scholarship Archives - Granite Test Prep

How Much is 1-Point on the ACT Worth in Dollars?

Grantly

October 18, 2019

As the founder of Granite Test Prep, a Nashville, TN based education center, I spend a lot of time working with students and families on increasing ACT scores, finding colleges based on these ACT scores, and finally using these ACT scores to pursue merit scholarships and financial aid to make college a little more affordable!

I recently had a family ask me a great question: “how much is one point on the ACT worth in dollars?”

I recently had a family ask me a great question: “how much is one point on the ACT worth in dollars?” At the time, I didn’t have a direct answer for them; however, I was curious and I wanted to find a more exciting answer than “it depends on what you and your family values etc…”

I was curious and I wanted to find a more exciting answer than “it depends on what you and your family values etc…”

Finding an answer to the value of a single ACT point began with seeing what other experts in the field had recorded. College admissions blog “The College Solution” claims that a one point increase in ACT score (given certain situations) could equal as much as $24,000 for students applying to The University of Indiana. While this figure is certainly interesting, at Granite we wanted to know more! We didn’t want to know simply what a 27 to a 28 meant at Indiana, or what a 35 to a 36 meant at Alabama, we wanted to know ON AVERAGE how much a one point increase starting at ANY SCORE meant for ANY SCHOOL.

To calculate the average dollar amount value of a single point increase on the ACT, we went out and built a list of ALL the ACT scholarships we could find, their dollar values, and their ACT cutoff thresholds and we let the statistics magic begin

Without anyone on the internet giving an absolute value for “the value of a single point on the ACT”, I went about using some tricks I learned in my economics degree and began building a data set! Our set began with the college readiness blog “Prep Scholar”. Their fascinating article “Guaranteed Scholarships Based on SAT/ACT Scores” outlined many of the ACT-based scholarships available to college applicants. Still we needed more data, so we went school by school and studied their scholarship and financial aid pages. To calculate the average dollar amount value of a single point increase on the ACT, we went out and built a list of ALL the ACT scholarships we could find, their dollar values, and their ACT cutoff thresholds and we let the statistics magic begin (see the bottom of the article for a description of the “statistics magic”).

Ultimately we calculated that a single point increase on the ACT was worth $8,451 over four years.

Ultimately we calculated that a single point increase on the ACT was worth $8,451 over four years. That means that for ANY score and ANY school we would expect and AVERAGE increase in scholarship of $8,451 for every single point you get on the ACT. Below is a graph of some of the schools we included in our calculations. Along the bottom of the graph are ACT scores, and for every ACT score you can see how many dollars that score would be worth after 4-years.

It should be acknowledged that not all schools give money for ACT scores. Ivy League schools for example (and other “highly selective institutions” like Stanford or MIT), don’t offer any merit scholarships for academics or athletics. These schools prefer to give all of their scholarship money in the form of financial-aid, a package of grants, student work options, and sometimes loans that make these (otherwise very expensive schools) often very affordable. Since these schools typically have acceptance rates in the single digits, the value of an additional ACT point is in your percent chance of being accepted. Look for our next article which will be “Acceptance Rates and the Value of the Marginal ACT Point”.

These schools prefer to give all of their scholarship money in the form of financial-aid, a package of grants, student work options, and sometimes loans that make these (otherwise very expensive schools) often very affordable.

If you are interested in how much more money you could get in scholarships given a certain school and your specific profile please feel free to contact us at: contact@granitetestprep.com. We spend all day helping students and families like you figure out how to raise ACT scores and then how to use these ACT scores most efficiently in the college application process.

Stats Corner:

For our friends who love statistics, want to learn about statistics, or are simply wary of random figures posted in blogs, here are the calculations and methods we used to get our numbers and graphs! If you DON’T like statistics don’t worry! This section just explains how we got to the number of $8,451.

Our data set was an aggregated list of merit scholarship amounts and their corresponding ACT threshold. Merit scholarships were only included if they depended solely on ACT score (so as to reduce risk of bias from unobserved variables like “student GPA” or “student achievement”.)
Our equation was modeled as follows: Dollars= ß1(Score) + C
Regression Results are shown below:
R-squared: 0.634
ß1 T-Stat: 9.174 (p>0.000)