How to Measure a College's Financial Generosity

Evaluate how much financial need a college meets and the breakdown of grants versus loans.


Many families dream of their children winning a full ride to college either through brainpower, sports, or other talents. In reality, the chances of winning a full ride are infinitesimal. According to a new book, Secrets to Winning a Scholarship by Mark Kantrowitz, only .3 percent of students receive enough scholarships and grants to cover all their college costs.

If your family will need significant financial aid, you will increase your chances of receiving a lot of outside help if you get accepted to the nation's most generous colleges and universities. The schools with Cadillac financial aid packages will meet 100 percent of a student's demonstrated financial need.

[Avoid 4 common financial aid myths.]

Here's an example: Let's say that the financial aid methodology says your family can afford to pay $20,000 for one year of college. Let's also assume that the college you want to go to costs $50,000. If you get accepted to a school that meets 100 percent of your financial need, your family would pay $20,000, and the financial aid package would include $30,000. The schools with the best aid practices do not include loans in their financial aid package.

All this might sound great, but here's the hitch: The schools that are most generous are also among the most elite. Schools like Yale University, Smith College, Pomona College, and Middlebury College are extremely hard to get into, but if you are accepted into one of these schools—and need financial aid—you've struck gold. U.S. News compiled a list of schools that claim they meet the full need of their students, and you can see by looking at the names that many of them are elite institutions.

The vast majority of private and public colleges and universities can't provide the sort of sweet deal that the schools on the U.S. News list offer. In a higher-ed industry survey, only 32 percent of public institutions and 18 percent of private colleges said they meet the full financial need of accepted students.

[Read 3 ways the government overestimates your ability to pay for college.]

Since most teenagers aren't going to qualify for elite schools with their awesome financial aid, what can they do? They should evaluate any college by asking two questions:

1. What is the average percentage of financial need that the college meets? While most schools can't come close to offering 100 percent of need, it's best to find schools that meet the highest percentage of need possible. The numbers for individual schools are all over the board. Some schools might meet 60 percent of need, others 85 percent or 74 percent of need, or any other number.

2. What is the college's average breakdown of loans versus grants? As a practical matter, nearly all schools will use loans in their packages, which is why you will want to pay attention to the percentage of loans versus grants in the average aid package. You can find all these figures for individual schools on sites like U.S. News and the College Board.

I'm going to use Wofford College, a private liberal arts college in South Carolina, as an example, using Wofford's financial aid statistics from the College Board's site. The average percentage of need that the school meets is 86 percent, which is very good. The average aid package is $29,916 for a school where tuition and room and board totals $40,580. The average need-based grant is $28,448. Of the total undergraduate aid awarded, the breakdown of Wofford's scholarships/grants versus loans/work study is 86 percent to 14 percent, which is great.

Now that you know how to evaluate a school's financial generosity, let's see you try it with colleges on your list.