/Op-ed: Families should plan to negotiate with colleges for more financial aid due to pandemic

Op-ed: Families should plan to negotiate with colleges for more financial aid due to pandemic

recep-bg | E+ | Getty Images

Spring typically represents a new beginning, a fresh start and a bright outlook for the future. This also indicates that the time is approaching for hundreds of thousands of high school seniors to decide on what college they will be attending.

As a wealth advisor and parent of one of those upcoming high school graduates, this is on my list personally and something we have been planning for a long time. These plans have been complicated by the pandemic and all its impact. However, at the same time, they may present a unique opportunity for the class of 2021.

Right now, colleges have been impacted financially due to the pandemic and are focused on maintaining their enrollments with the upcoming class.

Many people do not even realize that negotiation is a possibility. As parents, you do not want to lose out on this opportunity.

As you are working with your child to decide what school may be the best fit, colleges are looking to make their opportunity look as attractive as possible to gain your commitment and hard-earned dollars. This dynamic, following a year where many students deferred or simply took a gap year, is providing parents with the ability to negotiate and potentially secure their child a better education at a more reasonable price.

More from FA Playbook:
‘Investor alpha’ is the most important financial strategy for 2021
How to create a charitable trust as part of an estate plan
Here are 5 lessons the pandemic taught this financial advisor

We, as a family, are going through this process now. Therefore, I want to share some steps that may be helpful to you and your family in getting your child the best college fit at the best price.

A big part of the college planning process is determining a budget. Hopefully, you have already figured this out for your family, as we have done in ours. Our soon-to-be graduate understands that there is not an unlimited amount of money available for college. We do not want our son to have a great deal of student loan debt for his education and we do not plan to do that as a family, either.

This means being very specific on where you apply and why. Going to a big school, in a warm environment so he can go to football games on Saturday, should not play a role in the decision-making process. The overriding factors should be which school will provide my son with the best education, at the most affordable price, and the greatest opportunity to find a great-paying job when he graduates.

Families should have had their children apply to schools that are identified as “stretch,” “match” and “safe” schools for acceptance. You will not want to begin the negotiating process until you have received decisions from all of your schools, especially those that are at the top of your list which, in most cases, will be the stretch and match schools. Once you have received the decisions, you will want to make sure that you have received your financial award letters from each school.

It’s important to be armed with all the information needed before approaching the schools as you look to negotiate.

The financial award letters will be vital in this process. To keep things simple and able to fit on one page, I would suggest you create a spreadsheet that contains all the schools and a breakdown of the financial awards from each, in addition to your total out-of-pocket cost.

Now, it’s time to contact your child’s top three or four choices and speak with the financial aid and admissions offices. You will want to let them know that they are your top choice (even though they may be two or three) but you have received more attractive packages from your other choices.

Be prepared to share the award letters from the other options if asked, so make sure you are telling them something you can back up. Encourage them to see if they can make their offer more appealing to secure your deposit for the upcoming semester.

In most cases, they will need some time to review your student’s file, award letter from competing school if requested, the Free Application for Federal Student Aid information and the College Scholarship Service Profile, if they require it, and then get back to you.

This process, assuming the school wants your child and they are a great match for the school, could result in additional money made available for your child.

I am not talking about financial aid, which would need to be paid back in most cases, but merit money that a college is using to entice your child to attend. Merit aid is basically a form of college financial aid that does not consider a student’s financial need, but rather is awarded based on academic, athletic, artistic or special-interest merit.

This additional money made available would not need to be repaid and would continue as long as your child fulfills their obligation of maintaining the grades needed to continue the support.

Yes, there will be some strings attached, as there are with most merit funds, but they are certainly more than attainable and something you should share with your child so they know what is being expected of them.

The high school students in the class of 2021 are in a unique position, and they hold a great deal of power. Many colleges took a big hit in 2020 and need to make sure their enrollment stays up and students are on campus paying for meal plans and housing.

As for my son, he has received acceptance letters from two of his top schools and is waiting for the third. Both schools have provided him with a generous financial package, but we believe that we can improve it even further using the steps I have mentioned. Once my son receives another acceptance letter, we will begin the work to increase the packages already presented.

It’s important to understand that, right now, parents and their children are in a position of getting the best education possible at a more affordable tuition. A college is a business looking to keep its revenue stream from taking a hit. Again, you do not want to lose out on this opportunity.

— By Lawrence D. Sprung, founder/wealth advisor at Mitlin Financial, Inc.

Let’s block ads! (Why?)

Financial Advisor