The Need for Expert Counsel and Assistance

With continuing increases in postsecondary educational costs, and the growing complexity and frequent changes in technology and governmental regulations, today's schools face numerous demands and burdens related to the administration of student financial aid. While many schools have developed sufficient "in-house'' capabilities to cope with these burdens effectively, others are experiencing a growing need for outside counsel and assistance.

The process of finding and working with consultants, however, may itself give rise to problems and confusion. Because of the high demand for financial aid consultant services and the significant amount of money that is at stake, schools need to carefully evaluate each consultant's qualifications, resources, and advertising claims.

A judicious, informed approach to hiring a consultant is vital because the hiring of a consultant does not relieve an institution of any of its legal obligations in administering the federal student aid programs.

This document is intended to offer some basic guidelines to assist you in locating, evaluating, and selecting qualified consultants. It also defines the terms of their employment and helps you to work with them effectively. NASFAA cannot, of course, make specific hiring recommendations, nor do we maintain a list of financial aid consultants, but we hope that this information will help you avoid any possible pitfalls and difficulties, and at the same time, maximize the benefits you receive.

Types of Consultant Services

There are various types of consulting services, each of which involves a different level of activity and different time frames for performing services. For example:

1. A consultant may be hired to operate a school's aid program on a continuing basis with the assistance of regular personnel. Such an arrangement requires frequent visits by the consultant over an extended period of time.

2. A consultant may be employed to provide broad direction and training to a school's staff. In this capacity, the consultant serves as an instructor and counselor until the school's employees have developed sufficient competence to handle the financial aid process without assistance. This type of service would require heavier expenditures of time at the outset, diminishing steadily until the objective is achieved.

3. A consultant may be employed to address a specific problem, or to review a school's financial aid programs and recommend improvements. Such an arrangement normally calls for only a few visits with narrowly defined goals.

Evaluating Your Own Needs and Expectations

Obviously, the first step in considering whether you need to hire a consultant is to assess your school's current and future needs, and your ability to meet those needs with existing and future resources.

The following list contains a sample of some of the factors you might want to consider when assessing your needs and goals.

Having weighed and considered these factors you will be prepared to make a tentative decision regarding the level of consultant involvement that makes sense in your specific situation. Ask yourself:

• What goals should be set?
• What time period may be involved?
• What level of expense is affordable?

With these preliminary judgments, you will be ready to initiate discussions, and deal more effectively with consultant candidates.

Locating Qualified Consultant Candidates

Professional consultants and consultant firms are in operation throughout the country today. There are also many individuals who represent themselves as such, but whose credentials and abilities do not support their claims. While there is no "approved'' list of qualified student aid consultants available from any source, you may want to explore a number of avenues, including:

1. Contacting schools similar to your own to see if they have used consultants and, if so, for what purposes. Ask whether or not their experience was satisfactory. Reliable referrals are frequently available from such sources.

2. Asking your school's accrediting agency for consultant referrals.

3. Contacting other consultants whose background is known to you, but who may not themselves be available to assist you, to see if they can recommend qualified colleagues.

4. Requesting information from your state or regional association or a Regional Office of the U.S. Department of Education.

You should keep in mind that information provided cannot necessarily be interpreted as an endorsement of an individual consultant.

Evaluating the Qualifications of Consultant Candidates

Before initiating any substantive discussions with candidates, it is wise to request their credentials and references from previous employers, especially from institutions similar to your own. In reviewing the credentials of candidates for a consultant position, some minimum standards apply:

 1. The consultant should be able to show at least three years of recent experience with student aid processes at a school (or schools) similar to your own. It is important to note that work with community colleges, for example, may not adequately qualify a consultant to serve a proprietary school at which student progress is measured in clock hours or vice versa.

2. The consultant's prior experience should embrace all aspects of the student aid programs administered by your school, and should be broad enough to permit an informed overview of your total operation.

3. The consultant should show that his or her skills have been kept up-to-date through participation in recent training programs and through active membership in state, regional, and national associations. Such activities reflect professional commitment.

4. The consultant's own educational background should be appropriate. A bachelors degree should be considered minimal, and in many instances, a masters degree may be desirable.

5. The consultant should provide written documentation of his or her work in a consulting capacity for other schools. Detailed personal inquiries to former employers should be permitted to aid you in your evaluation.

