Here’s a little something that many of our newer readers are surprised (in a good way) to learn. Unlike typical admissions decisions, the financial aid offers that accompany your admissions letters are far less final. With financial aid, you have more room to maneuver, to appeal, even (gasp!) to negotiate a stingy offer than you do an unfavorable admissions decision. Notice the language difference: admissions decisions, and financial aid offers.

The latter can be countered, as in you can make a counter-offer, request to ‘be reconsidered’, or appeal for more money. And here’s the best part. Quite often, when done so correctly – you’ll get more. Sometimes quite a lot more.

So, should you be appealing your financial aid offer?
Well, that depends (which I know is annoying, but it’s also true). Actually there are many good reasons to appeal a financial aid offer, but first and foremost, you have to determine if the offer you have received is fair (as in, is it consistent with both the school’s stated financial aid policy and it’s historical practice).

The first thing I do when presented with an award letter is calculate how much the student deserves to receive. This way I have a benchmark to compare the award with, instead of merely crying “it’s not fair!” 

How do you calculate a “fair” award?  By applying the financial aid formulas and researching what percentage of financial need the college meets.

The financial aid formula is:
Cost of Attendance – Estimated Family Contribution = Need.

Cost Of Attendance means how much it takes to send your child to school for one year – tuition, fees, room and board, books and supplies, travel expenses, insurance, and so forth.

Estimated Family Contribution is an amount that the government determines that you can afford to pay each year.  It’s derived from filling out the FAFSA and in some cases, the CSS Profile. 

(Most families are unhappy with their EFC because government formulas often have little relevance to a specific family’s financial circumstances.  For example, a family of 4 with an adjusted gross income of $150,000 and one student in college will have an EFC of about $30,000, or approximately 1/5 of their income.  There are ways to reduce your EFC, but that takes advanced planning of a year or two.  So the best time to start is when your student is in 10th grade or earlier).

So if Cost of Attendance is $80,000, EFC is $30,000 you will show financial need of $50,000. (COA-EFC = Need).

The next step is to research how much need the college says they’ll meet and how much they have historically met.  All schools discount to some extent. Perhaps your child’s dream school is a generous one, and meets 90% – in this case $45,000, leaving only $5,000 unmet.

I realize your eyes could be glazing over right now, so I’ll stop with the calculations.

But if you’re still following, we just figured out that a fair award is $45,000. If you receive that amount or more, I would not bother appealing, but it depends on the allocation (grants vs. loans and work study). If you receive less than $45,000, I would question the award and consider an appeal.

Now, all of the above assumes that the financial aid applications the family submitted did not contain any errors that may have inadvertently inflated the family’s expected contribution. Many applications do contain such errors, and these can be costly. But they can also be addressed, explained, and/or appealed.

Perhaps, for example, upon review, we realize that you have accidentally inflated the value of your small business by using an IRS standard as opposed to the Dept. of Ed. formulas. Or perhaps, you included the value of the 529 your parents’ purchased for their grandchild or worse, you misclassified this asset as a student asset (note: student asset are more heavily penalized in both the federal and institutional financial aid methodologies). In those cases, we submit corrected applications along with an explanation for the changes. I’ve seen cases were retirement accounts or home values are included in assets, and this, too, can be unnecessarily costly.

We’ll also appeal on behalf of families who may have experienced a change in life or financial circumstances that is not reflected on the financial aid applications (note that the financial aid applications are using data from January of your high school child’s sophomore year to December of their junior year — and things do change). We’ll request reconsideration for an award if the family has experienced a job change, a medical issue that results in high expense or time away from work (lost wages), a natural disaster, or some other event that has a significant financial impact.

The best way to appeal is to write a letter to the financial aid office and copy the admissions person who signed your child’s acceptance letter. Admissions has a vested interest in having your child say ‘yes,’ so keep them in the loop. Some schools have institutionalized the appeal process, with websites explaining their process and specific forms to complete. You’ll want to follow their rules and procedures, or you’re simply wasting your time.

Make sure that you are both thankful and positive in the letter – tell them how much you appreciate their original offer (even as you are about to ask for more!).  Describe how eager your child is to attend this prestigious school.  Then mention that, as it stands, what they have offered is not enough for your son or daughter to be able to attend. If you can demonstrate that you were under-awarded, do so here.

If you have background about your finances or other relevant information that did not show up on the initial financial aid forms, this is the time to explain it.  And don’t be afraid to use emotion to paint a vivid picture for the financial aid officer, who, for the most part, tends to be an actual human being with feelings! 

If you were laid off, describe not only the financial impact but also the pain and suffering that you experienced. If you’re self-employed and your business suffered a downturn, this letter is the place to demonstrate it and make the reader feel that they’re right there with you.

Before you ‘appeal’, you should probably wait until you have received all of your ‘offers’. That way, if you received a more compelling award from a competing university, you can mention it!  Sometimes (not always), you can use it to play one school off the other, particularly if you can honestly say something along the lines of “Your fine college is Charlie’s first choice, but he received $12,000 more in grants from Faber College. If you can come close to matching Faber, he’s coming to your school!”

One cautionary note – don’t bluff!  You’d better be able to prove that you were offered a better award package elsewhere, because you may be requested to produce it.  And finally, make sure you call it an “appeal.”  Never use the word “negotiate” – the theory (still unproven) is that financial aid officers think that word is too transactional so to be safe, stick to the more academic ‘appeal’.

If you’re the parent of a 12th grader who is currently reviewing your financial aid offers and would like more in depth information, check out this podcast Carla and I recorded a couple of years ago. If you still have questions, you can send me an email and perhaps we can improve your offer.

As always, thank you for following our content and allowing us to help support students and their success!

Best,
Peter