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It’s rare that we meet parents who know this important fact: the first offer a financial aid department makes your student isn’t necessarily their final offer; you can appeal for more money!

Often times you can appeal your first aid package offer, either as a reflection of errors made during the submission process (we’ll discuss common mistakes) or not knowing how to appeal for more aid (how do I actually make my appeal?). It’s not enough to simply be correct, you must understand what language aid officers respond to!

What we will cover today:

  1. Commonalities of those students who are successful in their financial aid appeals.
  2. The common types of mistakes that lend themselves to appeals.
  3. Specific examples of these mistakes.
  4. How to communicate with the financial aid department, so you don’t come off as a bossy “Karen” and actually get the opportunity to be heard and considered for a better offer. Many people try unsuccessfully simply because they approach the problem incorrectly!

Commonalities of Students Who Are Successful With Their Appeals

It’s important to understand how common financial aid appeals, or “adjustments” as they’re known in the business, are successfully received by families. Only about 1% of students nationwide receive adjustments to their financial aid packages. Students at private non-profit colleges and higher-cost institutions are typically more likely to succeed in their adjustment.

Let’s take a closer look at the commonalities of that 1% of students who are successful in their appeal:

  • There is a special financial circumstance or change in the family’s ability to pay for college in the last two years.
  • There is a large disparity between the price estimated by the college’s net price calculator and the net price as a reflection of the financial aid package received.
  • There is a striking difference in net price between institutions to which a student has received aid packages (i.e. can we leverage one aid package towards another similarly priced school? Yes!).

Referring to the first point, here are some of the special circumstances that would be considered for review by financial aid administrators:

  • Unusually high childcare or dependent care costs
  • Recent unemployment of a family member or an independent student
  • Change in housing status that results in an individual being homeless or at risk for being homeless
  • Changes in a family’s income of assets due to job loss, furlough, or salary reduction
  • Change in family income due to death, disability, or illness of a wage-earner

It’s important to understand the lingo financial aid departments use for the process of appealing a financial aid package. The entire process of making adjustments is typically referred to as ‘professional review or judgment.’ The review process can determine two types of changes: adjustments and overrides. These professional judgment decisions are for just one year at a time and must be reviewed annually.

Common Mistakes

There are four main categories of mistakes that people make people make when filling out the FAFSA:

1. Correction: Information entered on FAFSA at the time of submission was incorrect.

    • Examples:
      • Failing to list an in-state public college first on your FAFSA. If you do not list an in-state public college first, you may not be considered for state grants.
      • Entering money in a qualified retirement account such as 401(k), 403(b), IRA, Roth IRA, Roth 401(k), SEP, SIMPLE, etc. Qualified retirement plans are NOT reportable on FAFSA.
      • Reporting the net worth of the family home as an investment. The family’s principal balance in their primary residence is ignored.
      • Reporting assets held in a 529 college savings plan as the student’s when the plan is owned by their parent or relative.
      • Incorrectly reporting the value of stock options. You only need to report the value of stock options that are vested.
      • Reporting the wrong marital status. Marital status is reported as of the date FAFSA is submitted, not prior-prior year.
      • Failing to count children in household size even if they don’t live at home; they are counted regardless of where they live if they receive at least half of their support from the family.

2. Update: Information can sometimes be updated by college financial aid administrators to reflect changes that occurred after FAFSA was completed.

  • Examples:
    • Changes to student’s dependency status, household size, or number of students enrolled in college.
    • Failing to count unborn children in household size if the child will be born during the academic year.

3. Adjustment: Special circumstances arise that will impact a family’s finances and ability to meet the cost of attendance. If you submit an adjustment form and meet the requirements, the school’s financial aid office will re-evaluate your aid package. You can find these forms on your school’s website (usually under “financial aid forms”).

4.  Dependency Override: In very uncommon circumstances, a college’s financial aid administration can change a student’s dependency status from dependent to independent (but not vice-versa).

But what is the most serious error you can commit? FAILING TO FILE THE FAFSA. You cannot and will not be considered for money if you don’t apply for aid. There is no age, income, or asset limit cutoff on aid eligibility.

Requesting a Professional Judgement

Next, we’ll highlight what you need to know when requesting a professional review for adjustments to your financial aid package.

It is important to understand that college financial aid administrators have the authority to make adjustments to the cost of attendance or the values of the FAFSA elements used to calculate the expected family contribution – they CANNOT change the financial aid formula or change your expected family contribution directly.

