As a college consultant, I’m often asked how to best cut the cost of college. Parents want to know where their kids can land scholarships.

Of course, these parents are thinking about third-party scholarships, from big companies like Intel or Texaco, or from organizations like Rotary or the DAR. Or they may even be thinking about the lesser known (and more hilarious) scholarship competitions, like the one created by Duck Brand duct tape, in which students construct prom outfits entirely out of duct tape.

The fact is that the overwhelming majority of financial aid comes from colleges themselves. Colleges offer scholarships — sometimes full rides — to the students they value most. So the best strategy for saving money on tuition is to choose the college that values your kid.

Why is this? Well, colleges are not simply in the business of providing a service. They are also communities, and admissions officers are charged with attracting students who will contribute to and enhance the community as a whole.

It’s weird to think about, but higher education in the United States is perhaps the only business where the provider chooses which customers will be lucky enough to purchase their service. Moreover, colleges do not price their service the same for every customer. For those students it values most, the college offers deep discounts to lure them onto its campus.

While this may seem a bit unfair, it’s certainly not unusual. Think about how professional athletes are recruited and paid. Generally, teams will pay more for the number one draft pick than they will pay for players further down in the list. And not every team values the same players in the same way. Some teams will pay the premium for a star pitcher or linebacker, if that team really needs to fill those positions to win championships. The salary offer a team makes to a particular player depends on what the team needs at that time, as well as upon the skills and qualities of the athlete. (The offer may also depend on the team’s ability to pay: the Yankees have a bigger budget than the Rockies. So it is with colleges: Some have bigger financial aid budgets than others.)

The same college offers different prices

To illustrate how this works at college, let’s consider two theoretical students who come from families with identical financial situations but who have different academic abilities or extracurricular talents. These two students apply to the same college.

The school may find both admissible, but one student is considered more attractive than the other: perhaps he’s a football star, or an incredible writer and editor, or a talented musician. Maybe his grades are better or perhaps he has a higher SAT score. To attract this desirable student, the college will shower him with merit scholarships (which are really discounts off the tuition price). The other student, however, is not offered scholarships because, while he is a "good enough" customer, he is not one who the college values enough to lower the price.

To further illustrate the point, let me give you a real-life example. A current client of mine applied to about 10 private, selective colleges. Three rejected him outright. Three others offered him admission but without financial aid. For these, my client was deemed “good enough” for admission but not so attractive that they would give him tuition discounts. Two offered him about $10,000 per year in grants — or discounts — to offset the price of admission; they liked him enough to entice him to attend. But two colleges really pulled out the stops: They offered him discounts of nearly 75% off the full price of tuition and then offered other forms of financial assistance to sweeten the deal. Guess schools he is strongly considering? (And guess whose parents are doing a little happy dance right now?)

So what should you be thinking about as you embark on the college search?

• First off, don’t be scared off by the price of tuition. Few families pay the full price. Think of shopping for colleges like shopping for a new car: The sticker price is a guideline, but it’s not necessarily the price you will pay. As you shop, then, remember that admissions and financial aid officers resemble used car salesmen: “For you, let’s make a deal!”
• Second, do your homework. Choose colleges that are likely to value your student for who he or she is. Find the perfect match between the needs and wants of the college and the talents and aspiration of your student. A perfect match will not only lead to an offer of admission; it may well lead to a deal you can’t refuse.

Mark Montgomery
College Consultant
http://greatcollegeadvice.com