5 things to think about – By Dave Coen
This time of year, we look through a lot of financial aid award letters. Part of what we need to understand is the fine print of the award letters in order to make an informed decision about the best college and how much it will cost for all four years.
The letters can be downright misleading.
I am really surprised that there has not been a requirement to make colleges present the information in a way that is not misleading and is easy for everyone to understand the exact consequences of their choices.
Colleges in many cases make the financial burden seem smaller than it actually is. Often, the award letters are worded to include loans in the funding to lower the bottom line number. Loans should be included in the total net costs and not slipped in by colleges as if they are on par with grants and scholarships.
For the purpose of this communication though, let’s consider something else. Can you appeal that “award” letter from the college and ask for a better out-of-pocket cost? Sometimes this thought is a startling concept for families.
Can you go back to a college and ask for more money?
The simple answer is “yes,” if you have planned for this from the start.
Recently, a student had two comparable best-fit college offers. One offered more merit money than the other, but the “other” was their first-choice dream school. We often help families get additional financial aid if they have been through the planning process with us. Recently we helped the family get an additional $5,000 per year bringing their award to a total of $20,000 over the four-year term because of our work appealing the award letter. That alone was worth anything they could have paid for planning, in addition to all the other benefits the student and family received.
What are some things to keep in mind?
Sooner rather than later is important. Student decisions need to be made by May 1st although some colleges may have flexible decision schedules due to Covid-19. Even though the FAFSA deadline has been extended, we suggest that parents get this all done and communicate needs as soon as possible.
What do you have to lose?
Nothing. A college will not rescind an offer letter simply because you asked for more money. Getting additional dollars as a result of an appeal is not a sure thing. It depends on the school and their applicants that year.
In general, public schools have less money to play with so their hands are pretty much tied. (You can still ask though!) Don’t be put off by someone telling you “We don’t negotiate” We are not negotiating, we are requesting a review.
There are many colleges that will reconsider based on circumstances and many middle-tier private colleges that are trying to win the best students they can and could try to work with you if you plead your case.
One key to a competitive appeal is to have an award offered by a similar type of school ideally in the same region that your number one choice so that you can try to negotiate a match.
Don’t approach it like a car shopping bargaining.
Admissions counselors and financial aid administrators have a process they follow. Your discussion needs to be centered on your desire to attend their school and your concern about excessive student loans. You are appealing for additional aid and seeking “professional judgment” to consider you for additional dollars. Be sure to be thankful for what they’ve already offered.
If you have specific financial burdens or circumstances, you absolutely need to help the financial aid office understand your situation. Common things that fall in this category include loss of a job, divorce, death of a parent, excessive medical debts, etc. These are big financial burdens, but they are not asked about on the FAFSA. Schools really do want to help you get an appropriate award amount.
Sometimes, talking with the admissions office can be very helpful in pointing you in the direction of merit scholarship money. They will go to bat for you if they really want you. The financial aid office may only deal with need-based aid, and your student needs to communicate with them directly too. Remember that this is a job for the student to communicate, not the parents. In general, if they have the funds, colleges may be able to add a few thousand more to their original offer.
This is something that is part of the services we provide. There are also great life lessons for the student to be learned here as they need to be actively involved in the process.
Final tip: don’t pay the deposit until the final cost has been agreed to.
Colleges don’t have too much motivation to work with you if they already have your money.
About Dave
Dave Coen is a Retirement Income Certified Professional (RICP®) and Financial Advisor with SageView Advisory, and CEO of College Planning America. Along with his retirement financial industry experience, he is a College Planning Specialist. He works closely with individuals and families to provide comprehensive financial planning that addresses all elements of their financial picture. Learn more by connecting with Dave on LinkedIn. Please feel free to contact me if you would like to discuss how we can help you with your family’s plan either in person, over the phone, or on Zoom
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