Getting a deal from colleges

Many will consider lowering price tag

Your Money

April 23, 2006|By GAIL MARKSJARVIS | GAIL MARKSJARVIS,TRIBUNE MEDIA SERVICES

Who would have thought that one piece of mail could stir so much emotion?

But that's what happens to families this time of year when the initial elation over fat college acceptance envelopes morphs into sticker shock.

In May, students generally need to let colleges know if they will attend next fall, or pass up offers to favorite institutions and settle for more affordable options. For many parents, that poses sleepless nights as they face $20,000 or $40,000 annual costs to make their children's dreams come true.

But there are still opportunities to make the price tags less terrifying.

Don't take those college letters at face value. One college may appear to offer a better financial aid package than another, but you might be able to change that.

Time to negotiate

It's time to negotiate for better financial aid.

Financial aid offices expect it, and frequently offer more grants or scholarships so they don't miss out on students they'd want.

But just don't call it "negotiation" when you make the call, said Kalman Chany, a New York financial aid consultant and author of Paying for College Without Going Broke.

"Use tact and don't re-enact the Jerry McGuire scene: `Show me the money,' " he said.

The process is not unlike negotiating on a car, but the criteria is different, and the style less overt. This is, after all, about a loftier goal - educating a person. So keep the discussion on that level, but do your homework first.

To be successful, understand that colleges approach financial aid in two ways.

There's a formula for allocating financial aid based on family finances. That has been used by the staff to compute the financial aid it has offered.

Using the Free Application for Federal Student Aid, known as the FAFSA, and perhaps the CSS Financial Aid Profile forms, they have calculated what the formula shows you can afford to pay for college.

That's the "expected family contribution," and calls for both parents and the student to provide a certain amount of income and savings.

The best part of the aid package is the free money - grants and scholarships.

While the formula is precise, there is play in the system. Each college is different, some with more room to negotiate than others.

The outcome of the negotiation will depend on factors such as whether it's a private or public college, how attractive a child is to that institution, the challenges the college is facing in filling next fall's class, and the size of the endowment the institution has to provide grants or scholarships.

If a child wants to attend a public college, there is usually no room to negotiate because the formula is rigid and scholarship money limited.

The exception would be if family financial conditions have changed since the student applied for aid. If a parent has lost a job, or the family suffered another financial setback, make sure the financial aid office takes that into consideration.

Also do that with private schools.

"Offer documentation," Chany said. For example, show records that indicate you have lost overtime pay or had unusual medical expenses.

What to do

You may have some luck, he said, if you can show an extraordinary necessary expense like a roof repair after a storm.

But private colleges have more flexibility to add grant money. Consequently, low- and middle-income students often can attend a private school at a better price than they would at a public university.

Here's what to do: Call the financial aid office and ask to speak to the director. Tell the director that your child wants to attend that institution, but you are agonizing over the financial impact on your family.

Also mention that your child has a less expensive option. Then ask if there is anything that can be done to help make the school more affordable.

Don't say there is a less expensive alternative if you don't have one. You should be prepared to fax another college's offer when negotiating.

You will be in the best position if your child has been accepted and given an attractive financial aid package from an institution that is viewed as a close competitor to the college your child wants to attend.

Use the college rankings assembled by U.S. News and World Report to help spot competitors. At its Web site (www.usnews.com/usnews/rankguide/rghome.htm) you will see that colleges are categorized by top universities or top liberal arts colleges. Then there are lower tiers, or less prestigious colleges, ranked by "Tier 3" and "Tier 4."

If you have a great financial aid package from a Tier 3 college, but the student wants to attend a college ranked high among "top" colleges, you probably won't have the negotiating strength that you would if you also had a great offer from another top college.

Your negotiating position may be enhanced depending on where colleges rank. For example, if you were admitted to Duke University, ranked fifth best by U.S. News, and liberal arts school Goucher College, ranked No. 94, you might be in a better position to negotiate with Goucher than with Duke. On the other hand, Duke and Northwestern University, both among the top 15 schools, might compete more aggressively for very attractive students.

While you might receive a quick response from a college, you also could be asked to submit a formal written appeal of your financial aid package.

If you're still negotiating May 1, Chany suggests asking if you can delay your response to the college's acceptance letter.

But if that doesn't work, take a deep breath and look at the cost of college through objective eyes to evaluate whether you can truly afford it or not.

Gail MarksJarvis writes for Tribune Media Services.

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