Is his newly published book, The Price You Pay For College, New York Times money columnist Ron Lieber breaks down the merit aid system that runs parallel to the traditional financial aid system in determining the price you’ll ultimately pay for your child’s college education. Merit aid differs from traditional need-based financial aid in that it does not consider a student's financial need but rather is awarded based on academic or other factors.
Over the past several decades, as tuition has regularly outpaced inflation, merit aid has become an important tool for colleges and universities trying to remain competitive or increase the selectivity of their student body.
The merit aid practice is akin to what economists refer to as “price discrimination” (and what everyone else calls “discounting”) and is a way for colleges to manage revenue and their yield (that is, the number of students accepted who actually agree to come). So with the price of college regularly outpacing base inflation, even some children of one-percenters might get some merit aid—that is, a discount disguised as a scholarship to make them feel more inclined to attend a particular college over another.
Beyond explaining the basics of this merit aid system, Lieber also provides a guide to approaching the college admission process with the idea of “value” in mind rather than the “education at any cost” model.
I highly recommend this book for anyone with kids approaching college age as it also gives some structure to thinking about what you and your child want out of a college experience and the particular aspects you might be willing to pay more for. Lieber also has good advice for talking to teenagers about money issues and priorities in the lead up to the college application process so that your expectations are aligned at the outset before any acceptance letters or aid packages roll in.
Here is further info: https://ronlieber.com/books/the-price-you-pay-for-college/
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