6 Step System For Negotiating A Better College Financial Aid Package

In this installment, we’re going to discuss an extremely important topic – one that will significantly impact both your college-bound children and your bank account. We’re talking about how to negotiate the best deal for a 4 year college education. Most parents take this subject lightly. They figure whatever the schools end up offering them is the best that they will get.Not so.

Let me ask you a question: When you went to purchase or lease your car – did you accept the first offer they made you, or did you look at their price as a “starting point” for negotiation? What about when you bought your home? Did you purchase it at list price, or did you muster up all of your negotiating skills to try to get the seller to come down in price? So why should getting college financial aid be any different?

• Even the cheapest state schools today will cost you over $15,000 between tuition, fees, books, room and board, and miscellaneous expenses.

• A private university can easily cost you $40,000-$50,000 a year and up. Now multiply those amounts by 4.

• A college education for your child (or children) is one of the single biggest investments you will ever make in your entire lifetime.

• Doesn’t it make sense to treat it like any other major purchase, and do your best to negotiate the best possible college financial aid package for your child?

Negotiation Strategies to Increase College Financial Aid

#1: Get Good Grades & Good SAT/ACT Test Scores:

Well, for starters, your children should be doing their best to get good grades in school.  In addition, they should be taking some type of review course to get the best score possible on their SAT test and ACT test (it’s a little late for seniors, but not for juniors).

#2: Narrow Down College Choices:

If at all possible, you should start narrowing down your school choices to colleges and universities where your child lies in the top 25% of the applicant pool – this will significantly increase your chances of getting a good college financial aid package.

#3: Find Colleges with Good Financial Aid:

You must start doing thorough research on which schools have the best history (and policies) of giving generous financial aid packages.  You want your child to apply to schools that will meet most or all of your family’s financial need.  It is also important to pick schools that have a history of giving more FREE money and fewer loans.

Hint: Pick schools that have big endowments.  Private schools tend to have far more money available than state schools do.  It obviously depends on your student’s academics and your family’s finances, but we typically recommend picking a couple of state schools as “safety” schools and the rest should be well-endowed private schools.  For many families, these ‘expensive’ private schools will end up costing you far less money than the ‘cheaper’ state schools.

#4: Apply to at least 4 Colleges or Universities:

You must apply to at least 4-6 colleges or universities to ensure that your child gets a good offer from 1 or 2 of them.  If all the schools are of the same academic caliber (and some give you a good financial aid package while others give you poor packages), it will allow you to pit one college against the other when negotiating for a better financial aid package.  Schools of equal caliber will often times compete for the same student by offering aggressive college financial aid packages.  Be sure to take advantage of this.

#5: Determine Expected Family Contribution (EFC) & Cost of Attendance:

You must know your numbers in advance.

For example, do you know what your “Expected Family Contribution” is?

It is the minimum amount that the government expects you to pay towards ANY school.

Schools determine what they are going to offer you by subtracting your Expected Family Contribution from their “Cost of Attendance.”

This provides them with your family’s “Financial Need.”

Frequently, schools will offer parents far less than what they were eligible to receive.  Most families don’t dispute this since they have no idea of what they should have been offered in the first place. Don’t let this happen to you.

That’s why you need to know your numbers in advance.

Find out what your Expected Family Contribution is (and make sure it’s the lowest it possibly can be for your specific situation).  Then, find out what the Cost of Attendance (COA) is at each school. Make sure the schools include all costs such as tuition, fees, books, room and board, living expenses, transportation, and miscellaneous expenses.

Once you get these two numbers, calculate your Financial Need at each school, and make sure their financial aid package meets most or all of your need.  Remember, some schools will meet all of your need… and others won’t.  Some will give you all FREE money… and others will give you mostly loans.  Again – that’s why it pays to know your numbers AND the school’s numbers far in advance.

#6: Contact the College Directly If Your Financial Aid Package Is Insufficient:

If you’re “under awarded,” call the college, or write a financial aid appeal letter to the school for reasoning.  Try to create a subtle competition with other schools your child applied to.  Make sure you’re arguing your case in a way that they’ll want to listen to.  Many parents ask for more money. But it’s the ones who truly navigate the appeals process who properly get it.

If you follow these steps, you’ll increase your chances of getting a great package from, at least, 2 or 3 of the schools your child applies to.

To your college funding success,

Scott Weingold

(Scott Weingold is co-founder and publisher of the free online newsletter, College Made Simple, and also co-authored the book, “The Real Secret To Paying For College: The Insider’s Guide To Sending Your Child To College – Without Spending Your Life’s Savings.”)

 

Related Links:

Fox Business on College Financial Aid: Negotiating the Best Deal

FinAid on Negotiation and Professional Judgement

Smart Money on 10 Things Financial Aid Offices Won’t Say

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