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Increasing Your Financial Aid Package

In the late 1980s and early 1990s, colleges and universities were experiencing some difficulties with filling their classrooms because the Baby Boomer generation had long since left school. More recently, there has been an “echo boom” that has increased college attendance somewhat, but the number has not been enough to replace the record highs of the 1960s and 1970s.

Two consequences of this dearth in students has been a more rapid increase in tuition, but also a somewhat greater willingness among some financial aid offices to offer better package deals to students. This doesn’t mean, however, that getting more aid has become easier. There is still a lot you need to do if you want to increase your financial assistance as much as possible. Toward this end, there are two main strategies you can pursue: 1) reduce your assets to lower your expected family contribution and increase your aid eligibility; 2) negotiate with schools to get the best aid package you can.

TIP…Submit your requests for financial aid as soon as possible.

Who Should Try This: Everyone!

Female College Student Poses in Business School Hallway


Government vs. School Form Considerations

TIP…Review the questions on the Financial Aid Forms from several different schools and take into consideration that schools asking for the most details about your finances are less likely to offer favorable financial aid packages.

Who Should Try This: High school students and their parents

One of the first things you should keep in mind when filling out forms for the government or for your selected school is what factors are considered when the information you provide is evaluated. There are some important differences between filling out the government’s Free Application for Federal Student Aid (FAFSA) and a college’s financial aid form.

For example, the government no longer considers the equity in your family’s home when calculating the expected family contribution (EFC). Many colleges, especially private schools, still do factor in home equity. This is why many financial advisors tell their clients it is a good idea to take out a home equity loan to reduce the family’s perceived net worth.

If, for some reason, you did not want to be considered for non-government aid, then it might make sense to put more money into paying off your mortgage, where it will not count in the FAFSA calculations. But most parents and students want aid from all possible resources, so you still need to consider how home equity will affect your aid package.

Some colleges go even further by asking you to provide information on the value of your car, your retirement plan, or your life insurance policy. Such questions do not inspire confidence that the school is working to offer you a large aid package.

Shifting Assets

TIP…Ask a grandparent to set up a college savings account under his or her name and supplement it with occasional, limited gifts from your own pocket. Don’t use any of the money until the student is ready for college.

Who Should Try This: Parents of high school or younger students

Shifting one’s assets with the idea of lowering the EFC can be tricky business. If done cautiously and honestly, however, it can be an effective strategy. An important thing to keep in mind when managing your assets in this way is that many colleges and universities not only investigate a family’s finances during the student’s senior year in high school, but also during his or her junior – and sometimes even sophomore – year. Sudden changes in financial assets will draw an financial aid administrator’s (FAA’s) attention to the financial aid forms you have filled out.

One of the biggest mistakes many parents make is trying to hide their assets by putting money into an account under their child’s name. While a child’s income is taxed at a lower rate than a parent’s, when it comes to financial aid schools will count 35% of the students savings toward the EFC but only 5.6% of the parents’ savings. There is an alternative, however: money can be given to a student’s grandparents or other relatives for safe keeping.

The law limits such gifts to $10,000 per year, but this can be a questionable strategy. First of all, the person who receives the gift, whether it is a grandparent or other relative, is not legally bound to use it to pay for junior’s schooling; also, the sudden disappearance of large sums of money from your assets will start bells ringing for any FAA who keeps an eye on your family’s financial history.

TIP…Use money that would otherwise be considered part of your EFC to make large purchases you were planning to make anyway.

Who Should Try This: Parents of high school juniors and seniors; adult, nontraditional students

For these reasons, it might be best to limit such family asset shifting to more modest amounts. If a grandparent is also willing and able to help pay for a grandchild’s education, you might try combining some of your gift money with their contributions into a savings account under the grandparent’s name, thus creating a larger fund that will earn more interest.

If you’re planning to buy an expensive item, such as a car, a new computer system, or equipment for your business, do it sometime during the years that will be reviewed for EFC consideration.

If you anticipate owing the IRS money when you file your next tax return, calculate your taxes and make the payment before December 31, rather than waiting until April 15 of the next year. This way, the loss will be considered a reduction of assets when the EFC is calculated the next year.

TIP…Appeal to the chairperson of the financial aid committee rather than directly to the financial aid administrator.

Who Should Try This: High school seniors, undergrads, and graduate students

Filling out Forms

The single most important thing you can do when completing financial aid forms is to submit them as early as possible. The reason is that colleges and universities have a limited number of funds to disperse to students. If you send in your aid request too late, you will simply be out of luck.

Reporting Your Home’s Value

Another mistake people make is not accurately reporting their assets. This is especially true for such items as the value of a home or business assets, such as equipment. While the federal government no longer considers home equity, most colleges will, and miscalculating the value of your home will cost you financial assistance. The following Housing Index Multiplier table uses 1996 figures from the National Income and Product Accounts of the United States, U.S. Department of Commerce, Bureau of Economic Analysis on the web at www.bea.gov/. To calculate the value of your home, simply multiply the purchase price by the number next to the year of purchase. For example, if you bought a house for $25,000 in 1972, you could calculate it’s value today as $25,000 x 3.58 = $89,500.

