Beware of Preferential Packaging

Many students who apply to college end up being disappointed at what’s wrapped up inside their financial aid packages.

There is a way, however, to reduce the chances that this will happen to you. Be realistic in the schools you target.

Here’s the key reason why:

Colleges and universities possess a finite amount of money for financial aid. Most schools can’t give handsome financial aid or merit aid to all the members of their incoming freshman class. Unfortunately, most families have no idea that this happens routinely.

The Realities of Preferential Packaging

Since funds are limited, colleges typically reserve their so-called preferential financial aid packages to the students they really want. If you read marketing materials from colleges, however, you usually won’t get the sense that financial aid is heavily determined by a college’s excitement or lack of enthusiasm for an applicant. Financial aid realities are a topic that admission officers rarely broach with families.

In nearly all cases, a student with a 4.0 GPA and commensurate test scores is going to receive a better award than one who has a 3.6 GPA or a 2.9 GPA.

I have a rare chance to actually show you the impact that a child’s academic achievements can have on financial aid packages thanks to a spreadsheet that my friend Paula Bishop, a financial aid expert and a CPA in Bellevue, WA, shared with me.

Being the the Pacific Northwest, she has had lots of clients apply to the University of Portland and she showed me how grade point averages have impacted the awards. As you can see from the illustration, the applicants with the highest GPA’s received better deals. Take a look….

University of Portland Aid Awards

To make sense of this illustration, first look at the GPA for each of the four applicants at the bottom of each column. The students with the highest GPA (3.99) received the best treatment. The Catholic university met 92% of this applicant’s financial need. The lower the GPA, the less generous the school was.

The student with the weakest GPA (3.5) in this spreadsheet only got 41% of his/her financial need met and 40% of the award was in loans and work study.  This is true even though the student needed a lot of money to attend this school. The student’s Expected Family Contribution was $14,072, but the cost of attending the University of Portland was $47,460.

One way you can get a sense of where you stand compared to other teenagers applying to a school is to look at the academic profile of the most recent freshman class.  You can find those from such sources as the popular Fiske and Princeton Review guides, through the federal College Navigator and the College Board. I pulled the following snapshot from the College Board:

Academic Freshman Profile at the University of Portland

Even though you can’t pinpoint the exact numbers, you can see that many students who attend Portland have a GPA above 3.5 and are also in the top 10th of their graduating high school class. So a child applying with a 3.5 GPA would have a lot of competition for awards.

Applying Strategically

How can you use this knowledge about preferential packaging to your advantage?

I’d suggest that you read a candid explanation about preferential packaging from Muhlenberg College, a lovely liberal arts college in Allentown, Pa.. Muhlenberg is a rare institution that is actually candid with families about how colleges parcel out financial aid. Here is an excerpt from The Real Deal About Financial Aid, posted on the college’s website:

Read More:

What Financial Aid Can a 3.0 Student Get?

What’s Missing From the Financial Aid Letter?

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