RJ: You’ve written that “qualified students can attend expensive private colleges for even less than state schools.” How is that possible?
Reecy Aresty, national expert on how to maximize college financial aid: Private schools have fewer restrictions on the amount of aid they can award. In fact, many high profile and Ivy League colleges give a full ride to students whose families make less than $50,000, as reported on IRS Form 1040, Line 37, Adjusted Gross Income.
Please give us the “lay of the land” on how best to “talk the colleges’ language” to maximize their financial aid offers.
Three critical don’ts:
- Don’t allow a parent or relative to send an appeal letter or, worse yet, call a school; since students receive all correspondence, they must initiate it.
- Don’t ask for money; instead, ask for help to make college affordable.
- Don’t accept a school’s initial financial aid offer, unless the school has met the financial need 100%, with most aid being scholarships and grants. And don’t believe everything you read. Just because a school makes public that it meets 85% of financial need, don’t conclude that the school will not be willing to offer more. Almost all offers leave thousands of dollars in unmet need which can be appealed.
- If your award letter doesn’t include a Federal Work-Study Award (perhaps because you did not ask for one when you completed your FAFSA), then ask for one now, “so that I can take an active part in paying for my own education.” If an award is offered, ask that it be increased to $3,500 or even $4,000.
- If only a subsidized Stafford Loan is offered, ask for a $2,000 unsubsidized Stafford and a Perkins Loan (max $4,000) as well.
- If your family qualifies for a Pell Grant, ask for a Supplemental Educational Opportunity Grant (max $4,000), if one isn’t offered.
What is the best way to begin the appeals process?
The student must write a convincing letter to the author of the award letter or (if it can’t be determined who sent an email offer) to the Director of Financial Aid.
Follow this strategy:
- Determine the amount of unmet need. Use this formula: cost of attendance (tuition, fees, books, room and board, travel, etc.) minus expected family contribution (page 1 of Student Aid Report—answers to FAFSA) equals financial need.
- Always begin your letter by thanking the school for its generous offer.
- Never ask for everything in the first round, because if the school denies additional aid, you’ll have nothing to ask for in round two.
- If there has been a change in family circumstances—more family members, health issues, job loss, business failure, etc.—specifically ask for Professional Judgment. Most schools have forms for this or a Change of Circumstances form. Explain your case in detail, but limit the letter to one page and send it Priority Mail, signature confirmation. This way, the school is compelled to answer, and you know who signed for your letter.
- Be aware that many schools will call you (often on a Saturday night when you least expect it) after they receive an appeal letter. Find out the name of the caller, avoid identifying yourself, and ask the person to please leave a message for the student. It’s risky to speak with a college representative about financial aid. Too often the caller will simply say, “We received your letter, but there just isn’t any more aid available.” Now you’re totally on the defensive with no recourse!
- Consider multiple depositing. On May 1st, send your nonrefundable deposit to more than one school while appealing for more aid. The best negotiating position is when multiple offers are in hand, and you can pit the schools against each other to obtain an optimal financial package.
How does applying for Early Decision affect financial aid?
If the family does not plan to apply for financial aid, Early Decision (one school only) is highly recommended, because the student will have a decided advantage in the admissions process. However, if financial aid is an issue, the Early Decision option should be used with extreme caution, because the student is contractually obligated to attend the college that accepts him/her regardless of the financial aid offered.
Remember, too: To legally position your family to qualify for maximum financial aid, hire a financial aid professional with extensive experience. It’s just like hiring a tax professional who knows the tax laws. There are eight semesters, during which a school’s ability to award aid will change, so getting the best possible financial aid package you can is not a one-time shot.
—Reecy Aresty, author of How to Pay For College Without Going Broke; creator of The College Information Network; founder of College Assistance, Inc. in Boca Raton (www.paylessforcollege.com); host of the Pay Less for College radio show; and organizational speaker on “The 10 Commandments of College Funding”