3 Legit Reasons for ‘Negotiating’ Your Aid Package

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Talk to a financial aid administrator or admissions consultant, and the advice is the same: Never “negotiate” your college award letter. For them, the word demeans the process.

“However, any student can try to ‘appeal’ their financial aid package,” veteran college financial planner Deborah Fox told Student Loan Hero.

Fox said such appeals have skyrocketed over her 20-plus years advising students and their parents.

“But just because they can doesn’t mean they should,” she cautioned. “With the larger volume, it is creating more competition and therefore harder to get a good outcome in general.”

So, yes, call it “bargaining,” “begging” or something else, but you can ask for a financial aid adjustment. Here are three scenarios when your chances are best:

1. Your family is facing financial hardship

If your circumstances change between the filing your FAFSA and the time you receive your aid package, you could be eligible to appeal. It’s called a professional judgment and, in the words of the National Association of Student Financial Aid Administrators (NASFAA), it’s not a “negotiation” per se.

“Rather, it is a basis for change to the Expected Family Contribution (EFC) calculation based on documented facts that are present in the current circumstances of the student,” NASFAA vice president Dana Kelly told Student Loan Hero.

Such special circumstances include:

  • Divorce
  • Parent passes away
  • Breadwinner loses their job
  • Family suffers through a natural disaster
  • Household’s income decreases
  • Household’s emergency expenses increase (due to medical care, for example)

Thankfully, there may not even be a need to update your Free Application for Federal Student Aid (FAFSA). Thanks to the Higher Education Act of 1965, the school’s financial aid office can independently recalculate the EFC that your FAFSA previously pumped out.

Just be prepared to hand over evidence — anything from an employer letter to copies of medical bills — in order to make your case.

2. Your academic record has improved

If your family’s finances have suffered in the time since filing your FAFSA, you’d be seeking another dose of need-based aid. But if your academic record has improved, it’s merit-based aid that you’d be after.

Temper your expectations, however. You’ll either need to be a tip-top student or have made a drastic improvement in performance to merit additional funding.

Fox, the founder of Fox College Funding, advised reviewing resources like the College Board to check on schools’ GPA and test-score thresholds. You can also learn about colleges’ average financial aid award online or by contacting their admissions offices.

If you were offered a $15,000 merit scholarship from a school that doles out an average award of $10,000, for instance, Fox said an appeal is unlikely to be successful and could even reflect poorly on the student.

“However, if the student was offered a $5,000 award and his or her profile appeared to match or exceed the college’s average, an appeal would be appropriate,” she said.

To convince a financial aid administrator, you might send along your newest grade transcript or a recommendation letter referencing your newly-won award. Fox recommended that students (not parents) write the appeal letter, as it shows they’re taking ownership of the process.

“The tone of the letter should be respectful and appreciative of the money that was already offered,” Fox added.

Also be aware that some schools, such as Boston College, offer only need-based aid. As a result, your academic achievements won’t sway their financial aid officers.

3. You have a better offer from another school

Perhaps your final semesters of high school were more of the same, but one college or university sees more promise in you than another. Talking to the financial aid office about other pending college aid offers could entice them to sweeten the deal.

On the other hand, Lynn University in Florida told Student Loan Hero that, at least for its part, it won’t budge from the initial offer.

“We believe in providing the student with the optimum financial aid award package from the outset, rather than having a student and family labor through a negotiation process that may prove fruitful for some and not for others,” said Morgan O’Sullivan, Lynn’s director of student financial services communications.

Sullivan added that he wasn’t aware of schools that would match a competing school’s package. Negotiation isn’t a topic that financial aid officers like to discuss, and many colleges and universities even make a point of saying they won’t participate in deal-making unless a professional judgment (see above) is in order.

As Kelly of NASFAA said emphatically: “There is no negotiation policy in student financial aid.”

When negotiating your financial aid package isn’t enough

According to a survey by private student loan company College Ave, 26% of college students reported asking their financial aid administrator for more aid, and 37% said they wished they had requested it.

On top of that, college aid offices keep 15% to 20% of their budget in reserve for awarding extra aid (even if the majority is meant for professional judgments) — and often only about half of it gets deployed. That’s according to Charlie Javice, founder of personal finance website Frank, which writes appeal letters on behalf of its college-attending clients.

Of course, even in one of the three scenarios outlined above, calling for more aid doesn’t mean you’ll receive it.

As you attempt to improve your aid package and compare college awards, consider O’Sullivan’s tips:

  • Gauge the annual — and total — aid: Some schools are known to “frontload” offers with grants and scholarships for your freshman year that won’t renew for your remaining years of college. Project your out-of-pocket costs for year two through year four at a variety of schools before deciding.
  • Account for secondary costs: One school might provide more financial aid but force you to pay other expenses out of pocket. A school that’s a further drive from home, for example, might cost you more gas money, eating into the actual value of that school’s aid package.
  • Inquire about indirect aid: Your financial aid administrator might not be able to offer more school-based funds, but they can still be a useful resource. Ask them about grants from your state and scholarships from private donors, as well as your access to federal and private student loans.

Finally, ask yourself how far your money would go at each school on your college list. One might offer more financial aid (perhaps in the form of a merit-based scholarship) but less academic support (maybe with a worse student-to-teach ratio). It’s all part of the cost-benefit analysis.

“It’s important for students to select a school that fits them academically and socially,” O’Sullivan said. “While finances are an important factor, you want to be successful in your degree and create a meaningful college experience.”

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