Ways to reduce the cost of college.
Food for thought regarding ways to reduce the cost of college.
It's that terrifying time for seniors -- high school seniors, that is: the nail-biting moment when millions of them find out whether they've been accepted or rejected by their college of choice. But if that in-or-out verdict appears final, there's another one that's anything but definitive -- namely, a college's offer of financial help to parent and child.
At a time when demand for college aid is soaring -- applications for federal assistance have increased by 59 percent since 2006 -- 07, according to the U.S. Department of Education and FinAid.org -- appeals of award packages are also on the rise. Some colleges say requests for reconsideration are up as much as 30 percent over the past three years; this is forcing administrators to enter into sensitive financial negotiations and even renegotiations (yes, you can appeal an appeal). And the back-and-forth involves not just newly accepted students but also those at the tail end of their campus experience.
Naturally, the financial crisis is largely to blame, say college officials, pointing to story after story of parents who, during the few months between the application and the aid decision, suddenly faced unemployment or the bankruptcy of a business -- or who simply no longer had the home equity to tap for Junior's education bill, which, by the way, continues to rise. (Total charges at a private college now average nearly $40,716 a year, a 4.4 percent increase from 2011--12, according to the College Board.) But there also appears to be a certain consumer savvy driving the trend, as parents approach the first offer of financial aid as a basis for bargaining their way into a better deal -- often saving thousands of dollars per academic year. It's "like negotiating for a car," says Beth Walker, a financial adviser and college-planning specialist in Colorado who works with families on aid appeals.
Students from families that can afford the cost of college, can also get a break on a good students admission if the grades are good enough. Colleges are competing for good students with good character. A student with good GPA, volunteer work history, and AP classes are a desired profile for many college admissions offices.
Financial Aid by the Numbers
- $227 billion: Total aid for undergrad and grad students in 2011-12
- $98 billion: Total in 2000-01
- $11,450: Average aid per full-time undergrad in 2011-12
- $6,980: Average in 2000-11
Not surprisingly, many colleges rebuke that idea, saying appeals are typically considered only when there's been a change in the family's financial situation, or when relevant information may have not been included in the original application. "We really put our best offer out there," says David Mohning, executive director of Vanderbilt University's financial-aid office. But some schools concede that a degree of wiggle room is built into the equation -- as evidenced by the pool of money set aside for appeals. And when the situation involves a newly accepted student who is being offered a more generous aid package from a comparable institution, more than a few colleges actually encourage parents to play the leveraging game. "We don't want to be too far off from a school that is similar to us," says Lee Harrell, assistant vice president of admission and financial aid at Ohio Wesleyan University.
The end result, some parents say, is that it can be remarkably easy to appeal your way into more cash for college. And yet, many moms and dads either hesitate to request a review or simply aren't aware of how standard the practice is becoming. When Rachel Maurer's daughter was accepted last year to the Rochester Institute of Technology, where the freight runs about $42,000 a year, the Brooklyn, N.Y., mother worried about the price tag -- even after factoring in the $18,000 in promised aid -- but didn't think she could do anything about it. With some trepidation, she sent a polite appeal to the financial-aid office. The college quickly offered an additional $3,000 in aid -- just enough to convince the Maurers that the school was the right choice. "It put the bow on top of the package," she says.
Financial-aid consultants are also suggesting parents do a "pre-appeal" of sorts, providing additional documentation attesting to their financial situation before a college's aid office actually makes its decision. The advantage to this strategy, experts say, is that colleges have more cash to award before the aid packages go out, whether there's an appeal pool or not. "The money is limited," says Harrell, of Ohio Wesleyan. "We do run out of it."