Many students who applied in the fall for the 2020-2021 school year are now receiving their award letters.
It’s critical for families to understand that a college’s first offer doesn’t have to be the final one. This is true whether a student is hoping for a bigger merit scholarship or a more generous financial aid award.
In this column, I’ve focused on seeking better need-based aid awards. Keep in mind, the more expensive the college, the more likely even a well-off family might qualify for financial aid.
To get ideas on how to successfully appeal for a greater aid package, I talked with David Levy, the former financial aid director at Occidental College, Scripps College and California Institute of Technology.
WealthManagement.com: Parents are frequently confused about who they should contact when they aren’t satisfied with an aid package. What should these parents do?
David Levy: To appeal, the student or the student’s family should contact the college’s financial aid office and not the admissions office. You should ask the office what the process is for what we call a “professional judgment review.” Some colleges call it a “special circumstances review” or a “financial aid appeal.”
Some colleges will ask the family to write a letter summarizing the special circumstances and to provide appropriate supporting documentation. Other colleges will have a form that can be downloaded from the college’s website to complete.
WM: What kind of appeal letters are most effective?
DL: The letter should summarize the special circumstances that are affecting the family’s ability to pay. They should be sure to include the specific dollar amount that would impact their ability to pay.
The documentation should ideally include information about the financial impact of the circumstances in addition to discussing the nature of those circumstances.
The letter should also provide sufficient information for the financial aid office to identify the student, such as the student’s name, his or her ID number, if it’s been provided, and the student’s date of birth.
They should be sure to include copies of independent third-party documentation of the special circumstances. The process for appeals and adjustments is driven by that documentation. The documentation might include copies of a layoff notice, proof of the recent receipt of unemployment benefits, medical and dental bills and letters from doctors, clergy, social workers, guidance counselors and/or law enforcement—anyone who’s familiar with the student or family situation.
WM: What mistakes do families make when appealing an award?
DL: I always tell families not to whine and not to use the term “negotiate.” Financial aid administrators are more receptive to the terms “discuss” or “chat” about the award rather than “negotiate.”
Sometimes families can be antagonistic, and that’s not going to get them anywhere. You don’t want to create an adversarial relationship with a financial aid office. Being polite and courteous goes a long way. Listen carefully to what it is they’re proposing and ways to enhance that.
The financial administrators cannot modify the financial aid formula, they can only modify the data elements that are part of the expected family contribution calculation.
WM: What expenses won’t a financial administrator consider?
DL: In general they’re not going to make adjustments for things that are discretionary. I’ve seen families try to request money for vacation expenses, children’s allowances, car payments, gardening, gambling losses, mortgage payments, credit card payments and even tithing expenses. They’ll also not make adjustments to exclude assets that were transferred to the parent to enable a grandparent to qualify for Medicaid.
WM: One of the things that I think people aren’t aware of is the impact that home equity can play if it’s a school that uses the CSS Profile.
DL: That’s right. A lot of colleges that are using the CSS Profile will cap the amount of home equity. Sometimes they’ll cap it at one, maybe two times what the family’s annual income is, so they won’t count the whole value of the home equity.
I would suggest that the family check with the college or university to see how much of the family’s home equity was actually counted in the aid calculation. I’ve seen families make a very good argument that they are equity-rich and cash-poor and so sometimes the college or university will readjust that on an equitable basis. They can do that only on a case-by-case basis, but sometimes they will make that adjustment if the family can make the case of being equity-rich and cash-poor.
WM: Can you appeal an award after the child has already started the school year?
DL: An appeal for more financial aid can be made in the middle of an academic year. For example, if a parent loses his or her job in the middle of the school year, the family can ask for a professional judgment review at that time.
Not all colleges are going to act on an appeal in the middle of the award year, but many of them will. Some colleges may wait until the following year depending on what the circumstances are and what their funding is. Many of my colleagues in financial aid will not make an adjustment in anticipation of a future change. Families should wait until the special circumstance actually occurs to request a professional judgment review.
Lynn O’Shaughnessy, a nationally recognized college expert, offers an online course—Savvy College Planning—exclusively for financial advisors. Click here to get Lynn’s guide, Finding the Most Generous Colleges.