. However, it should be noted that the merit-based and need-based paths tend to overlap at some private colleges.

The big merit aid you get is from the colleges themselves, not outside sources. Some colleges award automatic merit aid based on GPA and/or test scores. Do some online sleuthing and research the following:

  1. Figure out who is generous with merit aid and how you get it. Is merit aid reserved for the best students, for students with specific skills or interests, or for students from certain geographical areas?
  2. Of these schools, who gives the most merit aid to the largest percentage of students?
  3. How might your student access this merit aid?

If your student is interested in out-of-state public schools as well, you’re not going to get any need-based aid, so you must search out those schools that are taking great strides to attract strong, non-resident students.

Here are two good rules of thumb to follow when it comes to merit aid:

  • Your best chances at merit aid are at colleges where your student would be in the top 25% of the student body academically.
  • If you have the luxury of time, start saving early and encourage your child to get good grades. Merit awards are not tied to how much your family makes.

Find what you will pay at prospective schools: Get Your Free College Money Report

Further Reading on Merit Strategies:

What Is a Tuition Discount?

Understanding the Concept of College Fit

How Out-of-State Students Can Get In-State Tuition

Consider Going Out-of-State for College

A Note on Private Scholarships/Outside Aid

There is a lot of confusion over whether it’s worth your time and energy to go for outside scholarships.

There’s no simple answer, but there are a few basic things you should understand before you dive into the world of private scholarships:

You will very likely NOT win a massive private scholarship, but this doesn’t mean you shouldn’t apply for private scholarships. You should just tweak your strategy.

Lots of families have met some success by creating a process and application schedule before junior year of high school, not overlooking the smaller, local scholarships, and CONTINUING to apply for scholarships AFTER senior year of high school.

Some colleges practice “scholarship displacement,” meaning that they will adjust your financial aid based on how many scholarships you are bringing in. Look up how each prospective school deals with this issue.

If you want to make private scholarships a piece of your college-funding strategy, check out how to “attack” them with reckless abandon!

And the Award Goes to Students That Apply for Scholarships

When Should You Apply for Scholarships?

Get Started with Scholarship Owl

I hope this blog was helpful as your family plans wisely for college. Feel free to reach out to our team here at The College Funding Coach® if we can help in any way. Good luck!

Thankfully there is an abundance of late-stage strategies to cover the cost of college, but if you want to create peace of mind early and financial flexibility in the future, it is safest to make a good plan to pay for college sooner rather than later. We can connect you with coaches who understand college funding within the broader context of financial planning.

Schedule a Free Consultation


James L. Hicks, CFP®, ChFC®, ChSNC™, CFBS, CLU®, CPFA®, MBA

Jimmy Hicks The College Funding Coach Picture









Further Reading:

Is an Ivy League Education Worth the Cost?

Why Is College So Expensive and What Can You Do About It?

14 Ways to Minimize Student Loans

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