High School Grades Could Be Worth $100,000. Time to Tell Your Child?

Most colleges and universities now use a “merit” aid strategy to solicit teenagers. Your eighth grader probably ought to know how it works.

Credit…Robert Neubecker

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By Ron Lieber

This article is adapted from “The Price You Pay for College: An Entirely New Road Map for the Biggest Financial Decision Your Family Will Ever Make,” by Ron Lieber. Harper, an imprint of HarperCollins Publishers, will publish the book on Jan. 26.

Financial aid is no longer just about what you earn and what you have. It’s also about your children and what they do — and that means that good grades can be worth a whole lot of money.

In the past quarter-century, an ever-growing number of schools — both public and private — have begun using aid as a weapon to try to increase their institutional prestige. In many cases, it is bait for students who can raise the school’s profile in the eyes of the rankings overlords at places like U.S. News & World Report. In others, it’s become so rampant that discounts are necessary just to keep heads in the beds and pay the light bill.

It goes by the name merit aid, and it’s not the same as the more limited academic scholarships of a generation ago. Now, admissions officers often report to bosses with the words “enrollment management” in their titles, and they can spread the money around much more broadly.

“Aid” is a bit of a misnomer, albeit one that we seem to be stuck with. It’s not a scholarship as much as it is a coupon in many cases, one whose value may depend on applicants’ traits ranging from their ZIP code (which can signal affluence) to how quickly they open an email invitation.

But the merit part — actual academic and leadership prowess — can also matter plenty. That means that grades aren’t just a factor in getting into a first-choice school, but also in what you might pay for a residential undergraduate education.

The result is an elaborate parallel financial aid system that can totally upend the psychology of picking a college.

And because nearly all but the most selective schools now use merit aid at least a little, list prices are increasingly irrelevant for most families. Classrooms at public institutions like the Universities of Delaware or South Carolina and private ones like Occidental College in Los Angeles or Syracuse in New York State have become more like airplane cabins, where people often pay many different amounts via extensive menus of possible prices.

Over several years on the road talking to scores of college presidents, faculty members, enrollment deans and families about what we all should be willing to pay for college, I’ve learned how much of a head trip the merit aid system has become.

And just like drugs, you should talk to your kid about it before someone else does.

A Family Chat About Vicious Math

Any eighth grader with a web browser can sniff out the stakes.

Georgia high schoolers might aim for the Hope Scholarship, where a 3.0 grade point average or above can lead to thousands of dollars per year off the price at the University of Georgia and other schools. At the University of Oregon, there is a range of discounts, and the school lists different tiers of grades as the “basis” for awards.

A few private colleges are daring enough to broadcast the possibilities on their websites.

Wabash College in Crawfordsville, Ind., is one. There, a 3.0 to 3.24 grade point average plus an ACT score of 20 to 22 yields a $17,000 discount each year off the rack rate of $60,000 or so for tuition, room and board. But the 3.9-or-above student who scores 29 or higher gets $32,000 per year. That’s $128,000 over four years.

But how — and when — should you tell your child that their high school grades might be worth six figures?

If you haven’t been talking about money all along, a basic conversation may be in order first, to prepare teenagers to take it all in. Roughly how much money have you saved for college, if any, and how much do you make? You would need to put this on financial aid forms, in any event.

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