If you are thinking about negotiating your university-bound child’s financial aid offers, you had better start working on your pitch.
So many parents are calling up colleges now since the money packages hit their mailboxes this week that the strategy has lost some of its bite. As a result, college financing experts are amending some of the standard recommendations.
Comparing financial aid offers
“Twenty years ago, only a small number did any appeal,” said San Diego financial aid consultant Deborah Fox. “But now people have heard they can negotiate and parents think that no matter what their children get, it should be more. There is a sense of entitlement.”
With the final tab for private college running more than $70,000 a year and public universities close to $35,000, a great deal of money is at stake.
Grants knock off an average of $6,000 per year off state university sticker prices and $20,000 at private colleges, according to a 2017 report by the College Board.
Incoming freshmen have until May 1 to accept or reject a college’s offer. If you want to increase your share of aid, here is how to hone your message:
Know where you stand
To better your case, first review the school's website and other resources you can find on how much the college typically provides in aid based on your family's financial needs and on a student's merit. Also know the "expected family contribution" from your federal Free Application for Federal Student Aid (FAFSA) form.
Note that pressing for need-based assistance can be more valuable to your family than awards based on your kid’s achievements. Merit aid may be for only the first year or it could be dependent upon maintaining a high GPA.
On the other hand, if your finances do not improve but college costs rise, you may get more aid down the road.
Document your case
The tax return and FAFSA you sent colleges back in October may be out of date by now. If you have had a financial change resulting from a health issue or a job loss, you could present a change of circumstance.
Typically, you must document financial issues with paperwork and submit it in a formal process. For example, if you have lost your job you would submit a letter or termination. For medical issues, you might submit medical bills and perhaps a diagnosis to show an illness will continue and demand heavy spending or missed employment during the next school year.
Mistakes also happen, but can be corrected.
Kalman Chany, financial aid consultant and author of “Paying for College Without Going Broke,” helped a divorced woman show she had originally filled out the FAFSA incorrectly and had failed to show she was entirely responsible for living expenses.
Fox also helped a woman whose daughter was offered no aid at her first choice, but much more aid at others. Turns out, the first school simply forget to tell her about a $20,000-a-year award.
Work the yield
Colleges are businesses driven by the need to fill seats and bolster their status among competing colleges in rankings such as from U.S. News and World Report, said Chany.
Never too late to try for aid
If your first-choice school is one that needs to boost the ratio of accepted students who actually attend, it might be swayed to boost aid with a promise to attend, said financial aid expert Mark Kantrowitz.
Some college guides report this “acceptance rate” statistic outright, or it is blended into the methodology of college rankings.
The key to this line of negotiation: have an offer from an equally prestigious college, noted Kantrowitz.
Play hard to get
Parents who act too eager may convince a college that their child will attend regardless of money. So while you are looking over the aid packages, take a pause.
“Wait a week after the financial aid offer arrives before calling,” Chany said.
When you get started with the financial aid office, keep it short and ask about the procedure to appeal – a formal process in which you write a short letter about the financial issue and provide documentation.
The number one tip: avoid a sales pitch about your child.
“They want to vomit when they hear your child will make a great contribution,” Chany said.
|For more news you can use to help guide your financial life, visit our Insights page.|