👩🏾🎓4 Keys to Cutting College Costs: How to Avoid Overpaying
As we’re in peak college admissions seasons, before your child submits their last application, consider the following information. Every year, I sit down with parents who thought they were doing everything right — saving in 529s, encouraging good grades, keeping an eye on tuition costs — only to realize they’re staring down a $300,000 price tag for college. It’s shocking, but not unusual. What surprises them even more is that there are ways to cut those costs dramatically — if you know how the college funding system really works.
That is why I wrote this blog titled “4 Keys to Cutting College Costs” – and will be hosting a webinar giving more info – see info below. After years of advising families, I’ve seen the same mistakes over and over: applying to the wrong schools, assuming every price tag is firm, and not understanding how aid formulas work. The truth? Paying for college doesn’t have to wreck your future or delay retirement. But it does take strategy — and a plan.
1️⃣ Parents Must Lead the College Selection Process
Let’s start with something many parents struggle with: handing over too much control to their teenager. I get it — you want your child to find their dream school. But here’s the thing: this is one of the biggest financial decisions you’ll ever make. You have the most to lose if things go wrong. That means you need to be in the driver’s seat, with your child as co-pilot.
I’ve seen parents let their kids apply “just to see” if they get in — and then face the impossible choice of turning down a dream acceptance or draining retirement savings. One father let his son apply to NYU even though it was a financial stretch. His son got in, and the family couldn’t say no. They ended up borrowing heavily and delaying retirement plans by years. Don’t put yourself in that position. I had another mother reach out because her daughter got into her dream school, Wellesley, and she asked me how she was going to pay for it. Yikes! I know I would not want to be in the position of telling my daughter she could not go there – even though we’d be speaking about her dream school for years!
Instead, set a clear budget early in the process. Before campus visits or Common App submissions, determine how much your family can truly afford. That way, your student’s “dream list” will align with your actual budget — not marketing hype or college rankings. It’s far easier to have that conversation now than after a financial aid letter arrives.
2️⃣: College Is a Buyer’s Market — If You Know Where to Look
Here’s some good news: college pricing is not as fixed as it seems. Despite all the headlines about skyrocketing tuition, higher education is actually a **buyer’s market** for most families. Roughly **90% of students at private colleges** and **60% at public universities** don’t pay full price. The average tuition discount at private schools is now more than **56%** — the highest it’s ever been.
So why don’t more families benefit from these discounts? Because they focus on brand names and elite schools — the ones that never need to negotiate. But for most colleges, especially small private or regional universities, competition is fierce. These schools are trying hard to fill freshman seats, and they’ll offer significant merit or need-based aid to attract good students.
When I show families how to compare schools, they’re often stunned. A $70,000 sticker price can drop to $30,000 or less once you understand how scholarships and grants are distributed. And these aren’t just for straight-A students. Middle-income and high-income families alike can qualify for merit-based aid depending on where they apply.
The takeaway: **apply strategically.** Avoid focusing only on top-ranked schools that rarely discount tuition. Cast a wider net and target institutions known for generous aid. Think beyond prestige — because the goal isn’t to brag about the bumper sticker. It’s to graduate debt-free.
3️⃣: Gather the PEGS — Price, EFC, Graduation Rate, and Starting Salary
Once you’ve taken control of the process, it’s time to gather data. I use the acronym **PEGS** to help families remember the four most important numbers they need before making any decisions.
**P – Price:** Every college lists a sticker price, but what you need is the *net price* — the cost after grants and scholarships. Each school is required by law to have a **Net Price Calculator** on its website. Use it before applying. It takes about 10 minutes and could save you thousands.
**E – Expected Family Contribution (EFC)** or the new **Student Aid Index (SAI):** This number, generated from your **FAFSA** and sometimes the **CSS Profile**, estimates what the government or a college thinks your family can afford. It’s not always accurate, but it helps you understand your baseline for aid. I recommend calculating your EFC or SAI as early as freshman year of high school. It gives you time to plan and adjust your savings or spending if needed.
**G – Graduation Rate:** Families often assume their student will graduate in four years, but that’s not the norm. Federal data shows only **54% of private college students** and **37% of public university students** finish on time. Every extra semester adds costs and lost income potential. Always check a school’s four-year graduation rate and freshman retention rate — two key indicators of student success.
**S – Starting Salary:** Finally, weigh the potential return on investment. A $250,000 degree that leads to a $45,000 starting salary isn’t the same as one that leads to $80,000. Sites like **freopp.org** and the **U.S. College Scorecard** show salary outcomes by major and school. These tools are eye-opening — and they help families make smarter, value-driven decisions.
When you gather all four PEGS for each school, patterns emerge. You’ll see which colleges offer the best combination of affordability, graduation success, and job outcomes. That’s how you turn a stressful decision into a confident one.
