Financial Aid Strategies

What strategies might a student or family employ in looking for the most "bang for the buck" in a college education?

Private colleges work through a complicated series of predictions and calculations intended to yield a balanced budget. For example, 1000 students who pay full tuition of $25,000 per year; 500 students who pay half the tuition, get some federal aid, and the rest "covered" by institutional grants; another 500 students who pay none of the tuition, and so on. But what if you offer admission to the "right" blend of students, and only the ones who cannot afford to pay anything accept your offer? What if all the "best and the brightest" students, the ones who would increase your institutional prestige and increase future applications, all go somewhere else?

It is easy to see how quickly this becomes murky. Each college must figure out how much discount (either in the form of need-based or merit-based aid) each student must be offered in order to convince that student to attend. This can lead to some questionable practices on the part of colleges, and some room for negotiation on the part of students and families.

Financial Aid Strategy

This leads us to a discussion of some basic strategies for negotiating the financial aid system. None of these tips is intended to "cheat" or "beat" the system; they are intended to help students and parents be smart consumers, and to get the most bang for their education buck.

1. Keep firmly in mind the concept that the stated price of attending a particular college is rarely the price that most students pay. At the majority of colleges, the majority of students get some sort of discount off that price.

2. You cannot receive financial aid unless you apply. Period. Although the process may seem bewildering or complex, it is likely to be worth it. Apply.

3. You may file the FAFSA anytime after January 1 of the year the student will attend college. File the form completely and as early as possible. File institutionally required forms on time. One of the chief reasons students do not receive all the financial aid to which they may be entitled is filing forms late or filing them incompletely.

4. Don't be afraid to ask a college to reconsider the financial aid package they have offered. Many schools are willing to do this; some will even welcome copies of their competitors' financial aid packages. The college may make a better offer if the student is one it is recruiting heavily.

5. Remember the differences between need-based and merit-based aid. Families with relatively high incomes should look at potential colleges' policies on merit aid, as this avenue may be their best chance at assistance.

6. Even a college that does not award much (or any) merit aid may offer a "better" package to a student with better grades or more activities. In other words, the student may get more grant and less loan or work study eligibility.

7. Some colleges may actually offer a less desirable package to a student who has indicated that the school is his or her clear number one choice or who is not applying anywhere else. The college may gamble that the student will enroll despite the lower package, and save the better packages for students who are torn between two schools. Therefore, it may be wise to be a little cagey about your interest in a school, not unlike when you are house or car shopping.

8. You must apply for financial aid each year, and a student may not necessarily receive the same package each year. Sometimes that is because their family situation has changed (a sibling is no longer in college too, a parent's job is different, etc.). Some colleges have been accused of offering "rich" packages to incoming freshmen, and then slowly decreasing the amount of financial aid (or changing the "mix" of grant and loan) in subsequent years because a student who has finished a year or two is less likely to leave over a slightly less desirable aid package. While evaluating a school's initial offer, try and find out how returning students' aid is figured.

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