House Purchase Index Multiplier

Pay off what you owe on taxes early so that the loss will be recorded on your financial aid forms.

Who Should Try This:Parents of high school seniors; adult, nontraditional students

TIP…Accurately assess the value of your home so as not to deny yourself financial aid from your selected school by overestimating your assets.

Who Should Try This: Parents of high school and college students; adult, nontraditional students

Updating Your Financial Status

Next to applying early for financial aid, making sure you update your financial aid status every year, or whenever your family situation changes, is a vital part of making certain you receive all the aid you are entitled to. Remember, just because you receive a certain amount in your financial aid package your freshman year doesn’t mean you’ll get the same deal in your sophomore or junior years. Keep the FAA informed of any and all changing circumstances.

Shopping for a School

You should always give yourself as many options as possible when considering a college or university. Instead of just applying to one or two schools, apply to six or more and see which school offers the best deal. And don’t limit yourself to schools you feel are “in your range.” A private university with a $25,000 price tag that offers you a $22,000 aid package is a better deal than a $7,000 state college that only gives you $2,500 in aid. Aim high for some of your choices, but also pick a few lower-priced schools just in case.

TIP…Apply to six schools instead of just one or two and wait for them to offer you aid packages before making your final selection.

Who Should Try This: High school seniors and college seniors

When you receive your student aid reports, look them over carefully. Don’t just look at the bottom line of what each school is offering, but study the awards and loans that make up each package.

For example, a university might seem to offer you a large package containing $15,000 in aid, but if you find that much of the assistance is in the form of PLUS or unsubsidized loans, the sweeter deal may be from the college that gives you $10,000 that is mostly grant money and subsidized, low-interest loans. Remember, you can always reject portions of your aid package; you’re not obligated to take high-cost loans you don’t think you can afford.

Another thing you should check is whether or not the proposed aid package truly covers all your anticipated expenses. A school might claim to offer you 100% of your requested assistance, until you see that the numbers don’t cover books, fees, transportation, and living expenses.

Finally, evaluate what the school is factoring in to your EFC. Do they expect the student to contribute? If your parents are divorced, do they expect one or both of them to help pay for college? Do they count the equity in your home or business as part of your expected contribution? The fewer assets a college expects you to use the better off you are.

Negotiating Your Aid Package

TIP…Carefully evaluate the contents of each school’s proposed aid package. The best packages are those that offer more money in the form of grants than in loans, or that offer low-interest loans. There should also not be a gap between what the school sees as your expenses and what you actually anticipate the expenses to be. Finally, check to see what family assets the school is taking into consideration in determining your EFC.

Who Should Try This: Everyone!

Negotiation. It’s the one word that financial aid administrators (FAAs) hate to hear. Some of them won’t even acknowledge that negotiating an aid package is an option. The truth is that if you truly feel you deserve more than you’re getting, and can justify your reasoning, you should seriously consider asking for more assistance.

Some of the reasons for negotiating an aid package include:

  • Your financial situation has recently changed (if true, this is the one reason that will almost always get you more aid)
  • You do not believe the school has taken all your expenses into account
  • The school is using your scholarship money or high-interest, unsubsidized loans to count toward your package
  • You simply feel that what you can bring to the school (academic excellence, athletic ability) is worth the school’s extra effort.

You should never approach an FAA with a cocky attitude that you deserve more than you’re getting. Always be friendly and reasonable, and explain your reasoning honestly. If you’re a straight-“A” student or a talented athlete, you will, of course, have a better chance of winning the argument. But even an average student can negotiate a better deal in the right situations. Here is an example of a good versus a bad approach:

Bad Approach: “We have too much credit card debt to afford our bills and a college education! Can’t you take our financial problems into consideration?” [Financial aid administrators rarely consider bad debt a reason to grant you more funds, except in some cases where unusual hardships are involved.]

TIP…Inform your FAA of any changes in your family’s circumstances as soon as they occur. Don’t wait until it’s time to fill out the next year’s FAFSA or FAF.

Who Should Try This: Everyone!

Good Approach: “I’ve calculated what we truly need to pay for all our college expenses, and the package you have offered does not seem to take all these factors into consideration. Can we realistically address these issues and see if the package can be adjusted?”

Other good arguments include:

  • Costs that might not have been considered on the financial aid forms, including medical expenses, tuition for a young child in private school or for an older child in graduate school
  • The financial aid determined was based on a year that was unusually profitable; you typically don’t earn as much as you did in the year that was reported

TIP…Try negotiating with the financial aid administrator at your selected school. Do not approach them aggressively, but rather with reasonable, well thought-out arguments. Make certain to back up your arguments with as much hard evidence as possible.

