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How to Negotiate with Colleges to Get More Money

This blog post has been adapted from an article written by our Director of Consumer Solutions, Matthew Carpenter.

Many financial aid offices of colleges and universities are literally behind the times when it comes to determining financial aid packages. During Covid-19, this timing can hurt you financially if the pandemic affected your family income in 2021.

Let’s discuss strategies of how to appeal a financial aid offer to negotiate additional need-based aid for your college-bound student.

First, a quick review:

What is a financial aid package?

A financial aid package typically includes two main pieces of information:

  1. The Cost of Attendance (COA), which is the estimated annual total of tuition and fees, room and board, books and supplies, local transportation and personal expenses, possibly a personal computer, and other school-specific expenses.
  2. The financial aid offer, also called a gift, award, source, or similar, is the monetary assistance offered by the school to the individual student. It’s often a combination of grants and scholarships that don’t have to be repaid, and loans, which do have to be repaid, usually with interest.

The offer may also detail the Expected Family Contribution (EFC), which is the amount of money the family is expected to be able to contribute to the student’s college expenses. EFC is calculated by each school according to a formula based on the student’s Free Application for Federal Student Aid (FASFA (®). The difference between the COA and the EFC (COA – EFC) is the maximum amount of aid that the student is eligible to receive from the school, although the actual award offered may be less.

It’s complicated, all the more because both the EFC and college’s aid package look at the tax return from two years ago. That means if your kid is heading to college in 2022, their financial award is most likely based on your 2020 records, not 2021.

That timing is proving highly problematic for many. Is it for you?

2020 was a very different reality. It was the start of the pandemic, and while some businesses shut down, others were able to buy time using tools like the PPP loan — allowing them to keep employees on for a longer period of time. 2021 may have been a reality check, and as the pandemic waged on, some people’s working situations changed.

If your current financial situation has changed significantly because either your 2021 income took a hit following the economic volatility caused by the pandemic or you’re forecasting a significant change this year, the data from prior years is more or less irrelevant.

If that’s the case, now is the time to appeal the financial award offer.

What’s a financial aid appeal?

It’s essentially a detailed letter, along with documentation to back up your narrative. You want to demonstrate that you are unable to afford the EFC as originally calculated and that you are requesting additional need-based aid.

There is no need to squirm. You are not asking for charity. You’re simply making the best financial decision in your current situation.

By the way, you aren’t the only one. Financial aid appeals have been spiking during the pandemic.

What should you include in a financial aid appeal?

Write a detailed letter that describes the reasons for your reduced income from 2021 earnings or for your expected income loss in 2022. Then, document, document, document.

Every piece of documentation should back up your narrative. 

For example,

  • If you already filed your 2021 income tax return, include a copy.
  • If you haven’t yet and you (or your CPA) won’t have it ready anytime soon, include copies of your 2021 W-2s and 1099s, as applicable.
  • Include paystubs showing your current year-to-date earnings if those are less than your 2020 or 2021 earnings from the same period.
  • If you lost your job, include the letter of termination.
  • If you collected unemployment benefits in 2021, including the W-2.
  • If you are currently collecting unemployment benefits, take screenshots of your weekly reports and include those.
  • If you own a business and your sales are down, include monthly cash flow or income statements, along with corresponding documents from 2020 or early 2021 if they show more profitable numbers.

Hard numbers maximize your odds, so include all documentation that will bolster your appeal.

Finally, conclude your letter with a formal ask that the college recalculate your EFC based on these current numbers that justify increased need-based aid.

Feel free to use our sample financial aid appeal letter to guide you.

Sample Financial Aid Appeal Letter

Good Morning [insert name of school’s financial rep],

Thank you for your financial aid offer dated xx/xx/2021 for [insert name of your child]. He/she is beyond thrilled having been accepted to [insert name of college], and we hope he/she will be able to start in the 2022 fall semester.

However, my family’s financial situation has worsened since 2021 due to the ongoing COVID-19 pandemic. I am respectfully asking that you recalculate our Expected Family Contribution in light of our significant loss of earnings and to increase our son’s/daughter’s scholarship award.

On May 31, 2021, I was laid off from my job as [insert title of position] with [insert name of employer] due to budget cuts prompted by the pandemic. I collected unemployment for five months and was hired as [insert title of position] with [insert name of new employer] in November 2020. Unfortunately, my current salary is xx% less than at my previous job.
I have enclosed the original termination letter, W2s from my previous and current employers as well as from the [Division of Workforce Services]. Combined, these earnings total $xxx for 2021. That’s an xx% decrease compared to my 2020 earnings.

In light of my reduced earnings from working, I am respectfully reiterating my request for a recalculation of the EFC and a larger scholarship/grant award for our son/daughter.
Thank you for your consideration.

Sincerely,

Your Signature

What other steps can you take?

After you’ve mailed your letter, follow up with a phone call a week or two later. Reiterate your child’s interest in attending the college and your willingness to support that plan. Ask about the status of your appeal. Indicate your openness to negotiate.

Be persistent and hopeful. Also, don’t forget: Lean on us. We love being a resource to help you. Sign up for a free MyCAP membership to find your most affordable path to college today.

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