Comparison Shopping, College Style

When shopping for a car, most people do not intend to pay the “sticker price.” Today most consumers come to the dealership prepared with the necessary information to make an intelligent offer for the car of their choice. Shopping for colleges is similar in many ways. Knowing your family’s Expected Family Contribution (EFC)—the amount each family is expected to pay before any aid is offered—is the foundation for your comparisons. Colleges must then be evaluated separately, based on the amount and type of aid they offer.

The Head, the Heart, and the Hand

Successfully choosing a college often requires factoring the “three h’s”—head, heart, and hand—into your decision.

When a student picks a school using their head, they are citing reasons they think are valid, such as strong academics or individual career aspirations. A key to remember is that it’s advisable to first pick a career, then a major, then the school.

Choosing a school with your heart—or “falling in love” with a school—can be the result of many factors. Maybe it’s the campus, or the culture, or a winning athletics program. Perhaps it’s the school that generations of family members have attended…or maybe it is where a student’s boyfriend or girlfriend plans to go. There is no question that the heart can play a role in the decision-making process.

Finally, there’s the hand, or the financial aspect of attending a particular college. The cost of each college, what that school will deliver, and how long it will take are factors that can also influence college selection. The hand can have a serious impact on the other “h’s” of college selection—and ultimately, your retirement, which is why we will discuss it just a little further.

Public Vs. Private

One of the biggest mistakes the hand makes is to evaluate schools based solely on sticker price. The notion that a public school is more affordable than a private one may not always be accurate.

How do we determine this? First, you should subtract your EFC from the school’s published sticker price (COA) to determine your need—or the “gap.” It truly matters how schools address your family’s need. Many public schools will meet 40-60 percent of your need while private schools can be as high as 70-100 percent. However, statistics show that more than 40 percent of aid is loans, so you have to go one step further to decide whether you’ll be accepting gift aid (“free” money) or self-help (loans). The example below shows the impact both types can have.

COA: $25,000
EFC: $15,000
Need/GAP: $10,000
Need Met/Aid (60%): $6,000
Unmet Need: $4,000

Need Met/Aid:
50% of Aid is Gift Aid: $3,000
50% of Aid is Self-Help: $3,000

Out of Pocket Estimate

EFC: $15,000
Self Help (Loans): +$3,000
Unmet Need: +$4,000

Out of Pocket Expense: $22,000

COA: $45,000
EFC: $15,000
Need/GAP: $30,000
Need Met/Aid (95%): $28,500
Unmet Need: $1,500

Need Met/Aid:
85% of Aid is Gift Aid: $24,225
15% of Aid is Self Help: $4,275

EFC: $15,000
Self Help (Loans): +$4,275
Unmet Need: +$1,500

Out of Pocket Expense: $20,775

Length of study should also be a concern. Statistics show students at private schools typically earn a bachelor’s degree in less time than they do at public schools. As a result, even if the private school costs a few thousand more per year, graduating a year earlier can still make the private school the better financial option.

Taking the time to be an informed consumer when selecting a college will be more than worth the time invested – cognitively, emotionally, and financially. Again: your head, heart, and hand at work.


This article was written by Todd M. Kelly

Todd M. Kelly, MBA/CCPS, is a financial advisor with Summit Financial Group. He has spoken to thousands of people nationwide about financial topics including short-term and late-stage college planning. Co-founder of College Planning Relief, Mr. Kelly is one of the leading financial planners in his field. He can be reached at

1 Comment

  1. Lisa Ricks

    This has been some of the most valuable information I have reviewed , since my journey has started to further educate myself and pursue a degree in an area of study that I kniw I’m destined to pursue. I am still researching, but this helps a lot. Thanks.

Leave a Comment

Your email address will not be published.