Making Your Case: The Appeal Letter

So, you’ve identified that you may qualify for an aid appeal; but what now?

First, you need to reach out to the school’s financial aid office or peruse their website to determine its appeal process.

When you craft your letter, make sure to be very clear about the specific circumstances that have changed and/or the challenges you face in paying your current net cost. Make sure to gather all supporting documentation that is requested and any documentation that you think could help your case. For example, you can attach an award letter from another school that has offered more money but also emphasize that you are committed to the original college whose aid package you are appealing.

Some experts also say it helps your case to give a specific rounded number if you are only looking for a couple thousand more dollars in aid.

Making Your Case: The Negotiation

If your appeal is approved and you get to speak to a college financial aid administrator, don’t use the word negotiation. Aim for less confrontational language, like chat or discuss my child’s aid award. Also, keep these things in mind:

  • Prepare Beforehand: knowledge is power, especially through this process. The more you know, the higher the likelihood of putting yourself in a better position through the professional review request process. Play with the ‘what-ifs’ on the college’s net price calculator. Shop around: what colleges compete with your college for students? Be realistic about your student’s true value to that institution (everyone thinks their child is perfect!). Remember that apart from special circumstances, very few parts of the appeal process are subjective; rather, they are largely formulaic.
  • Understand Rule #1 in Negotiating: Don’t Make the First Move! Like any negotiation, if you offer the first number, you may have sold yourself short if the aid department was considering an even lower counteroffer. Realize that in making a counteroffer the aid department is already aware of your ability to pay for attendance based on the information you’ve previously shared. Therefore, you should come to the discussion with justification and appropriate documentation for an increased aid offer.
  • Consider Game Theory: Try and look at the situation from the college’s perspective with regard to their policies and flexibility to make changes. A college may be more willing to make concessions that are of minimal cost to them; for example, substituting student employment for student loans. If you are flexible, you’ll most likely have a happier outcome.
  • Be Nice! The negotiator is not your enemy. You are not here to make demands. Don’t be in a hurry; time pressure is pressure nonetheless and can close off opportunities quickly. Don’t be quick to speak, and make sure when you speak that you’re using pleasant, simple statements. Instead of saying ‘that’s not enough’ or ‘that’s unacceptable’ try phrases like ‘that is not ideal,’ ‘that will present a challenge for us,’ or ‘that still leaves us in a tough position.’
  • Don’t Bluff: What we mean is this: be ready to walk away. Most families at this point in the process have all their eggs in one basket. Their student is 100% going to said college no matter what. Many parents use the threat of sending their child to another school, but rarely follow through with it. What if your student was taught from an early age to have dream schools (plural)? It’s better to walk away and send your child to a less expensive college than borrowing money your child potentially cannot afford to repay.

 

How COVID-19 Has Affected Financial Aid

We realize that the world has significantly changed as a result of COVID-19. How might this pandemic unknowingly benefit you? How might Covid-19 affect your aid offer?

As a result of the pandemic, many of the listed ‘special circumstances’ mentioned by the Higher Education Act of 1965 may be triggered as a reflection of current socio-economic trends. In other words, it is more likely that your appeal will be successful.

As discussed above, here are a few scenarios that qualify as special circumstances:

  • Unusually high childcare or dependent care costs
  • Recent unemployment of a family member or an independent student
  • Change in housing status that results in an individual being homeless or at risk for being homeless
  • Changes in a family’s income of assets due to job loss, furlough, or salary reduction
  • Change in family income due to death, disability, or illness of a wage-earner

We hope that this guide will help you and your child fulfill his or her educational dreams. Remember, the appeal process is not standardized, and many schools will have a different approach or packaging philosophy, as well as different financial aid budgets. Although the parameters may be different, however, the nature of the process is mechanical. You just have to take the time and get it done!


For many families, the high cost of higher education is a daunting proposition. The College Funding Coach is here to help. To learn more about paying for college while saving for retirement, register for one of our free workshops/webinars or speak with an advisor to get started on your college funding journey.


Author:

Evan Haire

 

 

 

 

 

 

 

 

 

Related Reading:

How to Qualify for More Aid During COVID-19

8 Tips for Writing a Succesful Financial Aid Appeal Letter

Don’t Be Fooled By Your Financial Award Letters

What Every College Financial Aid Officer Wants You to Know

The FAFSA Verification Process and the Financial Award Letter

A Peek Behind the Curtain of College Pricing

The EFC Mumbo Jumbo

 

 


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