4️⃣: Understand How Financial Aid Really Works
Here’s where many families get tripped up. Financial aid sounds like free money, but not all aid is created equal. There are four main categories you need to know:
Grants – Need-based aid that doesn’t need to be repaid. Example: the federal Pell Grant (up to $7,395 for 2025–2026).
Scholarships - Merit-based awards given for grades, activities, or other achievements. Many colleges offer these to attract strong applicants.
Loans – Money that must be repaid. Start with the **Federal Direct Loan**, which has lower fixed interest rates than private or PLUS loans.
Work-Study & Tax Credits – Options that can help middle-income families offset costs through part-time jobs or education-related credits.
What surprises most parents is that **49% of all financial aid comes directly from the colleges themselves**, not the government.
➡️ That means your choice of school is the single biggest factor in determining how much you’ll pay.
Elite universities with massive endowments often meet 100% of demonstrated financial need — but they rarely give merit scholarships. If you won’t qualify for need-based aid, those schools will expect you to pay full price. On the other hand, smaller private colleges may offer large merit awards even to high-income families if your child’s GPA or test scores help boost their class profile.
⚠️ And here’s a bonus tip: **file your FAFSA early.** The application opens on **October 1st** each year, and early filers tend to receive more generous packages. State programs and university grants often run out of money quickly. Don’t wait until deadlines approach.
Don’t Overpay for a Degree
Every family wants their child to attend a great school — but paying more doesn’t guarantee a better education. I’ve seen families jeopardize their retirement because they assumed brand-name schools were the only path to success. In reality, smart shoppers can find incredible value at less-hyped institutions that offer strong programs, high graduation rates, and generous aid.
Think of this process like buying a home. You’d never purchase the first one you saw without checking the market, inspecting the property, and comparing prices. Paying for college deserves the same due diligence.
📲 Take the First Step
Paying for college is one of the largest financial commitments you’ll ever make — and you don’t have to do it alone. As a treat for attending my webinar, I offer a **complimentary 30-minute Student Aid Index (SAI) analysis**, where we walk through your numbers and explore schools that align with your student’s goals and your budget. It’s personalized, actionable, and can potentially save families thousands in college costs.
With proper planning, we CAN find the right school at the right cost.
🐝 FAQ: Cutting College Costs for High-Earning Families
What are the biggest levers to reduce the price I actually pay?
Target schools where your student ranks in the top 10–25% of applicants (drives merit aid), compare net price calculators, stack departmental awards, and use multi-school offers to request a professional judgment review. Don’t chase “rank”—chase fit + funding.
We’re high income—should we focus on merit or need-based aid?
For many high-earning families, merit is the primary discount. Still file FAFSA (and CSS Profile if required): some schools won’t award institutional merit without it, and assets/income can shift year to year.
How do test-optional policies affect merit scholarships?
Many schools still tie top merit dollars to submitted scores. If scores are at or above the school’s 75th percentile, submit them. If not, go test-optional and lean on GPA, rigor, portfolio, and leadership to compete for holistic merit awards.
Can I appeal a financial aid or merit offer, and what helps the case?
Yes—send a concise, factual appeal. Provide competing offers, any updated academics, and any special circumstances (job change, medical costs, eldercare, business volatility). Ask for a review rather than demand; thank them and set a clear reply date.
What’s the smartest way to use 529 plan funds without wasting tax benefits?
Coordinate 529 withdrawals with the same tax year the expenses occur, keep receipts, and avoid double-dipping (don’t claim the same expenses for American Opportunity/LLC credits and 529 withdrawals). Use low-basis 529 dollars for tuition/fees and cash flow other items if needed.
Which loans should we consider last—and how do we keep debt reasonable?
Start with the federal Direct Student Loan in the student’s name, then compare Parent PLUS vs. credit-qualified private loans. Cap total student debt near expected first-year salary; for parents, avoid loans that jeopardize retirement or liquidity.
Do CSS Profile schools treat high-earner assets differently than FAFSA-only schools?
Often yes. CSS schools may assess home equity, business interests, and non-qualified assets more deeply, and they can ask for more documentation. Model costs across FAFSA-only vs. CSS schools—net price can differ dramatically.
How do I read a college merit award letter without getting misled?
Merit award letters are not standardized, so it’s easy to misunderstand the real out-of-pocket cost. Focus on these items:
1. Separate free money vs. loans. Loans are not aid — they are debt. Only grants and scholarships reduce cost.
2. Look for renewable vs. one-year awards. Some big scholarships only apply to year one unless GPA or credit minimums are met.
3. Compare the “net price,” not the award amount. Net price = tuition + room/board + fees – grants/scholarships.
4. Check hidden or rising fees. STEM fees, lab fees, studio fees, and course-specific surcharges can add thousands.
5. Verify if aid will change after year one. Some schools refigure packages annually; merit may stay flat while costs rise.
Reading award letters the same way across all schools helps avoid overpaying and keeps the decision centered on value, not marketing.