Did you receive your financial aid award and it’s not what you expected? It does happen. With some college sticker prices up to $90,000, even generous financial aid offers may not be enough. You may be thinking it’s time to appeal – and while some students will have a case, not every student who needs more financial aid will win a financial aid appeal.
Here’s how to proceed.
Understanding Financial Need
Financial need is the difference between your cost of attendance (COA) and your student aid index (SAI). Not all schools will meet financial need. According to collegedata.com, of the schools in their database, the average percentage of financial need met for first year college students was 71%.
If you know paying for college is going to be the biggest, or one of the biggest obstacles in your decision, get an idea what percentage of financial need is met by each school where you applied. This information may be listed on your school’s website. You can use that percentage to get a gauge on the amount your school offered you. However, if your school didn’t cover their average percentage of need met in your award, that doesn’t mean they will have the ability to budget. But it does create an opportunity to ask a question.
Odds of Winning a Financial Aid Appeal?
We’ve given the advice in the past, and we will still give the advice to consider a financial aid appeal or negotiation, when appropriate. The worst answer you can receive is a no, but at least you tried. But what are your odds of winning a financial aid appeal? Well, that will depend on your school and your situation.
Financial Aid Appeal
If you are submitting a true financial aid appeal, and you had significant changes to your family’s income situation since you completed the FAFSA, your odds may be better. However, even if your school recalculates your FAFSA SAI based on the new information, the change in your SAI doesn’t mean that you’ll be eligible for additional aid to meet your full financial need.
Confusing right? Well, your school may have already awarded you the maximum you can receive in federal grants, federal loans, and federal work-study. And even if you didn’t max out, there are limits on how much you can receive in federal grants and federal loans each year. Meaning, if you have unmet financial need, your school will need to look at other sources, like state and school. Your state aid may also be maxed out, leaving institutional aid as your only option. When it comes to awarding additional institutional financial aid, that will be at the discretion of your school. If your school doesn’t have additional funds available, they may not be able to help you.
If your school has a policy on meeting financial need up to a certain percentage, for students at a certain household income level, you may be in luck. But that is only if you are attending a school that has a written policy about covering a certain percentage of financial need for their students.
Financial Aid Negotiation
If you are strictly asking for additional merit aid, and you are negotiating with your school, this will be at the discretion of your school. If you don’t have a change in financial situation, you may need to clearly explain why you think you should be reconsidered for additional merit aid. Not all schools will accept or acknowledge letters regarding the additional request for merit aid. But that doesn’t mean you can’t try.
You can use your accomplishment, additional awards or extracurriculars to explain how you will be an asset to the incoming class. But it’s best to do your homework and understand how your academics, skills, or other talents will be an asset. For example, if you didn’t note on your application that you’re a musician who can join the marching band, or you can compete as an athlete on a school or club team, this all may help you.
If you are negotiating because of a family circumstance that may not be financial, you will also need to be specific. These types of requests require effort from the student and parent—so be prepared when you ask.
College Costs
According to the College Board, the average cost of college was $60,420 at a private four-year university. In addition, the College Board also indicated that the average financial aid received by a full-time equivalent undergraduate student in the 2022-2023 academic year was $15,480. If a student were faced with the average cost of college, and only received the average financial aid amount, their financial aid gap could be $44,940. That financial aid gap could be significant for the student and their family.
Financial Aid Beyond the Award Letter
You may have exhausted all your options and now you’re wondering how to cover your financial aid gap. There are a few options to help you.
Review Tuition Payment Plan Options
Many institutions offer flexible tuition payment plans, a useful option to consider. These plans typically allow the breakdown of the tuition bill into manageable installments. However, policies surrounding these plans vary by institution.
Some universities manage their tuition payment plans in-house, offering straightforward installment payments directly to the institution. Missing a payment in such scenarios usually has minor repercussions but be aware that failing to fulfill the payment plan agreement might lead to class cancellations—as many of these plans require payment prior the start of classes.
Some schools partner with external vendors to provide tuition financing plans. These come with their own set of terms and conditions, and often, higher fees for non-compliance. It's essential to read the fine print carefully, especially since the university's ability to intervene on your behalf may be limited in case of financial difficulties.
Outside Scholarships
It's never too late to keep an eye out for scholarship opportunities for the coming fall. Searching for scholarships requires dedication and effort, but the potential financial reward makes it worthwhile. Even if you secure funds after your Fall term begins, those scholarships can help you in a subsequent term, especially if you're enrolled in a traditional four-year program.
Private Student Loans
You may not want to borrow additional funds to pay for college, but private student loans may be an option to help you. If you are an undergraduate student, there’s a strong chance you’ll need a creditworthy cosigner. Data from Enterval Analytics, over 90% of undergraduate private student loan borrowers need a cosigner to borrow.
If you're contemplating a private student loan, it's critical to approach this decision with careful planning. Borrow only what you need and ensure it fits within your budget. Thoroughly review loan terms, the feasibility of cosigner release post-graduation, and the option for in-school payments, even if minimal. Comparing differences and discussing repayment strategies with your cosigner are also key steps. Note that eligibility for private student loans heavily depends on your or your cosigner's creditworthiness.
Parent Student Loans
If you are a parent willing to borrow student loans to help cover the costs of your student, this may be the option for you. You have two options to review, the Federal PLUS Loan program offered to parents of dependent undergraduate students, or private parent student loans.
The Federal PLUS Loan program will require your child to complete the FAFSA, and then you (the parent) would need to complete the Federal PLUS Loan application on StudentAid.gov. The additional application will require a credit check, however, it’s not as comprehensive as a credit check through a private creditor. If you are denied a PLUS Loan, you can reapply with a creditworthy cosigner or by successfully submitting an extenuating circumstances appeal. If you cannot qualify for a PLUS Loan, your child will be eligible for federal student loan limits up to the independent undergraduate annual limits.
Private parent student loan options may also be an option. As a parent you can review your options as a parent borrower to help cover the costs of your child’s education. A private parent student loan will require you to qualify through a private lender. It’s recommended that you compare your options and determine which loan is the best fit for you and your child.
Navigating College Financing
The challenge of financing college is widespread, affecting numerous families. The pursuit of a higher education requires a balance between academic and financial considerations – the latter often being critical for long-term success. A debt-laden post-graduation life can detract from the achievements of academic excellence.
It's imperative to conduct thorough research and consider institutions with a spectrum of tuition costs. If financial constraints are an issue this fall, maintain focus on your long-term goals and explore options for the next enrollment cycle. Alternative education paths that align with your financial strategy might also merit consideration, enabling a more informed and less emotionally driven college selection process.
The path to managing and understanding college costs is multifaceted, but with the right strategy and resources, achieving both academic and financial success is within reach.