Interviewing a Consultant

Once you are satisfied that your basic criteria have been met, the prospective consultant should be interviewed in depth. The interview should provide you with satisfactory answers to the following questions:

• Is the candidate thoroughly familiar with the required student aid processes at your school?
• Is the candidate's previous financial aid office experience appropriate to the tasks you have in mind?
• Is the candidate's knowledge of student aid delivery techniques and requirements thorough and up-to-date?
• Can the candidate fulfill specialized needs that your assignment will call for such as:
• application processing and tracking?
• staff training?
• automation and data processing?
• coordination of financial aid office and business office functions?

The prospective consultant's attitudes and personal characteristics should also be evaluated.

• Is the candidate's manner business like, yet courteous and patient?
• Does the candidate communicate effectively, both orally and in writing?
• How thorough is the candidate in eliciting details of your operations and how capable is he or she of absorbing and analyzing them?
• Does the candidate project confidence and show concern for ethical practices?

When you are satisfied with these criteria, you may proceed to the questions of cost and compensation.

Arrangements for Consultant Compensation

Payments to student aid consultants vary widely, depending on the services required, the frequency of contact, and the complexity of the project. In the case of a specific, closed-end assignment, a single fee may be negotiated on a project or per diem basis. In other instances, a basic hourly, weekly, or monthly retainer may be arranged for time commitments and services defined in the consultant's contract.

For an extended period of time, or for more broadly defined services, certain allowances to cover contingencies and cost limitations may be appropriate. In any event, a great deal of grief and friction can be avoided by making sure that there is a clear understanding between you and the consultant from the very beginning.

At this writing, rates for consultant services generally range upward from $300 per day, with somewhat lower rates for extended services. In addition, it is common for consultants to be reimbursed for any transportation expenses, meals, and lodging incurred in the performance of their services, as well as for any materials or outside clerical work provided. Any limits on these expenses should be specified in writing before a consultant is employed.

No payments prior to the performance of services should be agreed to. In the case of a long-term project, payments at specified intervals while the work is in progress are customary. For shorter projects, payment is usually made on the consultant's submission of a final written report.

Drawing Up a Sound Consultant Contract

A clear and complete contractual agreement between the school and the consultant is essential. Good practice would suggest that such a contract include the following:

1. Specific goals to be accomplished.

2. Frequency of the contact and/or period of employment.

3. Method, amount, and timing of compensation, and any limitations or contingent fees negotiated.

4. Method, amount, and timing of expenses, with clear limitations.

5. Requirements for periodic progress reports and/or a final report; to whom they should be submitted, in what form, in what degree of detail, and when they are required.

6. Provisions for office or staff support.

7. Location of and access to records and documents; safeguards to be taken by the consultant to protect all records and maintain their confidentiality.

8. Consultant's responsibility for attending and representing the school at biannual audits, program reviews, and other governmental inquiries.

9. Fulfillment criteria for the consultant's performance to be evaluated.

10. Provisions for the termination of the contract in the event you are dissatisfied with the consultant's performance.

In addition to these good practices, if the consultant is considered to be a third-party servicer, as defined in Section 668.2 of the federal regulations, the U.S. Department of Education requires that certain agreements be included in the contract. These agreements are outlined in Section 668.25(c) of the regulations. In addition, Section 668.25(e) of the regulations specify that a school must inform the Department of Education whenever it enters into, modifies or terminates a contract with a third-party servicer.

It is usually a good idea to have your institution's legal counsel examine the contract before it is signed by either party.

Working Effectively with a Consultant

If the proper groundwork is laid, you should be able to approach your relationship with a consultant with a sense of confidence that your best interests are being served. Remember, though, that it is up to you to maintain control through on-going communication and by keeping up-to-date on all the consultant's activities. While the consultant may be the expert, it is your school's money and welfare at stake.

If you are dissatisfied or uncertain of the consultant's progress and competence, discuss your concerns frankly with the consultant and with your associates. If the problem cannot readily be resolved, consider terminating your contract with the consultant and hiring someone with whom you are more comfortable.

Published as a service to postsecondary educational institutions by NASFAA, the National Association of Student Financial Aid Administrators.

We hope that this information will prove useful to you in managing your financial aid program. It's a complex component of your institution's operations and perhaps one of the most important for its well-being and its service to the community. NASFAA is here to help.

NASFAA is a nonprofit association of postsecondary institutions, individuals, agencies, and students, who are interested in promoting the effective administration of student financial aid in the United States. Based in Washington, D.C., for close liaison with federal agencies and legislators, NASFAA provides a wide range of professional services, training, communications, and support for the student aid community.

September 1997