How to Negotiate Your Financial Aid Package
The good news is you’ve gotten into your dream school. The bad news is that their financial aid package is less than generous. But you’re not necessarily stuck with it. While you’re unlikely to get a reduction on your federal student aid unless your financial situation has changed, the school may have a formal process for re-evaluation—and may be able to help you find aid from other endowments. Here’s how to go about negotiating your financial aid package.
Start with changed circumstances
Most applications—including applications for federal financial aid—rely on financial statements from the previous year. A lot can happen since then. You or a parent could have lost a job or a house, or there could have been an illness or death in the family. Large changes like these can dramatically affect your finances—and merit a new look at your financial aid.
Show your offers from other schools
Did another school offer a dramatically lower financial aid package? If so, show it to this school. Explain that they are your first choice, but that for financial reasons you may have to choose a school that has made itself more affordable. Some schools may be able to change your financial aid package
if you show this information, while others won’t.
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At most colleges, the financial aid administrator has the final decision—and you can’t appeal to the president of the college or the US Department of Education.
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If you are applying for an increase in financial aid due to special circumstances, you’ll need to deliver documentation. The most effective proof comes from a neutral third party, such as a doctor, financial advisor, or another professional who might be involved.
Know what is and isn’t possible
When it comes to federal financial aid, most schools don’t have much leeway to negotiate. They are allowed by the federal government to re-evaluate financial aid packages only in cases of special circumstances—as defined by Congress. Special circumstances may include job loss or salary reduction, death of a wage earner, high health care or child care costs, or multiple family members in college. If major information about the student’s financial situation has changed or was left off of the original application.
At most colleges, the financial aid administrator has the final decision—and you can’t appeal to the president of the college or the US Department of Education. In addition, administrators can’t simply go into the system and change the family’s expected contribution. They must change certain elements entered into the formula used to calculate financial aid.
Be polite
Renegotiating your student loans isn’t like negotiating the price on a new car. Financial aid administrators don’t have a lot of control over the amount you pay, especially when it comes to federal aid—formulas and controls are set by federal law. The most discretion an administrator has is in deciding to re-evaluate your financial aid situation in the first place, and you’re more likely to be successful in achieving a renegotiation if your changed circumstances are out of your control—not due to a recent move or the purchase of a new home, for example. Your extenuating circumstances will be what determines your outcome in the negotiation—not how hard a bargain you drive.
Paying for college isn’t easy. But if your college isn’t affordable even with financial aid, talk to the financial aid office. You may be able to get a re-evaluation of your financial aid package, but you’re more likely to be successful if you know how the process works. Much of the time, financial aid administrators don’t have control over how much you pay—just the types of inputs they can put into the formula. Still, especially if your financial circumstances have changed, there may be a way they can help.
Sources
Sources:
CNN Money: How to Negotiate Financial Aid
FinAid: Negotiation and Professional Judgment
Wall Street Journal: 10 Things Financial Aid Offices Won’t Say
Comments:
Very insightful. Maybe you can mention more about the documentation. What would I ask my doctor or other professional to provide? Would they be willing to do this?
More About Financial Aid
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- Do Younger Children Get a Better Deal on Student Aid?
- Senior Citizens and the FAFSA: Getting Federal Aid When You're Over 60
- Can Your Credit Score Affect Your Federal Aid?
- Tuition Aid for International Students: The Funding Landscape
- Major Changes to Your Federal Student Aid in 2012-2013: What's Ahead
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my daughter is starting college this year and the diff between finaid and what we need to come up with is daunting- i didn't know you could negotiate. i feel hopeful and appreciate the advice