My College Corner checks in with subject matter experts and innovators to keep abreast of hot topics, particularly as we explore how technology is changing the landscape. We asked Kim Strauch, Co-founder of Sharp, for her view on this topic and she sent us this article. Thank you, Kim!
The cost of attending college continues to rise. Four years at a private university costs families an average of around $27,000 per year after financial aid, and for families who don’t qualify for need-based grants, the real number is often much higher. Out-of-state public universities routinely run $30,000 to $40,000 per year. These aren’t hypothetical numbers. They are what families are actually paying or taking on in loans.
With those costs in mind, spending a few hundred to a few thousand dollars on SAT or ACT prep can look like a rounding error. But the question is whether a higher score can actually move the financial outcome enough to justify the investment. In most cases, the answer is yes, and often dramatically so.
How a Higher Score Opens Access to Better Financial Aid
The most selective colleges in the country are also, surprisingly, often the most affordable. Schools like MIT, Harvard, Princeton, and Yale meet 100% of demonstrated financial need for admitted students. Some are need-blind in admissions, meaning a family’s ability to pay does not factor into the decision at all. Families earning under $100,000 often pay nothing at select schools such as these, while families earning $150,000 or more frequently receive substantial grants.
Admission to these schools is genuinely competitive, and test scores can be a large part of what makes an applicant competitive. A student who improves their SAT score from 1380 to 1480 or ACT score from 30 to 33 will not only be more competitive at the schools of their choice, but they may also receive more financial aid. Increased aid at private colleges could result in making private schools with big sticker prices as affordable as an in-state school.
A higher score does not guarantee admission, but for students in reach range, it can be the difference between a realistic application and a long shot. And a tipping point for enough financial aid to make the college affordable.
Merit Scholarships: Where the Math Gets Very Concrete
Many universities publish explicit scholarship grids that tie award amounts directly to test scores and GPA. These are automatic, with no separate application, no essay, and no competition involved, and they can be substantial.
The University of Alabama’s out-of-state merit scholarships illustrate how directly scores translate to dollars. With a 3.5 GPA or higher:
· 1200-1250 SAT / 25-26 ACT → $6,000 per year
· 1260-1290 SAT / 27 ACT → $8,000 per year
· 1300-1320 SAT / 28 ACT → $10,000 per year
· 1330-1350 SAT / 29 ACT → $15,000 per year
· 1360-1410 SAT / 30-31 ACT → $24,000 per year
· 1420-1600 SAT / 32-36 ACT → $28,000 per year
· 1600 SAT / 36 ACT with 4.0 GPA → Full tuition plus housing and additional stipends
On Alabama’s grid, moving up just one score band, from a 1350 to a 1360 SAT score or a 29 to a 30 ACT score, is worth $9,000 per year, or $36,000 over four years.
Alabama is a well-known example because it publishes its criteria clearly, but it is far from alone. The University of Kentucky, the University of Tennessee, Auburn, the University of Oklahoma, and dozens of other large public universities use similar models. For families considering schools like this, the return on test prep can be measured directly in dollars per score point.
Merit Aid at Schools Without Published Grids
Most private colleges and many public universities don’t publish explicit score-to-scholarship tables. That doesn’t mean test scores aren’t factored into merit aid decisions. Data from colleges consistently shows that students with higher SAT and ACT scores tend to receive larger merit awards, even at schools that don’t publish a clear scoring grid.
Here’s why: merit aid is a recruitment tool. Schools use it to attract students they want, and students with higher test scores are more attractive to a broader range of institutions. That gives them more leverage and a better chance of receiving competitive offers.
This is especially true for students who are at the top of the academic profile for a given school. A student with a 1460 SAT score or 33 ACT score is a different kind of applicant than one with a 1350 SAT score or 29 ACT score, even at schools that don’t publish a grid.
National Merit: One Test, Major Financial Impact
The PSAT and National Merit program add another significant layer to the financial picture. The PSAT is perhaps the most undervalued test in high school. For most students, it is treated as a practice run for the SAT. For students who score in the top fraction of their state, it is an entry point to one of the most financially significant scholarship programs available.
National Merit Finalists become eligible for three types of awards: the $2,500 National Merit Scholarship; corporate-sponsored awards from companies that support employees’ children; and college-sponsored awards, which are often the most valuable. Many universities offer Finalists awards ranging from $2,000 to $4,000 per year, and some offer full tuition or even full rides.
The total financial value of National Merit Finalist status, across four years and counting both direct scholarships and college-sponsored merit packages, can easily reach $50,000 to $100,000 or more. And it all flows from a single PSAT score in October of junior year.
PRO TIP: Since the PSAT and SAT test the same content and skills, SAT prep directly improves PSAT performance. A student who begins prep in the spring or summer before junior year will arrive at the October PSAT better prepared for both the test itself and the National Merit qualification it enables.
What the Math Actually Looks Like
A student who spends a few months on serious, targeted SAT or ACT preparation, focused on the specific skills in which they’re losing points, might improve their SAT score by 80 to 150 points or their ACT score by 2 to 4 points. At many schools with published merit aid grids, that improvement could unlock $5,000 to $15,000 per year in scholarships. Over four years, that is $20,000 to $60,000 in reduced college costs.
Even at schools without published grids, a stronger score improves the odds of meaningful merit offers and, at the most selective schools, can be the difference between admission, deferral, or rejection.
The cost of test prep is real. So is the cost of college. For families thinking carefully about the financial side of the college decision, improving a student’s SAT or ACT score is one of the highest-return investments available in the junior and senior years of high school.
A free full-length practice test is a good starting point, since it shows where a student currently stands and which score thresholds are realistically within reach. The cost of a test prep course is a qualified tax-free withdrawal from a 529.
How Your Student Can Get Help
My College Corner notes that there are many free and paid resources available to students preparing for the SAT and ACT including Sharp, The College Board , Kaplan and The Princeton Review, among others. We do not endorse any program and are not compensated for mentioning them here.