Appealing the Financial Aid Award Letter
By Joe Messinger, CFP®
February 19, 2019
UPDATE February 23, 2019 Last week, we took a look at the financial aid award letter received by seniors each year in mid-February. Families need to understand the fine print of the award letter in order to make an informed decision about the best college and how much it will cost them for all four years. This week, let’s consider something else–can you appeal that letter from the college and ask for a better price? Sometimes this thought is startling for families. Can you do that?! Let’s revisit this important topic.
I’m disgusted. Every year we help families review their financial aid award letters to compare the actual costs, and every year I am disgusted by what colleges send to their prospective students…not the numbers themselves necessarily, but how they present it.
The letters can be downright misleading. They make your financial burden seem smaller than it actually is. Often, they are worded to include loans in the funding to lower the bottom line number. Loans need to be included in your net costs and not slipped in by colleges as if they are on par with grants and scholarships.
(For a refresher on decoding financial aid award letters, check out our blog on the topic.)
Now, I’ve got that rant off my chest. Let’s say you’ve figured out what you’ll have to pay. Is there wiggle room for negotiating? Can you go back to a college and ask for more money?
The simple answer is “yes.” At Capstone, we help client families with this all the time.
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. What to do? We helped the family get an additional $5,500 per yearbringing their award to a total of $27,500 over the four-year term because of our work appealing the award letter.
What are some things to keep in mind?
Sooner rather than later is important. Student decisions need to be made by May 1st. Communication needs to happen 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!) And highly selective privates have no reason to give you more money. They have a large applicant pool who would gladly pay full freight. In addition, many of them do not have merit scholarships and only award aid based on need.
However, what I like to call the middle-tier private colleges are trying to win the best students they can and about 2/3 of them will try to help work with you if you plead your case.
A key is to have an award offered by a similar type of school ideally in the same region that your number one choice can try to match.
Don’t approach it like a car shopping bargaining though. 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. Instead of “negotiating,” think of it as asking them to “reconsider.” 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.
What we are talking about in this post is competitive appeals. If on the other hand 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.
By the way, talking with the admissions office can be more helpful than talking to the financial aid office. They will go to bat for you if they really want you. The financial aid office may only deal with need-based aid and not be able to help with merit scholarship money. In general if they have the funds, colleges may be able to add a few thousand more to their original offer.
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.
At this time of year, we are working with our families deciphering the financial aid award letters and aiding in the appeals process. The possibility of an appeal is something to keep in mind as you go through this process yourself.