Who Should Try This: Anyone who honestly feels they should receive a better package.

The FAA is not the only person you can talk to, however. Colleges and universities typically have award committees that determine aid packages. To circumvent the financial aid office, contact the school’s admissions office and request the name and address of the chairperson who heads the financial aid committee. Also, find out what day the committee is scheduled to meet next. Then send a letter of appeal to the chairperson before the meeting.

When negotiating or appealing your aid package, it is best to have an adult rather than a young college student do it. If possible, such negotiations should also be done in person. In this way, you are there to counter any arguments the FAA might offer, and it also shows you are able to go the extra mile to get what you want.

But letters are also a perfectly valid way to negotiate for more aid. Even if you visit the FAA in person, it’s a good idea to record your thoughts and actions in writing. The following pages include several sample letters to help you get started.


October 1, 2016

Mary Burns, Financial Aid Administrator
XYZ College
123 Main Street
Anywhere, CA 91023

Dear Ms. Burns:

I have recently examined the Student Aid Report for XYZ College, and there are some items I wish to address. First of all, I would like to reject the PLUS loan, as it does not offer a very favorable rate. Please also reduce the $2,500 unsubsidized Stafford Loan to $1,500.

I also noticed that the package you have outlined here does not take into consideration some of the necessary expenses of college, including books, fees, and travel costs.

I am very impressed with the academic reputation of XYZ College, but I have also been considering PDQ University, which has presented me with a package that includes some of the expenses mentioned above. I would like to discuss my package further with you, and explore what other financial aid opportunities might be available to me at XYZ College.

Please contact me at your earliest convenience. Thank you for your time and consideration!


A. Student
123 Main Street
Anywhere, Anystate 11111

Home: (000) 555-1111


October 1, 2016

Frank Helper, Financial Aid Administrator
PDQ University
111 University Drive
Any City, Any State 00000

Dear Mr. Helper:

Thank you for the recent offer of a financial aid package for attending PDQ University. Unfortunately, since the time I submitted data about my family’s finances on the FAFSA and FAF forms, our financial situation has changed dramatically.

ABC Company has had to lay off many of its employees, including my father, and we do not know when he will be able to return to work. Because of this, my family will not be able to contribute nearly as much as they expected toward my college education at this time.

I would greatly appreciate it if you could make adjustments to my financial aid package to address this change. Please let me know if there is any additional information you will need in order to complete the necessary paperwork, and thank you for your prompt attention to this matter!


A. Student
123 Main Street
Anywhere, Anystate 11111
Home: (000) 555-1111


October 1, 2016

Mary Smith, Financial Aid Officer

Big University
Financial Aid Office
1234 Main Street
Big City, Any State 00000

Dear Ms. Smith:

Thank you for your recent financial aid package offer. I have looked over the contents of the offer carefully and was surprised to see that my $2,000 PDQ Scholarship for Academic Excellence was used to reduce the original amount of my university grant. I believe that the use of this award in this manner is contrary to the intentions of the scholarship organization that presented it.

I would greatly appreciate it if we could discuss further the effect of my scholarship on my financial aid package. Perhaps there is a way to use all or part of the scholarship to eliminate some of the loans that are included in the package, instead of taking the money out of the grant sponsored by Big University.

Thank you for your prompt attention to this matter. I look forward to your reply.


A. Student
123 Main Street
Anywhere, Anystate 11111
Home: (000) 555-1111


October 1, 2016

Trisha Staffperson, Scholarship Administrator
The ABC Association
1212 Center Road
Lubbock, TX 33333-1111

Dear Ms. Staffperson:

Thank you so much for awarding me the PDQ Scholarship for Academic Excellence. The $2,000 grant should go a long way toward helping me pay for my college tuition. I have recently run into a problem, however, and I would like to request your assistance.

I wanted to use your scholarship to attend Big University, but the financial aid office there used it instead to reduce my financial aid package. As you know, the intention of the PDQ Scholarship was to assist talented students with financial need such as myself. I feel that the actions of Big University are contrary to the purpose of this scholarship.

Therefore, I would like to ask if you would be willing to write a letter of appeal to the university’s financial aid administrator, Ms. Mary Smith. If you explain the intention of the scholarship to her, perhaps she will agree to reduce the amount of loans in my package rather than the amount of school grants. This would be a very beneficial use of the scholarship money you have granted me. I will also be writing to Ms. Smith about this matter. You can send a letter to her attention to: Big University, Financial Aid Office, 1234 Main Street, Big City, Any State 00000, or call her at (000) 555-1111, ext. 111.

Thank you so much for your help! Please contact me if you have any questions, or if there is anything else you would like to know before pursuing this further.


A. Student
123 Main Street
Anywhere, Anystate 11111
Home: (000) 555-1111

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